Major International Business Headlines Brief::: 31 December 2019

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Major International Business Headlines Brief::: 31 December 2019

 


 

 


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*  Uganda plans to borrow nearly $2 bln to fund 2020/21 budget

*  Rio Tinto to restart South African unit in 2020 after security scare

*  South Africa's rand strengthens, easing Sino-U.S. tensions aid emerging
currencies

*  Sudan passes 2020 budget with anticipated deficit of $1.62 billion

*  Kenyan shilling weakens, pressured by end-month dollar demand

*  Ghana wants to join new West African currency but ditch euro peg

*  Egypt competition watchdog approves Uber acquisition of Careem with
conditions

*  Sudan to postpone lifting of fuel subsidies - minister

*  Libya's NOC may evacuate Zawiya refinery due to fighting nearby

*  Nissan's ex-head Carlos Ghosn in surprise Lebanon arrival

*  Tesla delivers its first 'Made in China' cars

*  Germanwings strike forces 180 flight cancellations

*  Bank of England chief Mark Carney issues climate change warning

*  'We can give a lot of the power back to the fans'

 

 


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Uganda plans to borrow nearly $2 bln to fund 2020/21 budget

KAMPALA (Reuters) - Uganda said it plans to borrow 6.9 trillion shillings
($1.89 billion) from external lenders in the 2020/2021 (July-June) fiscal
year to partly finance its budget, which could come under pressure as
veteran leader Yoweri Museveni seeks re-election.

 

A finance ministry budget paper seen by Reuters on Monday showed the funds
will be in “form of concessional and non-concessional” credit.

 

The paper did not indicate how much was borrowed in the previous financial
year. It also did not indicate from whom the money would be borrowed, but in
recent years China has become one of Uganda’s top external lenders.

 

Museveni, in power since 1986, is widely expected to seek re-election early
in 2021. He is expected to face a formidable challenge from pop
star-turned-lawmaker Bobi Wine, whose real name is Robert Kyagulanyi.

 

 

Public spending typically surges in election periods in Uganda, which has
some times triggered pressure on consumer prices and the local currency.

 

The paper said economic growth in 2020/2021 would be 6.2%, driven by higher
productivity in manufacturing and agriculture and “public and private sector
investment as well as regional and domestic trade.”

 

Uganda’s mounting public debt has been fuelling concern. The International
Monetary Fund has urged authorities to rein in borrowing.

 

Some opposition critics have also accused government of front-loading debt
before an expected windfall from oil sales. Uganda hopes to commence crude
oil production in 2022.

 

 

This month, the government said it was planning to borrow 600 million euros
($661 million) from international banks to plug a hole in its 2019/2020
budget after domestic revenue collections fell short by 9%.

 

The shortfall was caused by delays in implementing some planned
tax-generating measures, according to the finance ministry.

 

($1 = 3,657.0000 Ugandan shillings)

 

 

 

 

 

 


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Rio Tinto to restart South African unit in 2020 after security scare

(Reuters) - Global miner Rio Tinto said on Monday full operations at its
South African unit Richard Bay Minerals (RBM) will resume in early January
after cutting back because of security concerns for its workers.

 

Rio said regular production by RBM, which produces ilmenite ore for titanium
from mineral sand deposits, will be reached in early 2020, and that it was
contacting customers who were earlier told about disruptions to their
supply.

 

“A phased restart is now in progress across the operation,” Rio Tinto said
in a statement.

 

There have been a number of violent incidents at mines across South Africa,
including robberies, that have raised questions about the lack of security
and the threats they pose to the industry.

 

Earlier in December, the Anglo-Australian miner said one of its unit’s
employees was shot and that there was escalating violence against them,
causing a curtailment in operations.

 

“I would like to thank the Government of South Africa and the Premier of
KwaZulu-Natal for their support and assistance in getting us to a position
where we can restart operations at RBM,” Bold Baatar, Rio’s chief executive
of Energy and Minerals said in a statement.

 

 

The decision in early December also included a pause in the construction of
the $463 million Zulti South project which will extend Richards Bay Minerals
mine life and maintain current capacity.

 

Rio says it will review Zulti South after operations at RBM normalise.

 

 

South Africa's rand strengthens, easing Sino-U.S. tensions aid emerging
currencies

JOHANNESBURG (Reuters) - South Africa’s rand touched a five-month high early
on Monday, as demand for emerging market currencies was aided by easing
trade tensions between China and the United States and investors looking for
high yields.

 

By 0620 GMT, the rand was 0.32% firmer at 13.9950 per dollar, compared with
Friday’s close of 14.0400 in New York. The currency was at its strongest
level since July 31, 2019.

 

China’s commerce ministry said on Sunday it has “proactively dealt with”
trade frictions with the United States this year and that it is in close
touch with the U.S. on signing the trade deal.

 

The rand has gained about 5% since mid-December, despite a raft of data
releases showing a weak economy and nationwide blackouts by state power firm
Eskom, with investors willing to overlook the negatives and pocket the high
yield.

 

 

The rally has seen the unit hurdle key technical resistance points, first at
14.40 and then 14.20, spurring demand to the 14.00 psychological level that
could trigger even more gains as investors look to close position and
lock-in gains.

 

Bonds were flat, with the yield on the benchmark 2026 government issue up
0.5 basis points to 8.17%.

 

 

 

Sudan passes 2020 budget with anticipated deficit of $1.62 billion

CAIRO (Reuters) - Sudan has passed its 2020 budget that includes an overall
deficit of about 73 billion Sudanese pounds ($1.62 billion), Finance
Minister Ibrahim Elbadawi said on Sunday.

 

The country’s ruling sovereign council and Cabinet agreed the budget - the
country’s first since the toppling of longtime ruler Omar al-Bashir, whose
final years in power were marked by deep economic woes.

 

The budget has expected revenues of 568.3 billion Sudanese pounds ($12.63
billion) and also includes increased spending for healthcare and education.

 

“This is a budget of peace, it bodes for peace,” Elbadawi said.

 

Sudan’s current government has made peacemaking with rebels fighting
Khartoum one of its main priorities as it is a key condition for the
country’s removal from the U.S. list of sponsors of terrorism.

 

That designation has left Sudan unable to tap the International Monetary
Fund and World Bank for support.

 

Sudan’s economy was hit hard when the south of the country seceded in 2011,
costing it three-quarters of its oil output, a crucial source of foreign
currency.

 

Inflation soared in recent years, driven by rising food and beverage prices
and compounded by a black market for U.S. dollars.

 

Shortages of bread and fuel, both subsidized by the government, coupled with
hefty price rises sparked protests that ultimately led to Bashir’s ouster in
April.

 

The transitional government also studied a proposal to lift subsidies in
2020, but Information Minister Faisal Saleh said it ultimately decided to
postpone the proposal until at least March when the country plans to hold an
economic forum.

 

($1 = 45.0002 Sudanese pounds)

 

 

 

Kenyan shilling weakens, pressured by end-month dollar demand

NAIROBI (Reuters) - The Kenyan shilling was under pressure on Monday due to
oil and merchandise impoFrters buying dollars to meet end-month obligations,
traders said.

 

At 1001 GMT, commercial banks quoted the shilling at 101.25/45 per dollar,
compared with 101.00/25 at Friday’s close.

 

 

 

Ghana wants to join new West African currency but ditch euro peg

ABIDJAN (Reuters) - Ghana’s government said it is determined to join a West
African currency that will replace the France-backed CFA franc as soon as
next year in eight regional countries, but it urged members of the currency
union to ditch a planned peg to the euro.

 

Ghana’s adoption of the new currency, which is called the eco, would make it
the bloc’s largest economy, ahead of neighbour Ivory Coast.

 

Ghana is not part of the West African Economic and Monetary Union (UEMOA) of
mostly former French colonies that uses the CFA franc and has its own
currency, the cedi.

 

Ivory Coast President Alassane Ouattara and French President Emmanuel Macron
announced this month that West Africa’s monetary union had agreed to cut
some financial links with Paris that have underpinned the region’s common
currency since its creation soon after World War Two.

 

Under the deal, African countries in the bloc will not have to keep half of
their reserves in the French Treasury and a French representative will no
longer sit on the currency union’s board.

 

“We, in Ghana, are determined to do whatever we can to enable us (to) join
the Member States of UEMOA, soon, in the use of the eco, as, we believe, it
will help remove trade and monetary barriers,” President Nana Akufo-Addo’s
office said in a statement.

 

 

However, the statement indicated that Ghana opposed plans to keep the eco
pegged to the euro, urging regional authorities to work quickly toward
“adopting a flexible exchange rate regime”.

 

The countries due to change from the CFA franc to the eco are Benin, Burkina
Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo - all former
French colonies except Guinea-Bissau.

 

The group is aiming to have the new currency up and running by the end of
2020.--waya

 

 

Egypt and Sudan to operate joint electricity grid from Jan. 12 - agency

CAIRO (Reuters) - Egypt and Sudan will begin operating a joint electricity
grid from Jan. 12 with a capacity of 50 megawatts, Egypt’s state news agency
MENA said on Sunday.

 

The project’s cost has reached 509 million Egyptian pounds ($31.74 million)
and spans 1,000 km (621 miles), MENA said, citing Egypt’s energy minister.

 

($1 = 16.0375 Egyptian pounds)

 

 

 

Egypt competition watchdog approves Uber acquisition of Careem with
conditions

CAIRO (Reuters) - Egyptian regulators have approved Uber’s $3.1 billion
acquisition of regional rival Careem after agreeing to a set of commitments
proposed by the U.S.-based ride-hailing service meant to reduce harm to
competitors.

 

The Careem acquisition was announced in March after more than nine months of
stop-start talks between the two companies, handing Uber a much-needed
victory after a series of overseas divestments.

 

The deal is expected to close in January, depending on regulatory approval
in various territories of which Egypt is among the most significant. Egypt,
with a booming population seen swelling to 100 million, is the biggest in
the Middle East for ridehailing services.

 

Careem will become a wholly owned subsidiary of Uber but will continue to
operate as an independent brand with independent management.

 

“We welcome the decision by the Egyptian Competition Authority (ECA) to
approve Uber’s pending acquisition of Careem,” a spokesman for Uber said.
“Uber and Careem joining forces will deliver exceptional outcomes for
riders, drivers, and cities across Egypt.”

 

Under a series of commitments Uber has made to the ECA, the San
Francisco-headquartered company has agreed to abandon exclusivity provisions
with partners and intermediaries and reduce barriers to entry into the
market.

 

An independent monitoring trustee will be nominated by Uber and approved by
the ECA to ensure adherence to the commitments. Uber will share random
samples of trip data with the trustee monthly to ensure compliance.

 

The commitments must be adhered to for five years from the date the
transaction closes, or when one or more ride-hailing providers achieves 20%
of weekly rides individually or 30% collectively in overlapping areas
excluding Cairo and Alexandria, Egypt’s biggest cities.

 

Excluding surge pricing and promotions, Uber will cap its yearly fare
increases beyond inflationary costs at 10% for Uber X and Careem GO, the
most popular services in Egypt.

 

Surge pricing, a mechanism that raises prices when demand far exceeds
supply, will also be capped on Uber X and Careem GO at 2.5 times. Surge
prices will be applied to a maximum of 30% of annual trips on the two
services.

 

 

 

Sudan to postpone lifting of fuel subsidies - minister

KHARTOUM (Reuters) - Sudan’s transitional government is to postpone lifting
fuel subsidies, initially planned as part of the 2020 budget, the
information minister said on Saturday.

 

Finance minister Ibrahim Elbadawi had said on Friday the fuel subsidies will
be gradually removed.

 

But the government met on Saturday with the former opposition which helped
bring down veteran ruler Omar al-Bashir in April and agreed to not implement
the decision until a conference in March where economic reforms will be
discussed, information minister Faisal Saleh told Reuters.

 

The removal of fuel subsidies is sensitive as it would hit a population
suffering for years from economic crisis and high inflation.

 

Sudan’s transitional authorities face the tough task of turning around an
economy wrecked by three decades of mismanagement under the rule of Bashir,
who the military ousted in April after months of street protests.

 

Complicating Sudan’s recovery is its inclusion on the United States’ list of
state sponsors of terrorism. That designation has so far blocked Sudan from
tapping the International Monetary Fund and World Bank for support.

 

Sudan’s transitional cabinet of technocrats was formed by Prime Minister
Abdalla Hamdok in September after a power-sharing deal was reached between
the Transitional Military Council that took over after Bashir’s overthrow
and the Forces of Freedom and Change (FFC), a coalition of former opposition
and protest groups.

 

Finance Minister Ibrahim Elbadawi said on Friday the transitional government
plans to remove fuel subsidies gradually in 2020. He also said public sector
salaries would be doubled to ease the impact of galloping inflation.

 

The decision to suspend the lifting of subsidies was made after Hamdok,
Elbadawi and other ministers met with FFC representatives, Saleh told
Reuters on Saturday.

 

Elbadawi, a former World Bank economist, told Reuters in November that
public salaries would need to be increased and a social support network
established to prepare for the painful removal of fuel and food subsidies.
He said Sudan would need up to $5 billion in budget support to avert
economic collapse and launch reforms.

 

Hamdok, an economist, told Reuters in November cash transfers were one
scenario discussed to offset a cut in food and other subsidies.

 

 

Libya's NOC may evacuate Zawiya refinery due to fighting nearby

TRIPOLI (Reuters) - Libyan state oil firm NOC is considering the closure of
its western Zawiya port and evacuating staff from the refinery located there
due to clashes nearby, a statement said on Saturday.

 

NOC might also shut down the El Sharara oilfield, whose crude is exported
via Zawiya port, the statement said.

 

Clashes between armed groups have broken out in recent days around Zawiya,
during which a missile almost hit the oil complex. Forces allied to Libya’s
internationally recognised government on Friday accused eastern forces loyal
to Khalifa Haftar of having tried to strike the oil port complex.

 

Haftar’s forces have been trying to take the capital Tripoli, 40 kms east of
Zawiya, in a campaign since April.

 

Zawiya is Libya’s biggest functioning refinery, serving the capital Tripoli
located some 40km east as well as regions in the west and south of the
country. Two workers at Zawiya port said the refinery was working on
Saturday.

 

On Thursday an air strike blamed by local officials on Haftar’s forces hit a
pharmacy in Zawiya town, killing two people.

 

Turkish President Tayyip Erdogan said on Thursday he would send troops to
Libya at the request of Tripoli as soon as next month, putting the North
African country’s conflict at the centre of wider regional frictions.

 

 

 

Nissan's ex-head Carlos Ghosn in surprise Lebanon arrival

Former Nissan boss Carlos Ghosn has reportedly travelled to Lebanon after
leaving Japan, media outlets say.

 

The Financial Times newspaper quotes an associate of Mr Ghosn's saying the
businessman landed in Beirut on Sunday. There is no official confirmation.

 

Mr Ghosn was arrested over allegations of financial misconduct in 2018 and
faces several charges.

 

It is unclear how we has able to leave Japan where he was on bail pending
trial. He denies any wrongdoing.

 

Whether he has struck a deal with prosecutors or fled is unknown. The
businessman holds French and Lebanese passports.

 

French newspaper Les Echos reports that he allegedly arrived in a private
jet which flew to Lebanon from Turkey - although this is also unconfirmed.
And the Wall Street Journal quotes a source who says Mr Ghosn fled Tokyo.

 

His lawyers have accused the Japanese government of conspiring against him,
calling the prosecution's case "politically motivated".

 

Once considered a hero in Japan for turning around Nissan - and becoming the
subject of a comic book there - Mr Ghosn spent 108 days in custody after his
arrest in Tokyo in November 2018.

 

While he has since been released, he was under strict bail conditions and
could not leave Japan.

 

He faces four charges - including an allegation by Nissan that he diverted
money for his own gain. Nissan sacked him three days after his arrest.

 

Japan's Foreign Minister Keisuke Suzuki visited Beirut on 20 December.--BBC

 

 

 

Tesla delivers its first 'Made in China' cars

Tesla has delivered its first cars made in China, marking a major milestone
for the electric vehicle maker.

 

Fifteen Model 3 sedans were handed over at the company's so-called
"Gigafactory" near Shanghai.

 

It comes as Elon Musk's company aims to secure a significant slice of the
world's biggest car market.

 

Tesla's move into the country comes as the trade war has forced other
American companies to shift production out of China.

 

During a ceremony at the company's multi-billion dollar plant in Shanghai,
15 of its employees received cars they had purchased.

 

The event means deliveries of cars have started a little over a year after
construction of the factory got underway.

 

California-based Tesla said that it wanted to start handing over vehicles
before the Lunar New Year beginning on 25 January, and now plans to scale up
deliveries from the start of 2020.

 

The Chinese-made Model 3, priced at $50,000 (£38,000) before subsidies, will
compete with local electric car makers, including NIO and Xpeng Motors, as
well as global brands such as BMW and Mercedes-Benz.

 

Tesla gets the go-ahead to build cars in China

Tesla: China suspends customs clearance

Tesla to build factory in Shanghai

US technology giants Apple, Google, HP, and Dell have all reportedly started
the process of moving production from China to other Asian countries.

 

That's as US tariffs on Chinese-made goods make them more expensive when
they are imported into America, or companies have to absorb the cost
themselves.

 

It also comes after intense pressure from US President Donald Trump for
American companies to bring back manufacturing to the US. In August Mr Trump
issued a demand for all US firms to move production out of China.

 

However, Tesla doesn't plan to export the cars it makes in China to the US,
where they would be hit with tariffs. Instead it wants to sell the cars in
China itself.

 

Previously Tesla was exporting all of the cars it sold in China from the US,
which meant they were hit with tariffs in China.

 

The company isn't just expanding its manufacturing into China. In November,
it revealed plans to build a huge European production facility on the
outskirts of Berlin in Germany.--BBC

 

 

 

Germanwings strike forces 180 flight cancellations

Cabin crew at Lufthansa's low-cost airline Germanwings are staging a
three-day strike over the New Year period, forcing the cancellation of about
180 flights.

 

The walkout, called by the UFO union, began at 23:00 GMT on Sunday and will
last until 23:00 GMT on Wednesday.

 

Talks over the weekend broke down, with the union rejecting management
concessions as insufficient.

 

Last month, a cabin crew strike caused Lufthansa to cancel 1,500 flights.

 

UFO wants to secure higher pay and better benefits, as well as making it
easier for staff to get long-term contracts.

 

After last month's strike, Lufthansa agreed to arbitration. But after the
breakdown of talks on Saturday, German media reported that the two sides
were unable to agree on the topics to be covered by the arbitration process.

 

UFO vice-president Daniel Flohr told ZDF television that the strikes could
be extended at short notice if necessary.

 

A Germanwings spokeswoman said about 15% of flights due to take place during
the strike period had been cancelled.

 

Most of the affected flights are within Germany, but some flights to Austria
and Switzerland have also been halted.

 

Cologne-Bonn, Munich, Hamburg and Berlin-Tegel airports are the worst
hit.--BBC

 

 

 

Bank of England chief Mark Carney issues climate change warning

The world will face irreversible heating unless firms shift their priorities
soon, the outgoing head of the Bank of England has told the BBC.

 

Mark Carney said the financial sector had begun to curb investment in fossil
fuels – but far too slowly.

 

He said leading pension fund analysis "is that if you add up the policies of
all of companies out there, they are consistent with warming of 3.7-3.8C".

 

Mr Carney made the comments in a pre-recorded BBC Radio 4 Today interview.

 

The interview, by presenter Mishal Husain, is one of several items on the
programme which are focusing on climate change, on the day the show is guest
edited by environmental campaigner Greta Thunberg.

 

Mr Carney added that the rise of almost 4C was "far above the 1.5 degrees
that the people say they want and governments are demanding”.

 

Scientists say the risks associated with an increase of 4C include a nine
metre rise in sea levels - affecting up to 760 million people – searing
heatwaves and droughts, and serious food supply problems.

 

Mr Carney, who will next year start his new role as United Nations special
envoy for climate action and finance, continued: “The concern is whether we
will spend another decade doing worthy things but not enough... and we will
blow through the 1.5C mark very quickly. As a consequence, the climate will
stabilise at the much higher level.”

 

Speaking to the Today programme, he re-iterated his warning that unless
firms woke up to what he called the climate crisis, many of their assets
would become worthless.

 

“If we were to burn all those oil and gas [reserves], there’s no way we
would meet carbon budget,” he said. “Up to 80% of coal assets will be
stranded, [and] up to half of developed oil reserves.

 

“A question for every company, every financial institution, every asset
manager, pension fund or insurer: what’s your plan?

 

“Four to five years ago, only leading institutions had begun to think about
these issues and could report on them.

 

“Now $120tn worth of balance sheets of banks and asset managers are wanting
this disclosure [of investments in fossil fuels]. But it’s not moving fast
enough.”

 

Climate campaigners Extinction Rebellion question whether the capitalist
system can halt climate change.

 

Mr Carney said capitalism had a vital role in raising funding for clean
technologies. But he added that it had to be tempered by government-imposed
incentives, rules and prohibitions of the most damaging activities.

 

Climate change was what he called a “tragedy of the horizon”, because the
decision-making time horizon of investment managers is between two and 10
years.

 

“In those horizons there will be more extreme weather events, but by the
time that the extreme events become so prevalent and so obvious it’s too
late to do anything about it," he said.

 

“We look to political leaders to start addressing future problems today.”

 

He told those questioning the consensus on climate change: “We can’t afford
on this one to have selective information, spin, misdirection
 It needs to
be absolutely clear because we are all in on it.

 

“To deliver, there needs to be shared understanding about what’s necessary.
[But] it is reasonable for there to be debates at the margin about where
does the role of the state stop - and what’s the role of markets.”

 

Mr Carney applauded the UK government for hosting next year’s vital global
climate conference in Glasgow. He said success was “vital”.

 

Stress tests for businesses

Under Mr Carney’s leadership the Bank of England recently launched a “stress
test” to determine which firms and sectors would be worst-hit by climate
change.

 

The question is how fast financial institutions can change course.

 

Recently, investment bank Goldman Sachs ruled out future finance for oil
drilling or exploration in the Arctic.

 

The bank said it would not invest in new thermal coal mines (for power
stations) anywhere in the world.

 

It also announced plans to help its clients manage climate impacts by
selling weather-related catastrophe bonds.

 

Insurance giant AXA said it would stop insuring any new coal construction
projects, and totally phase out existing insurance and investments in coal
in the EU, by 2030.

 

Nest, the workplace pension scheme set up by the government, is testing
whether it can invest its Climate Aware Fund in firms compatible with a 1.5C
warming.

 

Environmentalists applaud the moves but say they don’t go remotely far
enough. Scientists say nations must cut emissions five-fold to avoid a
temperature rise over 1.5C.

 

'Dire consequences'

Meanwhile, the heads of two key environmental bodies have warned that 2020
is the "last chance" to bring the world together to tackle climate change to
protect communities and nature.

 

Climate change and damage to nature are already having "dire consequences",
the leaders of government agencies Natural England and the Environment
Agency said.

 

In an article on the Green Alliance website, Natural England chairman Tony
Juniper and the Environment Agency's Emma Howard Boyd pointed to the recent
flooding which saw hundreds evacuated at Fishlake, Doncaster, with some
people still out of their homes.

 

And a report in October on the state of nature in the UK found two-fifths
(41%) of the country's wildlife species had declined over the past 50 years
and 13% of the species tracked were threatened with extinction in England.

 

"It's clear that 2020 is our last chance to bring the world together to take
decisive action on climate change in order to protect our communities and
reverse the alarming loss of wildlife we have witnessed in recent years," Mr
Juniper and Ms Howard Boyd wrote.--BBC

 

 

 

'We can give a lot of the power back to the fans'

The BBC's weekly The Boss series profiles different business leaders from
around the world. This week we speak to Allen Lau, co-founder and chief
executive of global storytelling website and app Wattpad.

 

In the early days of his company, Allen Lau had a favourite evening pastime.

 

He would lurk on the online storytelling community he had developed along
with co-founder Ivan Yuen, seeking out new writers.

 

Allen would regularly discover 10, maybe 20 writers he'd never seen before
who were sharing their original work on Wattpad.

 

Then one evening: "I just kept on clicking, and it never ended. I kept
bumping into new people," says the 51-year-old.

 

Not only were new writers flocking to the platform, but fans were
interacting with their favourite authors. Allen knew something had clicked -
a storytelling community was born.

 

Launched in 2006, Wattpad now has more than 80 million readers, and four
million active writers on the site each month.

 

It is a global platform backed by more than $117m (£88m) from international
investors in Asia, the US, and Canada.

 

With Wattpad's revenue streams ranging from in-story advertising, to a
paid-for premium version, and branded and sponsored content, tech site
Crunchbase estimates that the company's annual turnover is now more than
$24m.

 

>From the start, Allen and Ivan, 42, had big aspirations, but Wattpad's story
isn't one of overnight success.

 

Hong Kong-born Allen moved to Canada in the late 1980s aged 19. He studied
electrical engineering, and was hired by Microsoft, a job that wasn't the
right fit for the young university graduate with an itch for
entrepreneurship.

 

He left to work at a Canadian software start-up, which he witnessed "rocket
ship" from about 100 employees to more than 700 in about three years, before
it was snapped up by an American firm. For Allen, it was an instructional
experience about the possibilities of success.

 

Ivan, also an engineer, was an early hire at Allen's first start-up, a
mobile gaming company based in Toronto. Ivan later moved to Vancouver, but
the pair kept in touch. One day Ivan sent Allen a message, wanting to show
him a project he was tinkering with, a website where users could share
original writing.

 

Allen, who has both a love of both reading and electronic gadgets, was
already working on something similar, a way for people to read on the then
popular Motorola Razr mobile phone.

 

"It didn't take long for us to decide 'let's do this together'," says Allen.
The name they picked is a twist on the term e-book, with "watt" for
electricity combined with "pad" where people can jot down ideas.

 

That was late 2006, the year Google bought video sharing site YouTube for
$1.65bn.

 

Allen recalls thinking: "If YouTube can generate 40 million users from zero
in a year, perhaps we could generate a few million. But in the end, it was
only about 1,000. Clearly, it wasn't working."

 

They had launched the platform with thousands of public domain books,
classics like Pride and Prejudice, as content to draw in readers. It wasn't
the draw they hoped. Their Google ad revenue in 2007 was a meagre $2. In a
word, early results were "depressing".

 

But the stars aligned for Wattpad with Apple's release of the iPhone, and
the subsequent launch of its app store in 2008. Mobile text went from just
about readable to user friendly almost overnight.

 

"If I had a crystal ball I probably would have started the company a year
later than we did," says Allen. "But the good news is, it's always better to
be early than late."

 

It was two years from Wattpad's launch that a user finally posted an
original work to the site - a Victorian-era vampire novel called Blind
Truths. Within 18 months of that first, the company had overcome what Allen
called the "chicken and egg" problem: "Without content, we don't have any
readers.

 

"Without any readers, no one would upload content. So we had to get the
snowball rolling. But once the snowball was rolling, it just rolled faster
and faster."

 

Both the platform's reach and community were a big draw. Creators can
interact directly fans and build an audience. And its support for multiple
languages, from Vietnamese to Filipino, helped attract international users.

 

By 2011, the company had a million registered users, and the audience has
continued to grow. In years since, some Wattpad authors have achieved
massive commercial, if not always critical, success.

 

American Anna Todd became a literary phenomenon with her novel, After,
written on her smartphone and released chapter by chapter.

 

It has now been read by more than 600 million Wattpad users, while the
ensuing series has a total 1.5 billion reads to date - and scored the
first-time author a publishing deal. A subsequent film adaptation was
released in April 2019, and won a People's Choice Award in November.

 

Meanwhile, Beth Reekles, a British 17-year-old had a runaway success with
her rom-com novel The Kissing Booth. It was later published by Penguin
Random House, and adapted for Neflix, becoming "one of the most-watched
movies" of 2018, according to the streaming giant.

 

Wattpad has now also moved into the broader entertainment space,
collaborating with companies in North America, Europe, Southeast Asia, and
Latin America to bring the platform's most popular works to televisions and
movie screens. It has also launched its own print publishing division.

 

Says Allen: "Once you have a million users there will be a hundred ways to
make money, once you have a hundred million users there will be 10,000 ways
to make money."

 

To uncover emerging trends and discover which of the half a billion uploads
that have been made to the platform could be best-sellers and blockbusters,
Wattpad uses audience data and artificial intelligence algorithms, which
deconstruct information as granular as sentence structure.

 

The company estimates thousands of writers, like Ms Todd and Ms Reekles,
have made money on the platform. Wattpad has various ways for writers to
monetise their output, including a recently launched a programme that allows
readers to directly pay select writers for their work.

 

Additionally, top writers have the opportunity to work on branded content,
with firms like Coca-Cola and H&M interested in Wattpad's predominantly
millennial and generation Z users. Then there's the possibility a writer
could become the platform's next Anna Todd.

 

Lorraine Shanley, a publishing industry consultant, says "publishers have
been fascinated by Wattpad and impressed by what they have done".

 

"Wattpad offers its writers different ways of monetising their own work so
it doesn't look like they are taking advantage of their fans, it looks there
is a courting and promoting of fans. That's a tightrope and they've done it
very well".

 

Allen says that watching Wattpad authors have success is "very emotional".
"We proved that we don't have to do things in a traditional way, we don't
have to have a gatekeeper," he says.

 

"We can democratise the process. At the end we can give a lot of the power
back to the fans."--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
Faith Capital (Pvt) Ltd for general information purposes only and does not
constitute an offer to sell or the solicitation of an offer to buy or
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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
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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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