Major International Business Headlines Brief::: 12 December 2019

Thu Dec 12 09:48:00 CAT 2019

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Major International Business Headlines Brief::: 12 December 2019

 <http://www.nedbank.co.zw/> 

*  Eskom works to restore power after S.Africa floods, mines reopen

*  Goldman Sachs names new head of Johannesburg office

*  S.Africa's Absa appoints new international head

*  Angola opens case against ex-minister over Namibia fishing bribe scandal

*  Ghana company says it discovers 1.5 bln barrels of offshore oil

*  South Africa's retail sales up 0.3% year/year in October

*  Trump tariff deadline looms: 'It's very scary'

*  Boeing: US regulator admits 'mistake' over aircraft crashes

*  The general election and the volatile pound

*  Aramco shares jump in world's biggest ever market debut

*  Brexit: Free trade deals 'won't offset leaving EU'

 <mailto:info at bulls.co.zw> 

Eskom works to restore power after S.Africa floods, mines reopen

JOHANNESBURG (Reuters) - South African state power utility Eskom scaled back
power cuts on Wednesday, providing relief to mining companies that were able
to restart operations hit earlier this week by the worst blackouts in a
decade.

A week of heavy rains across parts of South Africa has caused flooding,
leading to evacuations and aggravating problems at the cash-strapped and
indebted power company, which has been struggling to keep the lights on
since 2008. [nL8N2873AC]

Eskom said it planned to reduce national grid supplies by 2,000 megawatts
(MW) on Wednesday, down from a 6,000 MW reduction on Monday. But the company
added that the probability for continued loadshedding, or planned rolling
blackouts, “remained high for the rest of the week”. [nL8N28J0NJ]

Chief Operations Officer Jan Oberholzer told Reuters the power cuts earlier
in the week were caused by a “perfect storm” of extreme rainfall and
breakdowns at coal-fired power plants. One coal mine and three power
stations had flooded, he said.

Unplanned breakdowns were occurring across Eskom’s coal-fired plants because
previous managers had not done critical mid-life maintenance, he added.

The breakdowns were likely to persist as Eskom has neither the spare
generating capacity nor the money to take all of the faulty coal units
off-line and overhaul them, Oberholzer said.

The power cuts, which have disrupted the supply of electricity to businesses
and households across South Africa, dealt a further blow to an economy
already teetering on the brink of recession.

President Cyril Ramaphosa, who cut short a state visit to Egypt as the power
crisis deepened, met with Eskom’s management and board on Wednesday.

“The president has put it on record that the issue of loadshedding ... is a
national crisis,” Ramaphosa’s spokeswoman Khusela Diko told news channel
eNCA. “He wants to understand how we got here.”

In the short run, a combination of drier weather and work places shutting
down for Christmas will cool demand for power, relieving pressure on the
grid, said Azar Jammine, director of South Africa-based consultancy
Econometrix.

But he added: “it has created a lot of uncertainty over whether we can rely
on energy security in South Africa, and that in itself is going to damage
economic growth.”

BACK IN BUSINESS

Mining firms including Harmony Gold and Sibanye-Stillwater were forced to
cut production on Monday because of power shortages. [nL8N28K1Q4]

Sibanye-Stillwater said its underground operations had resumed on Tuesday
afternoon but would still operate with 10% less power than normal.

“We lost a day’s shifts. It will have an impact on quarterly results. It
will be noticeable,” said James Wellsted, spokesman for Sibanye-Stillwater.
“It’s a cumulative impact of all the different stages of load curtailment.”

Harmony said on Wednesday it had also resumed shifts at its underground
mines on Tuesday afternoon.

Impala Platinum, which had said its losses due to the power cuts had
amounted to 120 million rand ($8.16 million), resumed operations at its
mines from 1600 GMT on Tuesday.

Its deep-level Rustenburg and Marula mines, which halted production for a
day, were still operating with 15% less power than normal on Wednesday, a
spokesman said.

Petra Diamonds restarted operations at its Cullinan, Finsch and
Koffiefontein mines on Tuesday evening after halting them on Monday when
asked by Eskom to reduce its electricity load.

AngloGold Ashanti shut down all its mines on Monday night and reopened them
around 0600 GMT on Tuesday, a spokeswoman said.

“This obviously is a disruption to production,” she said, declining to
quantify the impact.

South Africa’s cash-strapped state-owned companies have been a major
headache for Ramaphosa who came to power nearly two years ago vowing to
reverse years of mismanagement and economic stagnation.

On Monday, he vowed to take “drastic” steps if necessary to ensure their
survival. [nL8N28J0NJ]

South African Airways was placed in bankruptcy protection last week and an
independent administrator was appointed to run the state’s passenger rail
company on Monday.

But loss-making Eskom, which generates more than 90% of the country’s power,
is the “most serious risk” to the economy, the Treasury says. This is
largely because of its 500 billion rand of debt, mostly government-backed.

Credit rating agency Moody’s has said Eskom’s troubles endanger South
Africa’s only surviving investment-grade rating.

($1 = 14.7075 rand)

 <mailto:info at bulls.co.zw> 

Goldman Sachs names new head of Johannesburg office

JOHANNESBURG (Reuters) - U.S. investment bank Goldman Sachs has appointed
Jonathan Penkin as head of its Johannesburg office, the bank’s base for
sub-Saharan Africa where the current chief executive is retiring at the end
of the year.

Penkin, who will relocate to Johannesburg, will be named CEO of Goldman
Sachs International Bank, Johannesburg branch, pending regulatory approval,
and Goldman Sachs International branch manager, the bank said in an internal
memo sent on Tuesday.

That will see him lead the Wall Street bank’s effort to beef up its African
operations. Goldman said in November that Collin Coleman, current CEO for
sub-Saharan banker, would retire after almost two decades heading the
Johannesburg office.

Penkin joined Goldman as a managing director in 2006 and was named partner
in 2010. He has been head of growth markets equity capital markets and
chairman of equity capital markets for Asia ex-Japan since 2016.

The memo named Willem Baars and Olivier Frendo as co-heads of Goldman’s
investment banking division for sub-Saharan Africa. Alongside Penkin, they
would oversee strategic initiatives in the region.

Baars joined the bank in 2000 as an analyst and was named managing director
in 2012.

Frendo rejoined Goldman in 2018 after leaving a year earlier to co-found an
initiative seeking to fund disruptive businesses in Africa. He had
previously served as a managing director.

S.Africa's Absa appoints new international head

JOHANNESBURG (Reuters) - South African lender Absa said on Wednesday it had
appointed Cheryl Buss as chief executive of its international division, to
lead its expansion outside of its home market.

Buss, who joined Absa in 2008 from Standard Chartered, will be based in
London and report to Charles Russon, head of the lender’s corporate and
investment bank.

Russon said Buss was the “perfect choice” to oversee Absa’s international
ambitions. The bank is on a drive to beef up its investment banking
operations across Africa and cater to global clients looking to do business
on the continent.

“The expansion of the position she is taking up will give the unit a
singular focus and lead, and underlines how serious Absa is about this side
of the business,” he said.

Buss’ responsibilities will include managing Absa Securities United Kingdom,
and the bank is also opening a representative office in New York which will
fall under her remit.

The bank has also appointed, but has not yet named, a new CEO following the
departure of long-time leader Maria Ramos in February. It is expected to
name the person in early 2020.

Angola opens case against ex-minister over Namibia fishing bribe scandal

JOHANNESBURG (Reuters) - Angolan authorities have opened a criminal case
against a former fishing minister for alleged involvement in a bribery
scandal with Iceland’s biggest fishing company that has seen six arrests in
neighbouring Namibia, state media reported on Wednesday.

Two former Namibian ministers and four others implicated in Namibia’s
largest corruption scandal are awaiting trial. They are accused of
conspiring with Iceland’s biggest fishing company Samherji to receive
payments worth millions of dollars in exchange for fishing quotas.

The scheme, which was exposed by Wikileaks, began in 2014 and included
relatives of the ministers and officials from Angola, according to documents
it posted online. It used a bilateral deal between the two neighbouring
nations in southwest Africa to enable Samherji to get quotas of tens of
thousands of tonnes a year of horse mackerel, according to the documents.

State-owned Jornal de Angola said authorities had frozen the assets of
ex-minister of fisheries Victoria de Barros Neto and opened a case against
her, her husband and four children.

“If there are signs of criminal acts, in due course we will provide
information about the judicial process,” state deputy prosecutor Alvaro da
Silva Joao was quoted as saying.

Former justice minister Sakeus Shanghala and fisheries minister Bernardt
Esau, along with two former employees of South Africa’s Investec, are among
those awaiting trial in Namibia.

Norwegian police are meanwhile investigating DNB (DNB.OL), the country’s
largest bank, after it too was named.

Samherji has denied wrongdoing, as have Esau and Shanghala. DNB said it was
cooperating with the investigation.

Investec said last month that two former employees on trial had not used
their Investec positions to facilitate the alleged scheme in any way.

Ghana company says it discovers 1.5 bln barrels of offshore oil

DAKAR (Reuters) - Ghana’s Springfield E&P said on Wednesday that it had
discovered 1.5 billion barrels of oil and 0.7 trillion cubic feet of gas off
the West African country’s Atlantic coast.

The discovery is a significant one in a country that currently produces
about 200,000 barrels of oil per day (bpd), about half of it from British
company Tullow’s Jubilee field.

Springfield, a wholly-owned Ghanaian company, said in a statement that the
undiscovered potential of the block was estimated at over 3 billions barrels
of oil and gas.

“This is great news for Springfield, Ghana and Africa,” said chief executive
Kevin Okyere. “We are excited about the discovery as it ties into our vision
of becoming a leading African upstream player with a global focus.”

Ghana’s government has been frustrated by the slow pace of offshore
development and is working on revising its licensing laws in an effort to
spur production.

Its deputy minister for petroleum said last month that Ghana had expected 14
wells to be drilled and $890 million invested between 2013 and 2016, but not
a single well was drilled and companies spent just $95 million.

South Africa's retail sales up 0.3% year/year in October

JOHANNESBURG (Reuters) - South African retail sales rose 0.3% year-on-year
in October following a revised 0.4% increase in September, Statistics South
Africa said on Wednesday.

On a month-on-month basis, sales were down 0.2% and rose 0.6% in the three
months to the end of October compared with the same period last year, the
statistics body said.

Trump tariff deadline looms: 'It's very scary'

Competition from China in the early 2000s nearly killed SG Companies, a
family-owned footwear business that was founded almost 125 years ago. Now
Donald Trump's trade war could finish it off.

The 15 December deadline when the US is due to impose another round of
tariffs is just days away. For the New Jersey company, it will mean a new
15% tax on the shoes it designs, makes in China, and sells to retailers like
Walmart.

Chief executive Matt Feiner is still hoping for a last-minute reprieve.
Without one, he said, the company, which employs about 100 people in the US,
may not survive.

"There's really no way that we could digest all of those costs," he said.
"It is very scary."

'Chilling effect'

Since the trade war started, the US and China have imposed tariffs on more
than $450bn worth of each other's exports. But previous US actions have hit
mostly business products.

This round - on an estimated $156bn worth in annual Chinese imports - will
fall on a wide range of consumer goods, heightening the stakes. The list of
affected products includes smart phones, make-up brushes, children's books,
and clothing.

A quick guide to the US-China trade war

Potential US-China trade deal could remove tariffs

With more than 70% of shoes sold in the US made in China, footwear is among
the industries most exposed to the measure.

American buyers could pay as much as $4bn more for their shoes each year if
the tariffs move forward, according to the Footwear Distributors and
Retailers of America, an industry association.

Nike, Clark's and Steve Madden are among more than 200 footwear firms that
have spoken out against the plans.

"Tariffs are taxes," association president Matt Priest has warned. "This
move will noticeably raise the cost of shoes at retail and will have a
chilling effect on hiring in the footwear industry,"

The White House has said its tariffs - initially announced at 10% but later
raised to 15% - are aimed at forcing China to change "unfair" trade
practices, including subsidies and alleged theft of tech secrets. Officials
say any impact on the US will be minimal.

However, Mr Trump has postponed the tariffs once already, amid concerns the
tariffs might hurt consumer spending - the main driver of the US economy -
during the Christmas season.

In recent days, administration officials have suggested that a similar delay
could happen, assuming the two sides make sufficient progress toward a deal.

In the meantime, economists say the uncertainty has hurt business investment
and confidence.

"I wish I could tell you I was spending more time creating break-through
product ideas... and figuring out the way to bring them to life," Mr Feiner
said. "Unfortunately, we... have been spending much more of our time working
through this issue."

SG Companies was founded in 1896 as a slipper manufacturer. For decades, it
resisted the closures affecting footwear manufacturers - despite tariffs
enacted in the 1930s to protect domestic production.

Finally, in 2002, SG shut its own Hackensack factory, laying off more than
500 workers.

The company reinvented itself as an import and licensing business, and now
sells about 20 million pairs of flip flops, sandals and other products each
year.

But the tariffs threaten to raise import costs by more than the firm's
typical profit, said Mr Feiner, who declined to share more specific figures.

For now, the firm's business partners - both retailers and contract
manufacturers in China - have agreed to share the burden of the tariffs. But
Mr Feiner expects that flexibility to end after the spring shipments.

He said he has looked at shifting its production to Vietnam or Cambodia, but
the costs didn't make sense for the lower-priced shoes that are his
company's specialty.

And with everyone in the industry considering similar moves, there simply
isn't the capacity outside of China to handle it, he added.

"These tariffs really threaten the viability of the company on a go-forward
basis," he said. "For a company like ours, it feels like a very precarious
place to be in."--BBC

Boeing: US regulator admits 'mistake' over aircraft crashes

US aviation regulators allowed Boeing's 737 Max aircraft to continue flying
despite knowing there was a risk of further crashes.

Analysis after the first crash last year predicted there could be up to 15
disasters over the lifetime of the aircraft without design changes.

Despite this, the Federal Aviation Administration did not ground the Max
until a second crash five months later.

FAA chief Steve Dickson, who started in August, said this was a mistake.

The FAA risk assessment was revealed during a US congressional hearing on
Wednesday. Lawmakers are investigating Boeing following fatal 737 Max
crashes in Indonesia in October 2018, and Ethiopia in March. The disasters
killed 346 people in total.

Air safety officials investigating the crashes have identified an automated
control system in the 737 Max 8, known as MCAS, as a factor in both
accidents.

Boeing has said the system, which relied on a single sensor, received
erroneous data, which led it to override pilot commands and push the
aircraft downwards.

What went wrong in Boeing's cockpit?

The FAA's investigation of the October Indonesia crash called for Boeing to
redesign its system, warning of a risk of more than a dozen crashes over the
45-year lifetime of the roughly 4,800 737 Max planes in service.

Regulators also issued an alert to airlines, but the agency did not ground
the aircraft until after the 10 March Ethiopia crash, several days after
action by other countries.

"Was a mistake made?" asked Democrat congressman Henry Johnson.

"Obviously the result was not satisfactory," said Mr Dickson. In response to
later questions, he admitted the agency had made a mistake at some point in
the process.

'Grave concerns'

Boeing is revising the MCAS software, but lawmakers say their investigation
has shown that the aircraft manufacturer was aware of flaws in the system.

Boeing staff have also raised concerns that the company was prioritising
speed over safety at the factory that produced Max 737s, contributing to the
crashes.

Ed Pierson, a former senior manager at the factory, told Congress he
repeatedly warned Boeing's leadership of the safety risks caused by what he
described as a "factory in chaos", but it had little effect.

He also said that, after the crashes, US government regulators have shown
little interest in his concerns.

"I remain gravely concerned that... that the flying public will remain at
risk unless this unstable production environment is rigorously investigated
and closely monitored by regulators on an ongoing basis," he said in
prepared testimony.

Mr Dickson said the FAA is probing production issues. He also said he is
considering further actions against Boeing.

In a statement, Boeing said Mr Pierson's own account showed the company took
his concerns seriously.

"Company executives and senior leaders on the 737 program were made aware of
Mr Pierson's concerns, discussed them in detail, and took appropriate steps
to assess them," it said.--BBC

The general election and the volatile pound

Election night could be a long one for financial market traders.

The most sensitive market to political events is almost always the value of
the pound. And, given the political stakes could scarcely be higher, it
could be very volatile as exit polls and results begin to come in.

Markets care A LOT about the outcome of the election, but why should we even
discuss them - and what do we even mean when we say "markets"?

Markets is shorthand for the collective confidence that investors
(individuals, pension funds, hedge funds) have in the financial prospects of
a company, a country, a commodity, a currency, etc.

When it comes to politics, markets react to the effect they think political
events will have on the economic prospects of the UK.

But markets are not always right.

Markets - and most economists - think Brexit is overall a bad thing for the
UK economy because it makes doing business with our largest and closest
trading partner, the EU, more difficult and more expensive. The harder the
Brexit, the worse for the economy and the currency.

Markets also think Labour proposals - to nationalise industries, force big
firms to hand over a tenth of the company to workers and government, plus a
plan to borrow hundreds of billions of pounds - is bad for business
confidence, the economy and the pound.

Also, markets don't like surprises.

Markets do matter because a fall in the pound tends to push up the cost of
living, while falls in company share prices affect the value of pensions.

With these rough principles in mind, let's take a look at the potential
market reaction to the most probable outcomes.

A Conservative majority: The pound goes up, but by how much and for how long
depends on size of majority.

This is the outcome the markets are currently predicting. The value of the
pound has risen significantly since the summer, rising from $1.19 to over
$1.32 as the majority of polls have pointed to a Tory majority and a
functioning government. That lead in the polls has also reduced the chance
of an outright labour victory, a result markets dislike more than Brexit.

However, even if markets get the Tory majority they expect, it doesn't mean
that markets will be calm. A great deal depends on the size of that
majority.

A very small majority, some argue, would give hard line Brexiters more
influence over negotiations with the EU and prevent the PM from extending
the transition period, thereby increasing the likelihood of leaving the EU
without a deal in December 2020 - an outcome that investors consider bad for
the UK economy and consequently the value of the pound.

Others argue that the Tory party is a lot more stable than it was. Rebel MPs
have been crushed and all have signed up to Johnson's deal in blood as the
price of standing in the election. Whatever you think, it seems
uncontroversial to say that the bigger the majority, the more short-term
certainty for the direction of travel.

Based on soundings from foreign exchange traders a solid majority (say
25-plus) see pound rise a bit ($1.33). A big win could see it rise a bit
more ($1.35-$1.40) while a slim majority or falling short altogether would
potentially see a sharp fall in the pound back towards $1.20-$1.25.

A Labour-led coalition: Short term fall for pound but supported by potential
path to reversing Brexit.

The process of assembling a coalition, choosing a leader, the possibility of
a second referendum - with a potentially different result - would create
uncertainty in the short term and stall business investment further. The
pound would probably fall in value in the short term. However, markets have
consistently delivered the message: the closer the UK is to the EU, the
better for the economy - and therefore the pound might find some support
after an initial dip.

A Labour Party in coalition with other parties would probably have to ditch
some of the more radical proposals (mass nationalisations, etc) that the
markets don't like. No radical overhaul of capitalism and a potential route
to a softer or non-existent Brexit would probably create a bit of a short
term shock, but it wouldn't lead to a bloodbath.

However, some say the price of the SNP joining a Labour-led coalition would
be a promise for a second Scottish referendum. A possible fracture in the UK
could add another whole level of uncertainty and political angst, which
would offset any hopes for a softer Brexit.

An outright labour majority: The most radical overhaul of the way business
and the economy is run in decades. Pound falls very sharply.

This would come as a big surprise to markets - and they hate those. It's not
just the element of surprise - markets fear Labour's plans to nationalise
large swathes of the economy and change the ownership of companies, etc,
would spook investors.

Traders expect that would lead to a sharp fall in the pound and the price of
shares in the companies they want to nationalise, which would hit savers and
workers' pensions.

In summary, markets know they are not oracles but they don't react well to
being wrong and can act with a violent jerk of the knee when that happens.
The markets right now are balanced between fears and desires.

A desire for the certainty of a functioning government, while fearing both a
hard Brexit on one side and a makeover of capitalism on the other.--BBC

Aramco shares jump in world's biggest ever market debut

Saudi Aramco's stock rose sharply as the world's biggest share listing got
underway in Riyadh, rising 10% above the initial public offering price.

Last week the oil giant, which produces more than a tenth of global crude
supply, raised $25.6bn (£19.5bn).

Saudi Arabia's royal family is privatising assets as part of a plan to move
the kingdom away from its reliance on oil.

The money raised from the sales will be used for non-energy investments.

Today's 10% rise, Riyadh's Tadawul stock exchange's daily limit, gives
Aramco a market valuation of around $1.88tn.

That easily makes it the world's most valuable listed company but still less
than the $2tn targeted by Crown Prince Mohammed bin Salman.

However it is still the biggest share sale to date, surpassing that of
China's Alibaba, which raised $25bn in 2014 in New York.

Rocky road to market

It came after a testing journey for Aramco's public offering.

Saudi Arabia had to rely on domestic and regional investors to sell the 1.5%
stake after lukewarm interest from abroad.

It initially sought to raise $100bn on two exchanges - with listings on the
Saudi Stock Exchange, or Tadawul and an overseas market.

The plan was scaled back after foreign investors raised concerns about
climate change, political risk, and a lack of corporate transparency.

International institutions were also unconvinced by the firm's valuation,
prompting Aramco to pull marketing events in New York and London.

Instead, it focused its efforts on Saudi Arabian investors and wealthy Gulf
Arab allies. Saudi banks also offered citizens cheap credit to buy the
shares following a nationwide advertising campaign.

The share sale is at the heart of plans to modernise the Saudi economy and
wean it off its dependence on oil.

The kingdom urgently needs tens of billions of dollars to fund megaprojects
and develop new industries.

Analysis: Sameer Hashmi, BBC Middle East Business Correspondent

It was widely expected that Saudi Aramco shares would get off to a
blistering start - thanks to the strong backing of local affluent investors
and Saudi institutions - who were asked to buy shares at the start of
trading.

Friendly gulf neighbours like the United Arab Emirates and Kuwait have also
helped bolster the share sale by pumping in billions of dollars. The
Kingdom's energy minister is confident that the company's valuation would
breach the $2 trillion mark in the coming days. Analysts expect the share
price to remain firm in the near future but also say that the real test
would be to sustain the momentum in the long run.

The IPO is at the heart of Saudi Arabia's ambitious plans to diversify its
economy away from oil. The Kingdom's crown prince - Muhammed bin Salman
(MbS), who is spearheading the economic strategy - wants to use the IPO
proceeds to part-fund some key initiatives announced under a programme
called 'Vision 2030' that aims to modernise Saudi Arabia's economy by
investing in new industries and multi-billion dollar projects.--BBC

Brexit: Free trade deals 'won't offset leaving EU'

Post-Brexit trade deals will not make up for the economic damage inflicted
on the UK from leaving the EU, analysis for BBC Newsnight has suggested.

Independent trade experts from the UK Trade Policy Observatory (UKTPO)
looked at the likely impact of US, Australian and New Zealand free trade
deals.

They found that even combined, new tariff-cutting agreements were likely to
boost the UK economy by just 0.4%.

A simple free trade deal would also depress the economy UKTPO said.

The body said that moving from full EU membership to a simple deal with our
closest trading partner - the objective enshrined in Boris Johnson's
Withdrawal Agreement - would depress the size of the economy by at least
1.8%.

A Conservative spokesperson said: "The prime minister's fantastic deal makes
clear that we will have a future relationship based on free trade and
friendly cooperation. By striking trade deals around the world we will
create exciting new opportunities for British businesses."

The Conservative manifesto claims free trade is the "best way" to increase
exports, cut prices and increase investment.

The upshot from this analysis is that there is no realistic prospect of new
trade deals with other countries, even the "ambitious" deals touted by
ministers, offsetting the economic hit from Brexit itself.

Moving to an EU free trade deal and striking new free trade agreements with
the US, Australia and New Zealand has an estimated negative impact on the UK
economy of 1.4% in the UKTPO results - equivalent to £28bn, or £1,000 per
household.

The results from the UKTPO, which is based at the University of Sussex, show
that moving to a free trade deal with the EU is beneficial overall for the
UK agriculture and food processing sector, due to reduced competition from
Continental farmers.

But that benefit is wiped out if US, Australian and New Zealand trade deals
slash import tariffs and quotas, resulting in a surge of agricultural
imports.

Mr Johnson, in a Commons statement presenting his Brexit Withdrawal
Agreement deal on 19 October, stated: "For the first time in almost five
decades the UK will be able to strike free trade deals with our friends
across the world to benefit the whole country - including Northern Ireland."

But Newsnight understands that internal UK government impact assessments
show that, in fact, only the South East will benefit from US, Australian and
New Zealand trade deals, and that the rest of the country will see negative
consequences

Northern Ireland is, sources say, particularly badly affected due to its
agriculture industry being severely hit.

The UKTPO used what is known as a partial equilibrium trade model to look at
the likely impact on 148 individual UK industrial sectors of slashing tariff
and non-tariff barriers.

Prof Michael Gasiorek led the modelling project for UKTPO. He was
unsurprised by the results.

"It's arithmetic," he said. "Tariffs on many goods are already quite low or
zero so there are no great gains from lowering them.

"Also relative to how much we trade with the EU, we do much less with the
US, Australia and New Zealand, so the overall impact on output is not
massive.

"It certainly doesn't offset the negative impact of leaving the EU. Further,
agreeing on the removal of regulatory barriers will be difficult - as the EU
had found in its negotiations with the US."

The UKTPO results are in line with the findings of a Treasury modelling
exercise in 2018, which estimated the benefit of any new trade deals would
only be between 0.1 and 0.2% of GDP - a benefit dwarfed by the negative
impact of leaving the EU's single market and customs union.

Newsnight understands the Department for International Trade has now
completed fresh impact assessments of US, Australian and New Zealand trade
deals, which show results similar to the UKTPO findings, but that these are
not due to be published until after Brexit and ahead of the publication of
mandates for trade negotiators.--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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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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344 1674

Invest Wisely!

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