Major International Business Headlines Brief::: 11 December 2019

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Major International Business Headlines Brief::: 11 December 2019

 


 

 


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*  South African mines grind to halt as floods worsen power crisis

*  Qatar Airways to take 60% stake in new Rwandan international airport

*  South Africa steps up power cuts after flooding hits major plant

*  Petra Diamonds halts South Africa mines after Eskom ups power cuts

*  Rwanda's inflation jumps to 6.9% year-on-year in November - stats office

*  South Africa's Tongaat posts narrower annual headline loss

*  Egypt's annual urban consumer inflation 3.6% in November from 3.1% in
October

*  FACTBOX: Struggling South African state-owned firms

*  Can governments ever run out of money?

*  Amazon’s fight with Trump is about much more than $10bn

*  USMCA: Agreement reached on Nafta trade deal replacement

*  Exxon wins New York climate change fight

*  McDonald’s latest fast food chain to join vegan craze

*  Maurice Saatchi quits advertising firm he co-founded

 

 


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South African mines grind to halt as floods worsen power crisis

JOHANNESBURG (Reuters) - Mines across South Africa are shutting down after
flash flooding caused the largest power blackouts in more than a decade,
threatening a key export sector in a further blow to the country’s already
slowing economy.

 

Heavy rains across parts of South Africa have submerged whole
neighbourhoods, leading to mass evacuations and aggravating problems at
state-owned utility Eskom, which has been struggling to keep the lights on
since 2008.

 

Harmony Gold, Impala Platinum, and Sibanye-Stillwater all said they had been
forced to cut production since Monday owing to power shortages.

 

“There are very few underground mines that operated overnight and will be
operating normally today,” said a spokesman for the Minerals Council, an
industry body.

 

The mining industry contributed 350.8 billion rand ($23.85 billion) to the
South African economy in 2018, according to the Minerals Council, around 7%
of gross domestic product (GDP).

 

Eskom said on Tuesday it planned more load-shedding, a South African term
for planned power cuts, having cut up to 6,000 megawatts (MW) from the
national grid on Monday after flooding triggered failures at its Medupi coal
fired plant.

 

President Cyril Ramaphosa cut short a state visit to Egypt in order to meet
Eskom officials, local news agency EWN said on Tuesday. The presidency did
not immediately respond to a request for comment.

 

“The ongoing load shedding is devastating for the country ... causing our
economy great harm and disrupting the lives of citizens,” Ramaphosa said in
a statement earlier on Tuesday. “The energy challenges in this country will
not be resolved overnight.”

 

Eskom’s chief operations officer Jan Oberholzer told the eNCA news channel
that the crisis was “manageable” with 4,000 MW of Monday’s outages
attributable to the flooding.

 

“The outlook for this week is to maintain load shedding because of the
weather, because of the coal handling challenges that we’ve got,” he said.

 

SHUTDOWN

Harmony Gold called off its underground shifts, saying they would resume as
soon as Eskom could provide assurances the power supply would be more
reliable, while Impala Platinum stopped production at its Rustenberg and
Marula mines after it was left functioning at 20%-30% of normal power.

 

It later added that losses had already amounted to 120 million rand.

 

“We certainly can’t risk any attempt at production with this level of
power,” a spokesman for the platinum miner said.

 

Anglo American said its operations had been affected but gave no further
details. The company mines coal, diamonds, iron ore, and platinum in South
Africa through its businesses De Beers, Kumba Iron Ore and Anglo American
Platinum.

 

Sibanye-Stillwater shut all its deep-level mines on Monday but was aiming to
send miners back underground for the afternoon shift on Tuesday at 1400 GMT.

 

A Gold Fields spokesman said the impact on its South Deep mine has been
‘limited’ so far, but prolonged power cuts at the current frequency would
present challenges.

 

Petra Diamonds Ltd said on Monday it was in the process of halting
operations at its Cullinan, Finsch and Koffiefontein mines in South Africa
after Eskom asked the miner to reduce its electricity load.

 

($1 = 14.7075 rand)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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Qatar Airways to take 60% stake in new Rwandan international airport

KIGALI (Reuters) - Qatar Airways has agreed to take a 60% stake in a new
$1.3 billion international airport in Rwanda, the state-run Rwanda
Development Board said on Twitter on Monday.

 

The board said a first phase of construction would provide facilities for 7
million passengers a year in the Bugesera district, about 25 km south east
of the capital Kigali. A second phase, expected to be completed by 2032,
would double capacity to 14 million passengers a year.

 

The country’s infrastructure minister Claver Gatete told a news conference
that a construction company was still being sought to build the airport, and
that once work starts, the first phase would take five years to complete.

 

Qatar Airways declined to immediately comment outside of normal business
hours.

 

The plans for the new airport are a modification of those drawn up in 2017
for a smaller facility with a maximum capacity of 4.5 million passengers a
year in the same location.

 

Company and government officials said at the time that Rwanda had signed a
deal with the African division of Portuguese construction firm Mota-Engil to
build an international airport at a cost of $818 million.

 

Gatete said the investment from Qatar Airways would enable it to build the
larger airport.

 

“We are looking for a bigger sized airport. That’s why we are looking for a
bigger investor,” he said.

 

Qatari ruler Sheikh Tamim Bin Hamad Al Thani is currently visiting Kigali
for the presentation of the International Anti-Corruption Excellence (ACE)
Award.

 

Gatete said there was also a possibility that Qatar Airways would help
state-run carrier RwandAir to expand, but gave no more details.

 

 

 

South Africa steps up power cuts after flooding hits major plant

JOHANNESBURG (Reuters) - South Africa’s state energy company Eskom is
cutting up to 6,000 megawatts (MW) of power from the national grid after
heavy rain and flooding triggered failures at its Medupi plant, disrupting
supplies to businesses and households across the country.

 

The cut is the largest since Eskom introduced a programme of rolling
blackouts, known locally as load-shedding, in 2008.

 

“This follows a technical problem at Medupi Power Station impacting
additional generation supply. The heavy rains have caused coal handling and
operational problems at several stations,” Eskom said in a statement on
Monday.

 

The company had earlier said it would cut 4,000 MW from the grid as it
entered a fifth day of rolling blackouts.

 

Large parts of the usually glittering skyline of financial hub Johannesburg
were blanketed in darkness on Monday, while malfunctioning traffic lights
caused traffic jams stretching out from the city centre into residential
suburbs.

 

Miner Petra Diamonds said it had halted operations at its mines, adding it
was bringing all workers back above ground for safety.

 

Eskom has total nominal capacity of around 44,000 MW. On Monday, the firm
said unavailable capacity had risen to about 13,000 MW, forcing it to roll
out nationwide blackouts.

 

An Eskom spokeswoman told local radio that South Africans could be without
electricity for many parts of the day.

 

“Stage 6 load-shedding means customers are likely to get more waves of
load-shedding ... So you’d get it in the morning, in the afternoon and again
in the evening,” Dikatso Mothae said in an interview with radio station
Power98.7.

 

“We’ve prepared for the rain but this flooding has been significant.”

 

 

 

Petra Diamonds halts South Africa mines after Eskom ups power cuts

(Reuters) - Petra Diamonds Ltd said on Monday it was in the process halting
operations at its Cullinan, Finsch and Koffiefontein mines in South Africa
after state utility Eskom asked the miner to reduce its electricity load.

 

Production, hoisting and processing have stopped with immediate effect and
Petra Diamonds is now removing all people from underground, except those
required for essential services, it said in a statement.

 

Eskom on Monday said it would cut up to 6,000 megawatts of power from the
national grid as heavy rain and flooding triggered failures at its Medupi
plant.

 

Petra said only pumping to prevent flooding and ventilation for safety was
being allowed at the mines.

 

Petra, which has been fixing its balance sheet after spending much of this
decade investing in its flagship Cullinan mine, said it would issue an
update once its knows how long the load curtailment will last and what
impact this is likely to have on its production performance.

 

 

 

Rwanda's inflation jumps to 6.9% year-on-year in November - stats office

KIGALI (Reuters) - Rwanda’s year-on-year inflation rose to 6.9% in November
from 4.4% a month earlier, the statistics office said on Tuesday, reflecting
an increase in the prices of food items in local markets.

 

Food and non-alcoholic beverages went up to 16.2%, from 9.9% in October,
while alcoholic beverages, tobacco and narcotics rose to 17.2% from 6.9%,
the office said.

 

 

 

South Africa's Tongaat posts narrower annual headline loss

JOHANNESBURG (Reuters) - Tongaat Hulett reported a narrower headline annual
loss on Tuesday, as the scandal-hit South African sugar producer issued a
much-delayed earnings report that revealed the impact of accounting fraud
and corporate governance failures.

 

Tongaat, which has operations in South Africa, Mozambique and Zimbabwe, said
headline loss per share came in at 823 cents in the year ended March 31
compared with a loss of 861 cents in the restated 2018 figures.

 

The agriculture and agri-processing firm, which produces a range of
sugarcane and maize-based products, delayed the results after a financial
review revealed certain accounting practices that needed to be re-examined.

 

 

 

Egypt's annual urban consumer inflation 3.6% in November from 3.1% in
October

CAIRO (Reuters) - Egypt’s annual urban consumer price inflation rose to 3.6%
in November from 3.1% in October, the official statistics agency CAPMAS said
on Tuesday.

 

Egypt is emerging from a three-year IMF-backed economic reform programme
after its annual inflation rate increased to 33% in 2017. The government has
hiked domestic fuel prices several times, most recently in July, as part of
the terms of the $12 billion agreement.

 

Urban inflation decreased 0.3% month-on-month. The slight rise year-on-year
was “because of unfavourable base year impacts,” said Yara Elkahky, an
economist at Naeem Brokerage. “But it is good news and aligned with our
estimate.”

 

Annual urban consumer price inflation had fallen for six consecutive months,
between May and October. The central bank has made three consecutive cuts to
interest rates since August, slashing them by a cumulative 350 basis points.

 

Radwa El-Swaify, head of research at Pharos Securities Brokerage, also said
the figures were largely in line with expectations. She expects base year
effects will push inflation higher in December, to 6.5-7% year-on-year.

 

 

 

 

FACTBOX: Struggling South African state-owned firms

JOHANNESBURG (Reuters) - South Africa is grappling with multiple problems at
its heavily indebted state-owned firms, the most serious of which are at
ailing state power utility Eskom.

 

President Cyril Ramaphosa has made turning around Eskom and other failing
state companies a priority as he struggles to reverse years of stagnant
growth, injecting billions of rand in rescue funds.

 

But the problems show few signs of abating, with the biggest power blackouts
in a decade shutting down mining operations across the country this week,
while the national airline has been placed into a form of bankruptcy
protection.

 

The support has contributed to a fourfold rise in the country’s debt over
the last 10 years, pushing it past the 60% of GDP threshold seen as red-line
by ratings agencies and investors.Below are some of the state firms which
are being kept afloat with bailouts that the government is growing
increasingly reluctant to grant.

 

ESKOM

In October the Treasury said Eskom, which provides 90% of the country’s
power but has battled to keep the lights on since 2008, was the “most
serious risk” to its fiscal position owing to mostly-government backed debt
of nearly 500 billion rand ($34.00 billion).

 

The utility has total nominal capacity of around 44,000 megawatts (MW) but
has struggled to keep pace with demand because its coal-fired power stations
are so unreliable.

 

The government has granted Eskom 230 billion rand over the next 10 years and
in October gave it an additional 26 billion rand in emergency funds.

 

The following month the company said it expected to make a loss of around 20
billion rand for the year ending March 2020.

 

It is also fighting the energy regulator in court to grant it double digit
tariffs increases for the next three years to plug a 100 billion rand
revenue hole.

 

Ramaphosa has initiated a break up of Eskom over the next three years to
increase competition, hoping to sell off parts of the monopoly.

 

SAA

Ramaphosa instructed the government this month to put South African Airways
(SAA) into a business rescue - a form of bankruptcy protection - after an
eight-day strike in November left it close to collapse.

 

Formed in 1934, SAA is one of the world’s longest-established airlines but
the state-owned carrier has not made a profit since 2011. It made losses of
more than 5 billion rand in each of the past three years, according to
company documents reviewed by Reuters.

 

In October, the Treasury said cumulative losses were 28 billion rand since
2006, adding the airline was insolvent and “in its current configuration,
unlikely to ever generate sufficient cash flow to sustain its operations.”

 

Public Enterprises Minister Pravin Gordhan said bailouts for the airline
have amounted to more than 20 billion rand in the past three years.

 

DENEL

Denel is the largest manufacturer of defence equipment in Africa, making
military kit for the South African armed forces and clients in Africa, the
Gulf and Europe.

 

The company said in March it was technically insolvent, recording a loss of
1.9 billion rand while struggling to pay salaries and suppliers, prompting
the government to hand it a 1.8 billion rand bailout in August.

 

The government’s total debt guarantee for the arms maker is 4.4 billion
rand.

 

SABC

The South African Broadcasting Commission (SABC) was granted a 3.2 billion
rand bailout in October as it continued to bleed viewers and with revenue
sinking after years of mismanagement that led to the firing of its entire
board in 2018.

 

The national broadcaster recorded a net loss of 482.4 million rand in
2018/19 after a 622 million rand loss in the previous year. It has said it
is considering layoffs. The company’s total liabilities are 3.8 billion
rand.

 

SANRAL

The South African National Roads Agency Limited (SANRAL) has suffered
average annual losses of 1 billion rand since 2014/15.

 

The road authority had already used 30.3 billion rand of its 39 billion rand
government guarantee by March, having struggled to break even on a network
of electronic highway tolls in the economic heartland of Gauteng.

 

A majority of drivers have refused to pay the tariffs, leaving the firm deep
in the red.

 

PRASA

The Passenger Rail Agency of South Africa (Prasa) went into administration
this week. It said in its annual results that it offered a “service that is
poor, unreliable, unpredictable and that is not safe”. Passenger trips have
fallen to 208 million in 2018/19 from 516 million in 2014/15.

 

In the 2018/19 financial year, the rail operator posted a 1.8 billion rand
loss.

 

The Treasury has granted Prasa 41.5 billion rand over the next three years
to modernise the rail network.

 

($1 = 14.7075 rand)

 

 

 

Can governments ever run out of money?

In the UK and US, political parties are promising spending splurges to
appease voters after a decade of squeezes.

 

Whether it's more nurses, frozen tax promises, free broadband internet or
more social housing in the UK; or tax cuts and green energy investments in
America, public spending is set to surge.

 

This sudden abandonment of fiscal rectitude comes amid the rise in
prominence of a way of thinking about money, spending and the economy -
Modern Monetary Theory (MMT).

 

According to its key architect, US businessman Warren Mosler, it is based on
a simple idea - that countries that issue their own currencies can never run
out of money in the same way a business or person can.

 

This is important to understand because it means when someone says the
government can't do something for want of money, that's simply not
applicable, says Mr Mosler. A government can no more run out of money than a
football stadium can run out of goals scored.

 

The theory has become popular among economists and political thinkers,
particularly on the left - such as rising star of the US Democrats
Alexandria Ocasio-Cortez.

 

US Democrat Alexandria Ocasio-Cortez has said MMT "absolutely" needs to be
"a larger part of our conversation".

Using MMT as a basis, they argue that countries should be able to borrow and
spend more freely, and not be as concerned by things like the national debt
or the deficit - the difference between a government's income and outgoings.

 

The idea is fiercely contested.

 

"I'm not a fan of MMT - not at all," billionaire investor Warren Buffett
told Bloomberg News in March.

 

MMT is "wrong" Federal Reserve chairman Jerome Powell said a month before
that.

 

But MMTers say they do believe in being fiscally responsible, and that
critics misunderstand.

 

'Spend and tax'

The story starts with any government's desire to fund public services, which
it does through taxation. Citizens need money to pay that tax, and they work
to get it, Mr Mosler says.

 

However, rather than this money appearing from thin air, he says, "all the
funds to pay taxes come only from government or its agents" because they
will have printed or minted it.

 

The government will also have had to spend that newly issued cash in the
first place, so it can find its way into the economy and the public can get
their hands on it.

 

"Every member of parliament will tell you we have to get money first by
taxing to be able to spend. And what we don't get by taxing we have to
borrow in the market and pay interest," Mr Mosler says. "It's not true."

 

As such, he says the tax-and-spend orthodoxy embraced by most governments
should be rethought. What's actually going on is spend and tax, which paints
guiding economic principles such as the debt and deficit in entirely
different lights.

 

MMT also challenges the long held assumption that governments need to borrow
money from international markets to get what they need. Mr Mosler calls the
idea "an anachronism" - countries can instead just print what they need.

 

Critics see such ideas as far too radical, saying they would be damaging and
lead to sky-high inflation. But similar principles have actually played a
huge role in stabilising the global economy since the financial crisis of
2008.

 

Who is Warren Mosler?

Mr Mosler started off his financial career in banking in 1973 collecting
loans at the Savings Bank of Manchester in Connecticut. As well as managing
money, he has also built supercars and a ferry. He sold his car businesses
and a bank he owned in 2013.

 

He operates from his base in the US Virgin islands.

 

Central banks have pumped some $11tn into the world's financial system by
buying up government bonds and corporate debt through what is known as
quantitative easing (QE).

 

During that time inflation has remained subdued. Among the G7 group of large
economies, Canada currently has the largest annual price increases at a
manageable 1.9%.

 

And while MMTers argue QE has driven up asset prices, worsening inequality,
they believe this could have been remedied by more generous government
spending - something they believe is necessary to help economies in crisis
recover.

 

This has led some to liken MMT to the work of late British economist John
Maynard Keynes, who also argued that economies in crisis should spend more
in order to revive growth.

 

Now, after a decade of cuts and austerity, politicians of all stripes seem
content to spend, and discussions about MMT have entered the spotlight.

 

In the UK, Conservative and Labour politicians have promised hundreds of
billions of pounds of extra spending ahead of the 12 December general
election. In the US, public debt hit a record $22trn in February following
hefty tax cuts brought in by the Trump administration.

 

But Jo Michell, associate professor in economics at the University of the
West of England, Bristol says fans of the theory - many of whom share their
views online - can be quite uncompromising.

 

"There's a very vocal online movement to really push MMT and any criticism
is very strongly acted against," he says. "It does become quite unpleasant."

 

There are more technical criticisms of the theory too. Some argue that if
governments simply print money to fulfil their needs, then interest rates
will languish around zero - something that has been a by-product of QE.

 

As a result, anyone trying to save will find it extremely difficult to grow
their money.

 

"What does that do to your pension fund system, insurance, banking, the
entire basis of the financial system?" asks Prof Michell.

 

Economist Frances Coppola also argues that by focusing on fiscal - spending
- policy and ignoring interest rates, MMTers are making a mistake.

 

"My view is you need both monetary and fiscal policy and you should not
hobble either," she says.

 

Despite the reservations, MMT is winning some grudging respect in the
financial services sector.

 

"Conventional thinkers are wrong to dismiss MMT out of hand. But we must
consider long and hard the institutional framework we need if the central
bank is going to provide the financing for a big increase in government
spending," said Jamie Dannhauser, economist at UK money manager Ruffer.

 

He worries that by going down a path of high government spending - backed up
by printed money - we may not have the ability to "press the brake again" if
there is a crisis.

 

He also believes having politicians in charge of printing money to finance
government spending is a foolish idea. A body independent of government,
whose sole focus is the national interest, has to have the power to reverse
the economic thrusters, he says.

 

Politicians, focused on the short-term electoral cycle, cannot be counted on
to do this, he adds.

 

The debates over MMT look set to rage on as more prominent people come out
to back it.

 

Ms Ocasio-Cortez told Business Insider in January, MMT "absolutely" needs to
be "a larger part of our conversation".--BBC

 

 

 

Amazon’s fight with Trump is about much more than $10bn

When the Pentagon first tendered the so-called "Jedi" contract in March
2018, the stakes couldn't have been higher.

 

The Joint Enterprise Defense Infrastructure project would give the military
a cloud computing system that could handle 3.4m demanding users, many of
whose lives depended on it working correctly.

 

Rather than share the responsibility between several companies - as the
likes of Oracle and IBM had keenly hoped - the Department of Defense decided
that this was to be a "winner takes all" contract. One project, one
provider, $10bn.

 

Experts considered it an opportunity beautifully "gift wrapped" for Amazon.
Its Amazon Web Services - AWS - was already, by far, the biggest cloud
platform in the world, entrusted with sensitive data belonging to millions
of clients. Among them, the Central Intelligence Agency.

 

"We have no favourites," insisted Timothy Van Name, from the Defense Digital
Service, when hit with a barrage of criticism from the wider cloud industry.
A court challenge would come from Oracle - the database firm - slowing
progress, but the contract looked set to land in the lap of Jeff Bezos.

 

Except, it didn't. Against expectations, the Department of Defense awarded
the contract to Microsoft.

 

Now, Amazon is going head-to-head with the Trump Administration, arguing
that the President himself unfairly interfered with the selection process
out of spite for Jeff Bezos due to his ownership of the Washington Post.

 

Future dominance

So far in 2019, AWS has generated $25bn in sales, generating more income for
Amazon than it makes from retail in the whole of North America.

 

In that context, the Jedi contract - worth $10bn over 10 years - would be a
meaningful but not critical entry on its balance sheet.

 

But what has Amazon so incensed is what the Pentagon's decision might mean
for future, similar contracts. Much like the firm had hoped its involvement
with the CIA would give it a shoe-in for Jedi, it is thought that other US
departments, also in need of modernisation, will follow the Pentagon's lead.

 

Dan Ives, an analyst with Wedbush, said he believed Amazon's protest would
not result in the overturning of the Jedi decision. And, as a result,
Microsoft - which today controls 17% of the cloud market - would be poised
to capitalise.

 

"This is a game changer for Microsoft," Mr Ives said in a briefing note, "as
this will have a ripple effect for the company's cloud business for years to
come, and speaks to a new chapter of [Microsoft] winning in the cloud vs
Amazon".

 

With more than $1tn in cloud spending predicted in the upcoming decade, this
initial $10bn loss could ultimately prove incredibly costly. A "stinging
defeat", as Mr Ives put it.

 

Re-examined

Jeff Bezos's problems began to emerge in July, when President Trump told
reporters that he'd heard "people" were unhappy with the way the Pentagon
contract had been handled.

 

(Among those people were executives at Oracle, who had been aggressively
lobbying the president, arguing the decision to award Jedi to just one
company amounted to a "conspiracy" that would create a cloud monopoly,
leaving Oracle out in the cold.)

 

"I'm getting tremendous complaints about the contract with the Pentagon and
with Amazon; they're saying it wasn't competitively bid," the President
said.

 

"I will be asking them to take a look at it very closely to see what's going
on because I have had very few things where there's been such complaining."

 

On 1 August, it was announced the decision on Jedi had been put on hold. The
new Defense Secretary, Mark Esper, said he would re-examine the process, and
on 25 October, Jedi was awarded to Microsoft.

 

Amazon was furious. Last month the firm filed an appeal in federal court,
details of which were unsealed by a judge this week.

 

Amazon said the Pentagon's decision came not through a fair assessment of
capabilities, but was "the result of improper pressure from President Donald
J. Trump, who launched repeated public and behind-the-scenes attacks to
steer the Jedi Contract away from AWS to harm his perceived political enemy
- Jeffrey P. Bezos".

 

Trump's Ire

President Trump has made his dislike of Amazon repeatedly clear.

 

Before being elected, he told supporters on the campaign trail he would give
Amazon "problems", and described the firm as using "our postal system as
their delivery boy (causing tremendous loss to the US)".

 

A Vanity Fair report in April 2018 suggested Mr Trump was, now that he's in
the White House, prepared to use his power to thwart Amazon's advances. An
unnamed source "close" to the administration is quoted in the article as
saying: "Trump is like, how can I f*** with him?"

 

Mr Trump's dislike of Mr Bezos stems from the world's richest man - that's
Mr Bezos - having ownership of the Washington Post newspaper, a major thorn
in the side of the President. While that ownership was a personal investment
by Mr Bezos, rather than Amazon, Mr Trump sees no distinction, repeatedly
referring to the revived newspaper as the "Amazon Washington Post".

 

In tweets, Mr Trump called the Jedi contract a "Bezos bailout". His son,
Donald Trump Jr, also tweeted that Amazon was engaging in "shady and
potentially corrupt practices" that "may come back to bite them".

 

In its filing, Amazon said these interferences "destroyed" the ability for
the Pentagon to be impartial in its decision making.

 

"Each of these messages came while [the Department of Defense] was
evaluating the Jedi proposals and it would have been virtually impossible
for anyone involved in Jedi to ignore them."

 

According to AFP, the legal tussle will not slow progress on the project.

 

"We will deal with Amazon's legal actions. I can't comment on those right
now," said Under Secretary of Defense for Acquisition and Sustainment, Ellen
Lord, on Tuesday.

 

"But I will tell you we are moving right now forward with the JEDI
contract."--BBC

 

 

 

USMCA: Agreement reached on Nafta trade deal replacement

The US, Mexico and Canada have finalised a trade deal that will replace the
25-year-old North American Free Trade Agreement (Nafta).

 

Representatives from the three countries signed the pact in Mexico.

 

They met hours after Democrats in US Congress said they would support the
deal after the White House agreed to strengthen the labour and environmental
rules.

 

The three countries had concluded their talks more than a year ago.

 

But the deal needs approval by legislatures in the three countries before it
can move forward.

 

House Speaker Nancy Pelosi declared the revised pact "infinitely better"
than the deal the three countries announced last year.

 

US President Donald Trump, who had accused the Democrats of holding up the
deal, also declared victory.

 

The US-Mexico-Canada Agreement (USMCA) will be "the best and most important
trade deal ever made by the USA. Good for everybody - Farmers,
Manufacturers, Energy, Unions - tremendous support," he tweeted.

 

USMCA trade deal: Who gets what from 'new Nafta'?

During his 2016 presidential campaign, Mr Trump promised to replace Nafta,
which he and many Democrats blame for speeding the decline of US
manufacturing.

 

Talks started in 2017 and the three countries agreed to terms last year.
Among the most eye-catching changes were new rules that require a higher
share of North American-made parts for a vehicle to qualify for tariff-free
treatment.

 

Democrats, who control the House of Representatives, were also pushing for
changes to strengthen enforcement of labour and environmental rules, and
provide more flexibility governing drug pricing.

 

On Tuesday, Democrats said they had reached an agreement with the White
House on new provisions and were planning to support the deal in a vote.

 

"There is no question, of course, that this trade agreement is much better
than Nafta but... it is infinitely better than what was initially proposed
by the administration," Ms Pelosi said.

 

Democrats' decision to advance the deal, known as USMCA, gives Mr Trump a
victory on one of his signature issues, trade. But it also serves to
undercut criticism by Republicans that the Democrats are too focused on
impeachment to govern.

 

The US business community said news that the deal would move forward was a
relief and urged Congress to bring it to a vote quickly. Canada and Mexico
are two of the US's biggest trade partners.

 

"Farmers have been struggling in the face of bad weather and unpredictable
trade policy," said Angela Hofmann, co-executive director of the lobby
group, Farmers for Free Trade.

 

"Passing USMCA will guarantee that our farmers' closest and most important
markets, will remain free from tariffs and red tape."

 

It is all a far cry from 1st January 1994 when the North American Free Trade
Agreement - reached between the so-called "Three Amigos" of the US, Mexico
and Canada - came into force.

 

For President Trump, who called NAFTA "the worst trade deal in the history
of the country", the definitive end of that deal is very welcome.

 

For Mexican President Andres Manuel Lopez Obrador, the mood is primarily one
of relief. He confirmed the final sticking points, namely labour rights,
steel and aluminium, had been overcome and will no doubt be glad to be rid
of the negotiations that were threatening to drag on well into 2020.

 

But for millions of Mexican workers, the signing of the USMCA agreement will
have been by met with something of a shrug. The Mexican press has argued
that USMCA is essentially Nafta dressed up in different language and many
are either indifferent or unsure exactly what the new deal will mean for
them. They will have to see once it comes into force next year whether it
has any significant bearing on their jobs, either for better or worse.--BBC

 

 

 

Exxon wins New York climate change fight

Exxon Mobil has won a court battle in New York in which it was accused of
misleading investors about the costs of addressing climate change.

 

The state had argued that oil giant used two figures to calculate the risks
of climate change, misrepresenting the cost in public disclosures.

 

Exxon had denied wrongdoing. It said the two figures served different
purposes.

 

A New York judge said the evidence presented supported that claim.

 

"What the evidence at trial revealed is that Exxon Mobil executives and
employees were uniformly committed to rigorously discharging their duties in
the most comprehensive and meticulous manner possible," Judge Barry Ostrager
of Manhattan Supreme Court said.

 

Exxon, which had called the suit politically motivated, hailed the victory.

 

"Today's ruling affirms the position ExxonMobil has held throughout the New
York Attorney General's baseless investigation," it said. "We provided our
investors with accurate information on the risks of climate change."

 

"Lawsuits that waste millions of dollars of taxpayer money do nothing to
advance meaningful actions that reduce the risks of climate change," it
added.

 

New York's attorney general filed the lawsuit against Exxon in 2018, after
years of investigation. The trial started in October. It had been closely
watched as one of the most high-profile of a rising number of suits against
the company.

 

New York Attorney General Letitia James said despite her loss in court, the
case had forced Exxon to "answer publicly" about its decision-making related
to climate change.

 

"We will continue to fight to ensure companies are held responsible for
actions that undermine and jeopardize the financial health and safety of
Americans across our country, and we will continue to fight to end climate
change," she said in a statement.--BBC

 

 

 

 

McDonald’s latest fast food chain to join vegan craze

McDonald's is to join a growing list of fast food restaurants selling fully
vegan meals in the UK.

 

McDonald's said its Veggie Dippers meal - including vegan nuggets served
with chips and a soft drink - will launch in the UK on 2 January.

 

It follows the likes of KFC and Greggs in introducing vegan options.

 

Animal rights activists Peta said a vegan meal was "the very definition of a
happy meal".

 

However, it said it would continue to campaign for McDonald's to bring its
McVegan burger, which is available in Finland and Sweden, to the UK.

 

McDonald's new dippers are made of rice, red peppers, tomato pesto and split
peas, fried in breadcrumbs.

 

The product will be fried separately from products containing meat, a
spokesman said, and served with McDonald's UK chips, which are
vegan-friendly.

 

The move comes as restaurants are capitalising on increasing demand from UK
customers for vegetarian and vegan food options.

 

McDonald's said in the last 12 months it had seen an "80% uplift" in
customers ordering vegetarian options.

 

The firm is the latest fast food chain to offer vegan products. Famously,
Greggs launched a vegan sausage roll at the beginning of the year which it
credited with boosting sales.

 

Other chains with vegan options include Frankie & Benny's, Gourmet Burger
Kitchen, Nando's, Papa John's and Pizza Hut.

 

'Encouraging consumers'

The Humane Society, which campaigns for animal welfare, said McDonald's move
would help veganism go mainstream.

 

"When big global brands like McDonalds start serving up vegan food, it can
have a huge meat-reduction impact overall," director Claire Bass told the
BBC.

 

Peta director Elisa Allen said: "A vegan meal - one that doesn't require
killing - is the very definition of a happy meal.

 

"We'll continue to encourage consumers to vote with their wallets and choose
vegan to help spare pigs, cows, and chickens a short, miserable life and a
violent death."

 

A survey by Mintel in 2018 found people giving a variety of reasons for
eating less meat, including for its perceived health benefits, to try to
lose weight, and because of animal welfare and environmental concerns.--BBC

 

 

 

Maurice Saatchi quits advertising firm he co-founded

Maurice Saatchi has quit the advertising agency he co-founded in 1995 along
with three other directors in the wake of an accounting scandal.

 

M&C Saatchi shares have collapsed this year from a high of about £4 each to
103 pence after profit warnings.

 

The company also revealed a £11.6m hole in its earnings last week.

 

Lord Saatchi founded the firm with his brother Charles after being forced
out of Saatchi & Saatchi after a shareholder revolt.

 

As well as Lord Saatchi, Lord Dobbs, Sir Michael Peat and Lorna Tilbian all
quit the board of the firm.

 

Lord Dobbs, a Conservative politician, is best known for creating the House
of Cards novels, which were turned into TV series in the UK and the US.

 

'Determined'

Sir Michael is a former accountant and courtier, and Ms Tilbian is a media
analyst and stock broking executive.

 

M&C Saatchi is famous for the controversial New Labour, New Danger campaign
for the Conservatives in 1997. Labour won with a majority of 179.

 

Much more successful was the brothers' 1979 Conservative campaign, Labour
Isn't Working.

 

Jeremy Sinclair, the company's chairman, said: "We have accepted the
decision of these directors to resign. We are determined to restore the
operational performance and profitability of the business."

 

Last week the company warned 2019 profit would be "significantly below the
levels expected".

 

In September it revealed a slide in sales and profit for the first half of
the year. Profit fell 67% to £2.5m.--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> 

 


 

 


DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of
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been compiled from sources believed to be reliable, but no representation or
warranty is made or guarantee given as to its accuracy or completeness. All
opinions expressed and recommendations made are subject to change without
notice. Securities or financial instruments mentioned herein may not be
suitable for all investors. Securities of emerging and mid-size growth
companies typically involve a higher degree of risk and more volatility than
the securities of more established companies. Neither Faith Capital nor any
other member of Bulls ‘n Bears nor any other person, accepts any liability
whatsoever for any loss howsoever arising from any use of this report or its
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investigation into the business, financial condition and future prospects of
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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