Major International Business Headlines Brief::: 05 December 2019

Thu Dec 5 01:15:11 CAT 2019

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Major International Business Headlines Brief::: 05 December 2019

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*  Foreigners dump nearly $10 bln of South Africa assets in 2019

*  MTN to oppose S.African regulator's recommendations on data costs

*  South Africa's Grand Parade loses appetite for Burger King

*  Egypt to get $1.1 bln from ITFC to fund commodities imports

*  Kenya private sector activity stable in November - Markit Stanbic

*  Glencore's Glasenberg says successor could be in place next year

*  South Africa's rand steady as investors weigh GDP slide

*  South Africa’s Taste Holdings loses second CEO this year as focus shifts to luxury

*  South African economy contracts 0.6% in third quarter

*  Kenya forcing importers to use costly new Chinese railway, businessmen say

*  Pound surges to two-year high against the euro

*  Johnson backs tech tax despite Trump's threats

*  HSBC to bring in single overdraft rate of 40%

*  How China-US rivalry is dividing the internet

 <mailto:info at bulls.co.zw> 

Foreigners dump nearly $10 bln of South Africa assets in 2019

JOHANNESBURG (Reuters) - Foreign investors have ditched more than 141 billion rand ($9.6 billion) of South African stocks and bonds this year - the biggest annual selloff in at least a decade, data from the Johannesburg Stock Exchange showed.

Weak company profits, a dire economic outlook and rising chances the country will lose its last investment-grade credit rating have sent jitters through markets.

But unlike previous selloffs, foreign investors are dumping stocks at a much higher rate than bonds, with high local yields spurring carry trade and providing some support to fixed income, according to analysts.

“Demand for bonds seems like it’s being stimulated by the systematic rotation out of equities, which makes sense, especially given the attractive yields now on offer in the SAGB market,” said Kieran Siney ETM Analytics.

“But looking at South Africa’s economic fundamentals, its hard to believe.”

On Tuesday after economic growth contracted for a second time in three quarters, suggesting 2019 gross domestic product (GDP) will struggle to pass the 1% threshold, foreign investors were net buyers of bonds while equities kept falling. [nL8N28D28S]

Even the rand, usually sensitive to growth shocks, shook-off the stark figures after an initial dip and firmed 0.4% on Wednesday morning.

“You look at the carry you’re being offered of 4.5% on 10-year paper in a 4% environment. Leave all else aside, that is an incredibly attractive real yield, full stop,” said chief executive of Cannon Asset Managers, Adrian Saville.

CARRY TRADE SHIELD

Three U.S. Federal Reserve interest rate cuts and a raft of rate reductions by central banks around the globe have made the return less inflation, or “carry”, on South Africa’s debt attractive to investors desperate for yields.[nL8N2814DD]

“We’ve been able to take in our stride without a currency crisis materialising, but it makes you wonder what would happen if the global circumstances changed,” Saville said.

President Cyril Ramaphosa’s failure to jumpstart the economy nearly two years into the job, and the increasing likelihood the country could lose its last investment grade credit rating by early 2020, has dramatically cooled investor appetite.

Moody’s last month kept South Africa on the brink of “junk” status by affirming its ‘Baa3’ rating - the lowest rung of investment grade - revising the outlook to “negative”. Fitch and S&P Global Ratings already relegated South Africa to “junk” in 2017.[nL8N2821RC][nL8N27H62H]

And the cost of insuring exposure to South Africa’s sovereign debt has climbed steadily again since late October and accelerated sharply over the past few days. Five-year credit default swaps rose by 7 basis points from last Friday’s close to 195 bps, according to IHS Markit. Data published by the JSE on Monday showed foreign investors between January and the end of November sold more than 112 billion rand of equities and over 29 billion rand of bonds.[nL8N28C24L]

Returns on local equities have struggled to break above average inflation of around 5%, while numerous firms have paused dividends and seen profits sink.

(1 = 14.7075 rand)

 <mailto:info at bulls.co.zw> 

MTN to oppose S.African regulator's recommendations on data costs

JOHANNESBURG (Reuters) - South African telecoms group MTN said on Wednesday it would “vigorously” oppose recommendations of the Competition Commission after the regulator instructed MTN and rival Vodacom to lower data prices.

“We respectfully disagree with the analysis and recommendations contained in the summary report and, as we study the full report, (we) will continue to engage constructively and vigorously defend against over-broad and intrusive recommendations,” it said in a statement.

On Monday, Competition commissioner Tembinkosi Bonakele said Vodacom and MTN could face prosecution if they do not agree to cut data prices in the next two months. This followed the findings of a data services inquiry launched in August 2017 which showed prices charged by the operators were higher in South Africa than in other African markets in which they were operating.

The same was true when comparing local data costs with those outside Africa, Bonakele said.

Vodacom and MTN have argued that such comparisons are uninformative because cost and quality differences across countries, including spectrum allocations, may account for the differences in pricing.

On Wednesday, MTN said its local unit has substantially reduced the effective price of data and the group has also invested over 50 billion rand ($3.40 billion) in the South African network over the last five years to accommodate growing data demand with limited spectrum availability.

It added that it has also pledged a further 50 billion rand of investment over the next five years.

Vodacom spokesman Byron Kennedy said on Monday Vodacom had reduced its effective data price by about 50% since March 2016.

The Federation of Unions of South Africa welcomed the findings of the Commission and called on Vodacom and MTN to implement them with immediate effect, though it acknowledged the challenge that lack of additional spectrum has on costs.

Telecom companies have said it is wrong to lay the blame for the country’s data costs on operators, arguing the greatest hurdle to data pricing reduction remained spectrum allocation, for which the government is responsible.

“The release of new spectrum in this market will greatly assist our ability to service more customers with more data traffic,” MTN said, adding that South Africa has amongst the lowest spectrum allocation in its markets.

South Africa’s President Cyril Ramaphosa told an investment conference in November that his government had started the process of releasing high-demand broadband spectrum and that a policy framework had been published.

($1 = 14.7075 rand)

South Africa's Grand Parade loses appetite for Burger King

JOHANNESBURG (Reuters) - Grand Parade Investments (GPI) Ltd, which holds the Burger King franchise in South Africa, said on Wednesday it was in talks to sell a stake in the business, without giving a reason.

Shares in GPI fell 6.84% to 3.54 rand at 0920 GMT, their lowest level in almost three-weeks.

GPI signed a long-term master franchise agreement with Burger King in 2012, betting on South Africa’s lucrative fast-food market, consumer appetite for flame-grilled burgers as well as their price appeal.

The Whopper Burger maker, which launched its first restaurant in Cape Town, South Africa in 2013, competes directly with market leader McDonald’s Corp and other restaurant chains such as RocoMamas.

The launch in South Africa had formed part of Burger King’s expansion into high-growth emerging markets.

In the year ended June 30, the fast food franchise started generating a “long awaited” profit of 11.7 million rand ($795,512.49) for GPI from a loss of 27.1 million rand, driven by higher sales from new restaurants and a significant improvement in same store sales of 10.3%.

As of June 30, Burger King had 92 restaurants, with a total of 18.6 million customers served in the period compared to 15.6 million in the prior year, it said in its full-year result statement released in September.

In February, GPI had announced plans to close its loss-making Dunkin Donuts and Baskin Robbins franchises in South Africa after failing to find a buyer.

In June, the company sold back a portion of its 17.5% stake in restaurant franchise group Spur Corporation.

($1 = 14.7075 rand)

Egypt to get $1.1 bln from ITFC to fund commodities imports

CAIRO (Reuters) - The International Islamic Trade Finance Corporation (ITFC) will provide $1.1 billion of funding to help Egypt with imports of petroleum products and basic commodities in 2020, Egypt’s petroleum and supply ministries said on Wednesday.

The funds are part of a $3 billion agreement between Egypt and ITFC signed in January 2018.

Last year, acute shortages of foreign currency caused delays in some payments by Egypt’s General Authority for Supply commodities (GASC), which was a signatory to the deal, to global suppliers.

The financing at the time ensured dollars were available for the state buyer to use for payment at some of its international purchasing tenders.

Cairo pays around $1.5 billion annually for grain as part of a bread subsidy programme on which many of Egypt’s almost 100 million people depend. Egypt is the world’s largest wheat importer.

“This agreement is a genuine partnership with the International Islamic Trade Finance Corporation in order to provide more basic goods to citizens,” Supply Minister Ali Moselhy said in a statement, which did not specify what portion of the money would be allocated to wheat purchases.

Hani Salem Sonbol, CEO of ITFC, said the agreement would also support the “Better Cotton Initiative,” a programme being implemented by the U.N. Industrial Development Organisation.

Kenya private sector activity stable in November - Markit Stanbic

NAIROBI (Reuters) - Activity levels in Kenya’s private sector were unchanged in November, as increased sales during a period of good weather helped boost output while growth in new orders slowed, a survey showed on Wednesday.

The Markit Stanbic Bank Kenya Purchasing Managers’ Index (PMI) for manufacturing and services was 53.2, the same as in October. Readings above 50 indicate growth.

The survey said new orders that Kenyan companies received during the month expanded at the slowest rate in six months. Output grew at the fastest pace in four months.

Kenyan authorities last month removed a cap on commercial interest rates in place since 2016 that had been blamed for stifling private sector lending growth and reducing the effectiveness of monetary policy.

Jibran Qureishi, regional economist for East Africa at Stanbic, said the change would boost business activity.

“As commercial banks begin to extend credit..., the private sector will be in a much better position than it ...has been for the past two and a half years,” he said.

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

Glencore's Glasenberg says successor could be in place next year

LONDON (Reuters) - Glencore could announce a new CEO next year once a new team is in place after a transition process starting in the new year, its current chief executive said on Tuesday.

The mining and trading company’s shares fell 4%, taking this year’s losses to about 19%, with investors unimpressed by an update on the company’s priorities and expected output.

The stock has been dragged down by problems in Democratic Republic of Congo and a U.S. Department of Justice investigation.

Asked by investors for detail on a planned management transition, Ivan Glasenberg said there was “a good crop of people” but did not offer names.

“The old guys will be leaving. How soon? We’re reviewing it right now. I would imagine it would occur next year,” said Glasenberg, who has been at the helm since 2002.

“I’ve always said I don’t want to be an old guy running this company. As soon as those guys are ready to take over, I’ll be ready to step aside. No exact time, but as soon as I believe they’re ready, I will step aside.”

Glasenberg also said negotiations were continuing in Democratic Republic of Congo over the company’s objections to a 2018 mining code that demands companies pay higher royalties.

“We are reviewing it and we continue talking to the government to see what we can do there,” Glasenberg said.

South Africa's rand steady as investors weigh GDP slide

JOHANNESBURG (Reuters) - South Africa’s rand was steady early on Wednesday, recovering some of the ground it lost in the previous session after the economy contracted in the third quarter.

At 0720 GMT, the rand was 0.05% firmer at 14.6310 per dollar, having slipped to a session-low of 14.6980 on Tuesday as the 0.6% contraction to gross domestic product (GDP) snapped the currency’s four-session winning streak.

A Reuters poll of analysts had forecast a marginal 0.1% quarter-on-quarter expansion.

A broad slowdown in Africa’s most advanced economy, led by mining, manufacturing and agriculture, have reignited fears of credit downgrades, spooking investors that have been lured in by the currency’s high yield.

Traders said nervousness around global growth and the ongoing trade war between China and the United States would keep the rand on the backfoot.

“The rand/dollar still has the potential to test the lower bounds of its current trading range, though the status quo of 14.60 should sustain,” said analyst at RMB Nema Ramkhelawan-Bhana.

U.S. President Donald Trump warned on Tuesday that a trade deal with China might not be in place until after the 2020 U.S. presidential election, hurting risk-demand already reeling after the United States said it would restore tariffs on metal imports from Brazil and Argentina.

Bonds were firmer, with the yield on the benchmark 2026 debt down 2 basis points at 8.465%.

South Africa’s Taste Holdings loses second CEO this year as focus shifts to luxury

JOHANNESBURG (Reuters) - South African retail and quick service restaurants company Taste Holdings said on Tuesday its group chief executive Dylan Pienaar would step down with immediate effect, sending its shares lower.

The current head of Taste’s luxury food division, Duncan Crosson, has been appointed as the new group CEO with immediate effect. Crosson will be Taste’s third CEO this year with Pienaar only appointed in March.

The group said in a statement that Pienaar’s decision to step down was a result of Taste’s strategy to focus on its luxury jewellery brands NWJ, Arthur Kaplan, and World’s Finest Watches.

The group’s shares were 20% lower at 4 cents a share by 1700 GMT.

Taste said last month that it would sell its Starbucks and Domino’s Pizza franchises in South Africa, retreating from a food industry that has been hard hit by the sluggish local economy. It has already sold 13 Starbucks stores to a consortium for 7 million rand.

Taste hopes to return to profitability within a year as a result of the restructuring plan, having faced declining revenues as high unemployment rates depressed retail sales.

South African economy contracts 0.6% in third quarter

PRETORIA (Reuters) - South Africa’s economy shrank for second time in three quarters this year, data showed on Tuesday, as productive sectors fell across the board and companies slashed inventories, amplifying the chances of ratings downgrades to junk.

Africa’s most advanced economy has struggled to emerge from a deep slump in the nearly two years since President Cyril Ramaphosa took the helm with promises to reform and is now on the cusp of losing its last investment grade rating from Moody’s, and billions of rands of investment with it.

Gross domestic product contracted 0.6% in the third quarter against a 3.2% expansion in the second quarter, Statistics South Africa said.

In the first quarter, GDP contracted by 3.1% following nationwide electricity blackouts by state power firm Eskom, and while the cash-strapped utility resumed blackouts in September third quarter activity was hit hard by lower production in mining, manufacturing and agriculture that analysts said was linked to lower investment by firms and smaller exports.

Inventories, a measure of investment by firms, fell 9.5 billion rand in the quarter, with exports subdued at q/q growth of 3.5%. The stats agency said some companies had indicated cutting stocks in the previous quarter in anticipation of lower demand.

“If there’s no production in mining and manufacturing, and those are the type of products we are exporting, then inventories will fall. And if we’re not producing goods, you don’t have anything left to export,” said Joe de Beer, senior economist at Stats SA.

Sharp dips in mining, manufacturing and agriculture were the largest contributors to the negative growth in the third quarter, with agriculture affected by a severe drought which has forced government to ration water supplies nationwide.

Mining production fell 6.1% in the quarter, manufacturing was down 3.9% while agriculture contracted by 3.6%. The three taken together represent about a quarter of domestic product and a large chunk of taxes revenues and employment.

The latest data piles the pressure on Ramaphosa, particularly from ratings agencies which have flagged weak growth as a major risk, and investors weary of increasing state debt as revenues slide. [nL8N27F5LX]

“Growth in the Moody’s criteria is a highly sensitive measure. They already expect sub-1% long run average growth and this will impact the fiscus and imply that our debt and deficit metrics have worsened,” said economist at Nedbank Reezwana Sumad.

Moody’s is the last of the top three agencies to rate the country’s debt at investment level, and it is set to review the rating in March after downgrading the outlook to negative in November. [nL8N27H62H]

“These numbers certainly do support the notion of a downgrade by Moody’s in 2020,” Nedbank economist Sumad said.

“In a political environment where it is difficult to cut government wages you could see treasury forced to raise wealth and personal taxes, and that’s something it doesn’t want to do.”

Kenya forcing importers to use costly new Chinese railway, businessmen say

MOMBASA, Kenya (Reuters) - Kenya’s new Chinese-built railway should have been a boon for business. The $3.3 billion line sliced hours off the journey from the port city of Mombasa to the capital, Nairobi.

But some importers said their transport costs shot up by nearly 50% when they used the rail due to extra fees, more time spent clearing goods at the congested Nairobi train depot and the need to send a truck to collect the goods from there.

These importers used to truck their goods in from the coast. But port authorities now say businesses based in Nairobi and upcountry must use the new line because the Mombasa port is contracted to supply it with a minimum amount of cargo.

“KPA has an obligation to feed the railway ... we were the guarantors of the rail,” said Daniel Manduku, head of the state-run Kenya Ports Authority.

The railway’s problems are a cautionary tale, both for developing nations loading themselves with Chinese debt, and for China as it seeks to expand global trade links and project soft power through its massive Belt and Road initiative.

“The vast majority of its (China’s) overseas spending has no detectable effect on economic growth,” said Bradley Sparks, executive director of AidData, a research facility that tracks development finance at William and Mary university in Virginia.

China has sought to allay fears that its infrastructure projects overload some countries with debt. [nL3N22909E]

Last year, it agreed to restructure more than $12 billion in repayments owed by Ethiopia, whose Chinese-funded railway is also struggling. [nL5N22Y26W]

Now some Kenyan politicians are asking whether their railway was worth the cost.

Hundreds of people - residents, business owners and local leaders - hold weekly demonstrations in Mombasa against the mandatory movement of cargo by rail.

“This is a revolution,” lawmaker Mohammed Ali said earlier this month as demonstrators carried a mock coffin branded “RIP China Colonisation” in blood-red letters.

BUSINESSES UNDER PRESSURE

The contract between China’s Exim Bank, the Kenya Ports Authority (KPA) and Kenya Railways requires KPA to provide 1 million tonnes of cargo to the railway per year, rising to 6 million by 2024.

KPA says rail cargo is expected to hit 5 million tonnes this year, after more than 4 million last year.

Mombasa is projected to handle 34 million tonnes of cargo this year; most does not go by rail. Cargo destined for Mombasa, or countries other than Kenya, can still go by road.

But Kenyan importers in and around Nairobi say they have been forced to use the line since October last year. The port confirmed the policy in August, but rescinded the order in October after protests. Businesses say little has changed and they are still required to use the more expensive railway.

Port authorities are diverting shipments to the new railway, said a Nairobi-based customs clearance agent. “You are made to pay for it whether you like it or not.”

Moving a 40-foot container to Nairobi by rail costs 80,000 shillings ($800) - roughly the same as a truck, said Mercy Ireri, chief operations officer for the Kenya Transporters Association.

But importers must also pay at least 25,000 shillings for a truck to collect the goods from the Nairobi depot and 15,000 shillings in depot fees, said three businessmen who asked not to be named.

LOAN REPAYMENTS

Manduku, also a board member of Kenya Railways, said the higher charges are necessary to meet loan repayments.

Kenya owes Exim Bank of China 660 billion shillings for the railway and other projects, about a tenth of its total national debt. The bank did not immedately respond to a request for comment.

Kenya Railways did not respond to requests for comment. The China Road and Bridge Corporation, which built the railway and now runs it through its Kenya subsidiary Africa Star Operations, said it did not set policy on cargo.

The exact terms of the agreement are not public.

The new line opened in 2017. Running alongside a dilapidated track British colonialists built a century ago, it cut the Nairobi-Mombasa journey to four hours from 12 for passengers and to eight hours from 24 for cargo.

China supported the directive requiring importers to use the railway, said Wu Peng, Beijing’s ambassador in Nairobi.

“That is a responsible and smart move by the Kenyan government,” Wu told Reuters.

After the directive was lifted, the embassy said the line “has revolutionized cargo and passenger movement”.

Parliament summoned the transport minister to answer questions about the cargo policy in November but he did not appear. Esther Koimett, principal secretary at the department of transport, told Reuters the government was no longer making importers use rail.

But Daniel Nzeki, chairman of the Container Freight Stations Association of Kenya, and Ireri of the Kenya Transporters Association, said port security in Mombasa was still preventing trucks from picking up some cargo.

“It is a circus,” Nzeki said.

Pound surges to two-year high against the euro

Sterling has jumped after opinion polls suggested the UK would avoid a hung parliament after next week's election.

The pound reached a seven month high against the dollar and its highest level against the euro since May 2017.

The move came after polls suggested a 10-point lead for the Conservative party and a parliamentary majority.

However, analysts cautioned against relying too much on one poll and said the pound gained momentum after it went past the $1.30 mark.

The pound has risen sharply since October, gaining 6% in two months, after the EU granted Britain an extension to its departure from the bloc.

This week sterling climbed further as investors saw the prospect of a hung parliament receding.

Jeremy Stretch at CIBC World Markets said move was caused by traders consolidating all the recent polls and deciding that a Conservative majority was the most likely outcome.

The markets see that as ending the stalemate over Brexit.

However, Michael Brown, senior analyst at Caxton, said: "As we saw in 2017, polls can sharply narrow as we approach polling day.

"If a repeat situation pans out, seeing Labour gain ground and hung parliament territory approach, sterling will likely face stiff headwinds."

The pound gained as much as 0.83% on Wednesday to touch $1.31 while against the euro, the pound hit a high of €1.183, up 0.84%.

Jane Foley from Rabobank said the pound's rise was mainly due to "technical reasons" after it went over the "psychological" $1.30 level.

The initial referendum result in 2016 sent the pound sharply lower against other currencies. Since then its value has tended to rise when a Brexit deal, particularly one maintaining closer ties with the EU, was in prospect.--BBC

Johnson backs tech tax despite Trump's threats

Prime Minister Boris Johnson has said he would press ahead with a digital sales tax even after the US threatened to punish France for a similar move.

In a proposal first outlined last year, large online companies face a tax of 2% of UK sales from April 2020.

Mr Johnson said digital companies needed to make a "fairer contribution".

Donald Trump has threatened to impose taxes on French goods in retaliation for a digital services tax that would affect Google, Amazon and Facebook.

Ahead of Wednesday's Nato meeting in Watford, the US President said: "We've taxed wine and we have other taxes scheduled.

"We'd rather not do that, but that's the way it would work. So it's either going to work out, or we'll work out some mutually beneficial tax."

The US said it would apply tariffs of up to 100% on $2.4bn (£1.8bn) of cheese, Champagne, handbags and other French products.

Budget 2018: Tech giants face digital services tax

US threatens tax on champagne and French cheese

The US has made clear that other countries pursuing a digital sales tax could face similar action.

Multinational companies including Google and Facebook have been criticised for paying very little tax in some countries despite booking large revenues due to the way profits can be reported in lower tax jurisdictions.

A multilateral solution is being sought but some countries, including the UK, are introducing interim taxes.

"On the digital services tax, I do think we need to look at the operation of the big digital companies and the huge revenues they have in this country and the amount of tax that they pay," Mr Johnson said late on Tuesday.

"We need to sort that out. They need to make a fairer contribution."

The UK's tax was first suggested by Philip Hammond, the former chancellor and could initially raise almost £500m a year.

The pledge to implement the tax is contained in the Conservative manifesto.

The Labour Party has also promised a tax on "multinationals". In the party's press release about the plans last month, "Amazon, Facebook and Google" were mentioned specifically.

France is imposing a 3% tax on any digital company with revenue of more than €750m ($850m; £670m), of which at least €25m is generated in France.

The tax will be back-dated to early 2019, and is expected to raise about €400m this year.--BBC

HSBC to bring in single overdraft rate of 40%

HSBC is to bring in a single overdraft rate of 39.9% for UK customers from March 2020, as much as quadrupling the rate it charges some customers.

However, the bank is removing a £5 daily fee for going into an unarranged overdraft and introducing an interest-free £25 buffer on some accounts.

It follows a similar move from Nationwide Building Society in July.

It comes in response to tough new borrowing rules from regulators designed to protect consumers.

But one analyst warned that steep overdraft rates could now become the "new normal".

HSBC UK currently charges rates of 9.9% to 19.9% on arranged overdrafts, and customers using them will now pay more.

The £25 buffer will apply to Bank Accounts and Advance Bank Accounts, providing leeway for those going slightly overdrawn.

Bank overdraft fees in major shake-up

Nationwide customers refunded £6m in charges

HSBC said that as a result of this and the removal of the £5 daily fee for unarranged overdrafts, seven in 10 who use an overdraft would be better off or the same as a result of the changes.

Madhu Kejriwal, HSBC UK's head of lending and payments, said: "By simplifying our overdraft charging structure we are making them easier to understand, more transparent and giving customers tools to help them make better financial decisions."

The move comes in response to Financial Conduct Authority's plans to shake up the "dysfunctional" overdraft market - including stopping banks and building societies from charging higher prices for unarranged overdrafts than for arranged overdrafts.

The new rules, which come into force next April, will require providers to charge a simple annual interest rate on all overdrafts and get rid of fixed fees.

But there have been concerns that banks will hike authorised overdraft charges to claw back some revenue lost from unauthorised overdraft fees.

In July, Nationwide also unveiled a new single rate of 39.9% across its adult current account range. Its changes came into force in November.

Helen Saxon, banking editor at MoneySavingExpert.com, said: "With both of the first banks to announce changes moving overdraft interest rates to around 40%, we have to wonder if this is the new normal."

The FCA has acknowledged banks may look to increase their arranged overdraft prices as a result of the new rules.

But it argues the net effect will still be better for consumers - and increased competition between providers as a result of the changes will constrain any price increases.

Rachel Springall, a finance expert at Moneyfacts.co.uk, said: "It's disappointing to see such a hike in overdraft charges but there may be more brands coming out in the coming weeks to announce changes too.

"This shake-up is designed to make things fairer and more transparent to consumers.

"Borrowers would be wise to scrutinise any changes to their current account and look to switch elsewhere if they find that the account has lost its shine."--BBC

How China-US rivalry is dividing the internet

When Hyunjin Seo visited Beijing in July last year, she scrolled through Google News on her smartphone and discovered several reports about an attack on the city's US embassy.

An associate professor at the University of Kansas's journalism department, she bypassed China's strict digital media censors thanks to the roaming plan of her US phone firm. This allowed her to access websites such as those from Google not available in China.

"I was telling my Chinese friends about the bomb detonating outside the [US] embassy and they didn't know what I was talking about, because this news wasn't appearing in their search feeds," recalls Prof Seo, who teaches courses on digital media.

Rivals is a season of in-depth coverage on BBC News about the contest for supremacy between the US and China across trade, tech, defence and soft power.

Her experience is common for any westerner visiting China.

The internet in the world's most populous country is heavily restricted and censored, leading experts to speculate that in the future there could be two distinct internets - one led by China and one by the US.

The point was made last year by former Google chief executive Eric Schmidt.

At a private event, when an economist asked Mr Schmidt (now a board member of Google parent company Alphabet) about the potential of the internet fragmenting into different sub-internets with different regulations, he replied, "I think the most likely scenario now is not a splintering, but rather a bifurcation into a Chinese-led internet and a non-Chinese internet led by America."

Such a divide is already in place, due to the Great Firewall of China, a government-sponsored programme that censors content within its digital borders. Chinese users can't access Facebook, Twitter, Dropbox or Pinterest, among other popular sites.

They also can't read online information on the Tiananmen Square massacre or criticism aimed at President Xi Jinping. Even online images of Winnie the Pooh have been banned in China after protesters compared President Xi's face to the classic Disney character.

"In one of the biggest markets in the world, tech companies are leaving because they can't fully operate how they want to, by freely sharing information online," notes Ms Seo.

Such censorship means overseas businesses are hampered if they want to expand into China - one of the most attractive markets in the world.

No matter the size of the company, to operate in China overseas firms have to jump through hoops that can cause them problems.

While Apple services and products are available in China, the California-based tech giant has sparked controversy over its activities in the Chinese market. In 2017, China asked Apple to remove the New York Times and Skype app from its App Store. Apple complied.

Google has also waded into Chinese waters, only to be met with intense criticism. Most notably, Google secretly worked on a version of its search engine to go up against Chinese-born Baidu.

The Chinese-only Google would censor some results relating to human rights violations and controversial laws. "Project Dragonfly" was uncovered in a 2018 article by The Intercept, and Google eventually scrapped the project.

"When you enter search terms in China on their search engine, you get a different result from what you see in the West," says Sarah Cook, senior China research analyst at Freedom House, a US independent watchdog focusing on human rights. "The red lines of what is being censored are constantly moving."

2019 marks the fourth year in a row that Freedom House has ranked China at the bottom for Internet freedom in its annual report "Freedom on the Net".

A business looking to enter China has to either play by the rules or leave. For example, LinkedIn doesn't allow Chinese users to access politically sensitive profiles or posts from people outside the country.

Why such restrictions on a tool specifically designed to open up digital realms of information, media and debate?

"That censorship relates to the legitimacy of the Chinese Communist Party and promoting an official narrative about the nation-state," says Renren Yang, an assistant professor of modern Chinese popular culture at the University of British Columbia.

While Chinese internet users can't use Google and WhatsApp, they have Chinese equivalents, Baidu and WeChat.

Meanwhile, Amazon shut down its online store in China earlier this year in the face of poor sales trying to compete against Alibaba.

Isn't China already crafting its own parallel internet?

"An isolated Chinese internet is cut off from the rest of the world," says Ms Cook. "And what is worrying is that other countries are copying what China is doing by blocking access to certain sites or slowing down net service during protests or rallies."

Prof Yang says it would only benefit China to usher in more Western companies seeking to bring its services to the country. "For example, competition with Chinese local telecom companies will spawn the invention of new technologies and new services that people can afford and utilize. Competition brings forth innovation."

Prof Seo isn't optimistic China will change its online tune anytime soon. "Since China has replaced Western media with their own apps and sites, they don't really need western tech companies."

Other experts are hopeful that a splintering of the Internet won't be permanent.

Prof Yang says: "One day, I'd like to see the Great Firewall come down, just like the Berlin Wall did."--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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