Major International Business Headlines Brief::: 15 February 2019

Fri Feb 15 07:54:54 CAT 2019

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Major International Business Headlines Brief::: 15 February 2019

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*  S.Africa's Ramaphosa says Eskom split will minimise risks to economy

*  Sibanye-Stillwater may cut nearly 6,000 jobs in gold shake-up

*  South Africa's Eskom extends power cuts, rand hits 6-week low

*  Tanzania hydropower dam to cost more than double government estimate -study

*  Aker Energy eyes IPO after submitting Ghana oilfield plan in March

*  Kenya's KenGen to raise funds from the market this year, eyes green bond

*  Huawei to build data centres in South Africa

*  Amazon cancels New York City campus plan

*  German economy narrowly avoids recession

*  Airbus scraps A380 superjumbo jet as sales slump

*  JP Morgan creates first US bank-backed crypto-currency

*  Brexit 'monster' urges Dutch to prepare

*  Name checks on payments face delay

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S.Africa's Ramaphosa says Eskom split will minimise risks to economy

CAPE TOWN (Reuters) - South Africa’s President Cyril Ramaphosa said on Thursday that his government’s plan to split struggling state power firm Eskom into three entities would reduce risks to the economy by enabling better regulatory oversight and increasing competition.

“Restructuring will reduce the risk of a massive Eskom that at times has been termed ‘too big to fail’, placing government in a position where all our eggs are in one basket,” Ramaphosa said in a speech to parliament.

“It is not a path to privatisation,” he added, promising that a financial support package for Eskom would be accompanied by a far-reaching turnaround plan and that officials would hold consultations with trade unions.

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Sibanye-Stillwater may cut nearly 6,000 jobs in gold shake-up

JOHANNESBURG (Reuters) - Sibanye-Stillwater could cut nearly 6,000 jobs in a potential restructuring of the company’s gold mining operations following losses at some of its mines last year.

The precious metal miner said it had entered into talks with stakeholders on restructuring its gold operations following financial losses at the Beatrix 1 and Driefontein 2,6,7,8 shafts during 2018, which could affect around 5,870 employees and 800 contractors.

The company, which has both gold and platinum mines in South Africa, employs more than 61,000 people in its local operations.

“Our best attempts to address the ongoing losses at these operations have however been unsuccessful and sustaining these losses may threaten the viability of our other operations,” Chief Executive Neal Froneman said in a statement.

Sibanye said above inflation cost increases, including labour and electricity, over the years and large mining areas had contributed to the erosion of operating margins.

“The mining areas are getting further and further away and more scattered so you are operating on a bigger and bigger footprint but producing less volume of gold so that all impacts on the profitability,” Sibanye spokesman James Wellsted said.

Gold producers in South Africa have had their profits squeezed by rising costs, labour unrest and declining grades.

But job cuts are politically sensitive in South Africa, where the unemployment rate is more than 27 percent, and especially ahead of national elections this year.

Mines minister Gwede Mantashe issued a statement noting the company’s decision. “Minister Mantashe urges stakeholders to engage in good faith to save jobs.”

The Association of Mineworkers and Construction Union (AMCU), the largest union at Sibanye’s gold operations which employs about 37,000 people, could not immediately be reached for comment.

Sibanye-Stillwater’s potential cutbacks are the latest in a round of job losses in the country’s mining industry.

Gold Fields said last year it planned to cut costs and 1,100 jobs at its South Deep mine and Impala Platinum said it planned to cut its workforce by a third over two years.

Sibanye said last month that its 2018 bullion production would miss forecasts and come in at 1.1 million ounces, even after the company implemented plans to curb losses following a strike.

A number of miners died at Sibanye’s South African mines last year, including seven who were killed in May after an earthquake caused a cave-in.

“Obviously issues like the safety instances and the strike does add to the financial pressure,” Wellsted said, adding that these were not the main cause for the operation’s troubles.

Sibanye’s shares rose 3.61 percent to 14.94 rand by 1335 GMT, outpacing the mining index which was up 1.6 percent, boosted the prospect that restructuring could improve its gold operations performance.

“A lot of the gold mines within Sibanye’s business aren’t profitable at this current level so they need to be in a position to contain costs and be able to improve their top line,” said Paul Chakaduka, trader at Global Trader.

($1 = 0.7808 pounds)

South Africa's Eskom extends power cuts, rand hits 6-week low

JOHANNESBURG (Reuters) - South Africa’s Eskom imposed a fifth day of power blackouts on homes and businesses on Thursday, helping drive the rand currency to a six-week low as the cash-strapped utility struggles with coal shortages and breakdowns at some of its plants.

Eskom, which supplies more than 90 percent of the country’s power, is technically insolvent, the government said on Wednesday, and warned an urgent bailout was needed to help it manage its more than $30 billion of debt.

“Due to a shortage of capacity, Eskom will implement Stage 2 rotational load-shedding from 0800 (0600 GMT) today and this is likely to continue until 2200 (2000 GMT),” Eskom said on Thursday.

This means up to 2,000 megawatts of electricity will be cut from the national power grid. On Monday the firm slashed 4,000 megawatts from the national grid in its largest cut since 2014.

Locally referred to as “load-shedding”, the power cuts are an emergency measure to prevent the power system from a total collapse, Eskom says.

Around a third of Eskom’s 45,000 MW capacity is offline.

The outages, the worst in several years, expose risks to Africa’s most industrialised economy and have spooked investors just days before a national budget, prompting a sharp slide in the rand and government bonds.

The rand fell half a percent versus the dollar to its lowest in six weeks on Thursday and is now down 3 percent in three days.

For ordinary South Africans the cuts mean some mothers are struggling to cook for their children and traffic gridlock in major cities as traffic lights stop working.

Eskom’s woes, which reflect the failure of successive governments to take on labour unions, pose a potential threat to South Africa’s credit rating, with Moody’s the last of the top three ratings agencies to rate it investment grade.

President Cyril Ramaphosa’s government has called for the company to be split in three, but the National Union of Mineworkers (NUM) on Thursday warned against splitting it up, telling his African National Congress (ANC) not to take NUC members’ votes for granted in a general election set for May.

The NUM is a close ANC ally and its warning comes hours before President Ramaphosa is scheduled to deliver a state of the nation address in parliament.

He is expected to be asked for further details on his plan to split up Eskom, a plan which will not involve privatisation, Public Enterprises Minister Pravin Gordhan said on Wednesday.

Eskom started cutting power on Sunday and intensified outages on Monday after six of its generating units unexpectedly went offline.

Tanzania hydropower dam to cost more than double government estimate -study

NAIROBI (Reuters) - Tanzania’s Stiegler’s Gorge Dam, due to be built on a UNESCO World Heritage site, will cost more than double the government’s estimates, an independent study showed on Thursday.

In December, Tanzania signed a deal with two Egyptian companies, El Sewedy Electric Co and Arab Contractors, to build the $3 billion hydroelectric plant.

Joerg Hartmann, an independent expert and assessor on the sustainability of hydropower projects, said the dam was likely to cost $7.58 billion once financing and other costs were taken into account, rising to $9.85 billion on account of cost overruns associated with such projects.

His study was published by OECD Watch, a worldwide network of civil society organisations with more than 130 members in over 50 countries.

A spokesperson for Tanzania’s power utility TANESCO, which is implementing the project on behalf of the government, did not immediately respond to a request for comment on the study’s findings.

The costs of projects of a similar scale commissioned between 2010 and 2017 had risen by 31 percent on average, the study found, citing IRENA (International Renewable Energy Agency).

Known for its elephants, black rhinos and giraffes, the Selous Game Reserve on which the dam will be built, covers 50,000 square km and is one of the largest protected areas in Africa, according to UNESCO.

The study was released on the same day as Tanzania handed over the construction site in the south of the country to El Sewedy and Arab Contractors, ignoring concerns about its potential impact on wildlife.

Arab Contractors disputed the study’s higher price tag for the dam, saying the highest bid for the project was $3.2 billion and that their bid was roughly $2.9 billion.

“Is it reasonable that all these companies that bid – big companies and from different nationalities – all of them did not know how to value the project and study it correctly?” said Osama Ali, spokesman at Arab Contractors.

An El Sewedy Electric spokesperson could not immediately be reached for comment.

The project will generate 2,115 megawatts of electricity when it is completed, energy minister Medard Kalemani said during the handover ceremony.

Hartmann, whose work experience on dams spans 24 years in 45 countries, has worked for the International Hydropower Association, the World Bank and Asian Development Bank, Indian state-run utility NHPC and Zambia’s Western Power Company and Mekong River Commission of Laos, among other organisations.

Aker Energy eyes IPO after submitting Ghana oilfield plan in March

OSLO (Reuters) - Norwegian oil company Aker said on Thursday that its exploration start-up in Ghana will submit development plans to Ghanaian authorities in March and the parent will then decide whether to sell stakes via an initial public offering or other means.

The subsidiary, Aker Energy, plans to develop the deepwater Pecan field off Ghana.

“Depending on the approval process in Ghana, we believe the first oil is achievable in late 2020 or early 2021,” Aker’s Chief Executive Oeyvind Eriksen told Reuters during an earnings presentation.

A recent appraisal had confirmed contingent resources of 450 million-550 million barrels of oil equivalent (mmboe) at the field, Aker said.

Aker Energy plans to drill another two wells in February, expected to prove between 150 and 450 mmboe of additional resources, with preliminary results expected before the development plan is submitted, Eriksen told the presentation.

Aker controls oil company Aker BP, 30 percent owned by BP, which has announced plans to triple its oil production by 2025 from 155,700 boepd in 2018.

Expected production from Ghana, and potential acquisitions in Norway, support the plan of Aker’s main shareholder, Norwegian billionaire Kjell Inge Roekke, to increase total oil output to over 1 million boepd by 2025, Eriksen said.

Aker Energy operates and holds a 50 percent stake in the DWT/CTP block off Ghana, which contains several discoveries.

Its partners are Russia’s Lukoil (38 percent), the Ghana National Petroleum Corporation (10 percent) and Fueltrade (2 percent).

Eriksen also told Reuters that Aker was still interested in mergers and acquisitions involving its oil service firms, including Aker Solutions.

“We still see opportunities (for M&A)... but the downturn has been more rough for our competitors, which have been more preoccupied with managing price volatility instead of focusing on strategic decisions,” he said.

He declined to say whether he expected any deals to be made this year as oil prices have recovered from a slump in the last quarter of 2018.

As a result of the price fall and capital market volatility, Aker’s net asset value (NAV), its core performance indicator, dropped to 41.7 billion crowns ($4.8 billion) in the fourth quarter from 63.2 billion crowns in the third quarter.

However, the company proposed to increase its dividend to 22.5 crowns per share for 2018, up from 18 crowns for 2017, as it has received a record 2.2 billion crowns in cash from its portfolio companies for the full year, and expected this figure to grow to over 3 billion crowns in 2019.

Aker shares were trading down 0.7 percent by 1150 GMT, underperforming a wider European oil and gas index which was down 0.2 percent.

($1 = 8.6545 Norwegian crowns)

Kenya's KenGen to raise funds from the market this year, eyes green bond

NAIROBI (Reuters) - The Kenya Electricity Generating Company plans to raise funds from the market later this year and it may opt to issue the country’s first green bond, its chief executive said.

KenGen has a 1,631 megawatt annual capacity and it supplies 70 percent of the East African nation’s electricity. Private investors hold 30 percent of the company while the rest is held by the state.

Rebecca Miano, KenGen’s CEO, said the company would go to the market once it redeems its 10-year, 25 billion shillings ($250 million) bond in October.

The bond was heavily oversubscribed when it was issued in 2009.

“Our finance people are burning the midnight oil to look at the possibilities,” she told Reuters in an interview late on Wednesday, without giving a figure for the target amount.

“The team is looking at asset backed securities, they are also looking at green bonds.”

The so-called green bonds help to finance projects in the renewable energy, energy-efficiency, green transport and wastewater treatment sectors.

Kenya’s capital markets regulator is set to unveil regulations for private issuance of green bonds next week, paving the way for the first issue.

Although Kenya has high consumer electricity tariffs compared with countries like Egypt and South Africa, the government’s policies had boosted investment in the sector, Miano said, helping it to avoid blackouts or schedule cuts.

“Kenya was among the first countries in Africa to liberalise generation and it has its own advantages. You have many players and it brings competition... you have adequate power,” she said.

KenGen has shifted its strategy in recent years to focus on renewable energy in order to reduce the risk posed by its hydro generation dams, which are normally susceptible to a drop in production when the rains fail.

Geothermal steam, hot underground steam found in the Rift Valley which is used to drive turbines for electricity production, accounts for nearly a third of the firm’s annual production, Miano said.

“Our geothermal-led strategy is bearing fruit,” she said, adding the company was developing capacity for an extra 720 MW in the next four years to 2022.

The new plants being developed are mainly in geothermal with one plant, with a capacity for 80 MW, being in wind.

KenGen paid a dividend to shareholders for its year ended last June, breaking a two-year dividend drought associated with the costs of building the new geothermal plants and installing additional capacity in existing plants.

Miano said shareholders might secure additional dividends in the future.

“The outlook is positive because we have projects that we are implementing that will increase our business and we do hope that the board will continue (recommending a dividend),” she said. ($1 = 100.1000 Kenyan shillings)

Huawei to build data centres in South Africa

CAPE TOWN (Reuters) - China’s Huawei will build two data centres in South Africa from March, it said, as part of plans to expand cloud services across Africa.

“The company is working with South African partners for the construction of the data centres in Johannesburg initially and later Cape Town,” Huawei said in a statement.

Its cloud service will be available to organisations in South Africa as well as neighbouring countries, it said.

The Chinese firm, at the centre of global security concerns, will challenge Amazon.com Inc, which is also expanding its presence in the emerging tech hub of Cape Town in a challenge against cloud computing rival Microsoft Corp.

Amazon Web Services (AWS) is the global leader in cloud computing.

In the last quarter of 2018 AWS’s revenue grew 46 percent to $7 billion while Microsoft’s grew 76 percent to $4 billion to remain in second place, data from research firm Canalys showed.

Amazon cancels New York City campus plan

Amazon has said it will not build a new headquarters in New York, citing fierce opposition from state and local politicians.

The dramatic turnabout comes just months after the firm named New York City one of two sites selected for major expansion over the next decades.

City and state leaders had agreed to provide about $3bn (£2.3bn) in incentives to secure that investment.

Those subsidies had prompted fierce backlash in some quarters.

Amazon said its plans to build a new headquarters required "positive, collaborative relationships with state and local elected officials who will be supportive over the long term".

It said: "A number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward with the project we and many others envisioned.

"We are disappointed to have reached this conclusion."

In November, Amazon announced plans to invest about $2.5bn and add more than 25,000 "high-paying" jobs at campuses in New York and near Washington DC over the next two decades.

The news capped a 14-month search for a new site that saw cities and towns across North America competing to woo the e-commerce giant.

In New York, Governor Andrew Cuomo and Mayor Bill DeBlasio championed the project, which Amazon said would generate more than $10bn in new tax revenue in New York.

Polls had found that a majority of New Yorkers also supported Amazon's plan.

However, it drew opposition from unions, members of the City Council and others, including newly elected Rep Alexandria Ocasio-Cortez, angry over the billions in incentives promised to one of the world's most valuable companies.

The risk of rising rents, which have spurred tensions in Amazon's hometown of Seattle, were also a concern.

Opponents celebrated Amazon's decision on Thursday.

"When our community fights together, anything is possible, even when we're up against the biggest corporation in the world," Council Member Jimmy Van Bramer said.

"Defeating an unprecedented act of corporate welfare is a triumph that should change the way we do economic development deals in our city and state forever."

Amazon supporters said the critics were short-sighted. They said they were worried about the long-term economic consequences as populist messages appear to gain traction.

"The New York Senate has done tremendous damage," Gov Cuomo said. "They should be held accountable for this lost economic opportunity."

No new search

Amazon currently employs more than 5,000 people across New York City. It said it expected its staff numbers in the region to continue to grow.

The firm said it would not look for an alternative headquarters site, but would move forward as planned at the site near the Pentagon in Northern Virginia.

It will also distribute its growth across its offices in the US and Canada.

Amazon is also due to receive incentives for the new campus in Virginia, but that package, which is less generous than the one promised in New York, has been less controversial.

Frank Raffaele owns Coffeed, a small chain of coffee shops that started in Long Island City, the neighbourhood where Amazon was expected to expand.

He said he was disappointed the project had been dropped over "political posturing".

"This was transformative for New York and the fact that it's not going to happen anymore is extremely sad," he said. "This was our chance to shine."

Amazon may have expected its search for "HQ2" to go smoothly.

After all, the firm has won billions in incentives from cities and states, and plenty of good PR, over the last decades by promising jobs at its warehouses. Now it was offering a headquarters.

But the subsidies that local officials have lavished on corporations like Amazon in recent years have tested the public's patience.

And opponents especially questioned the need to use such incentives to spur expansion in Long Island City - one of the fastest-growing areas of one of the country's most successful cities.

Polls showed support among the public, but Amazon, which prides itself on being a nimble business despite its size, didn't become a giant by embracing battles with the potential to tarnish its consumer-focused brand.

All the more reason to back away.--BBC

German economy narrowly avoids recession

Germany's economy just about avoided falling into recession during the final three months of last year.

Europe's largest economy registered zero growth during the fourth quarter of 2018, the country's Federal Statistics Office said.

That means it avoided two consecutive quarters of contraction, which is the usual definition of a recession.

A weak trade performance dragged on the economy, and consumer spending remained subdued.

The zero growth recorded in the October-to-December period followed a 0.2% contraction in the previous quarter.

Reasons for slower growth last year include a slowdown in the global economy and a weaker car sector, with German consumers less willing to buy new cars amid confusion over new emission standards.

In addition, low water levels, particularly in the Rhine, affected growth by holding back movement of some goods.

Italy in recession amid sluggish eurozone

'Worrying' outlook

Jack Allen, senior Europe economist at Capital Economics, told the BBC: "If you look at Germany across 2018 we've seen a pretty broad-based slowdown in growth. We've seen household consumption slow, we've seen business investment slow and we've seen export growth slow.

He added: "What's particularly worrying is that the early signs for 2019 suggest that a strong rebound is unlikely."

US tariffs on EU car exports, which US President Donald Trump has threatened, could have a major impact on Germany, Mr Allen said, but even if these are avoided the slowdown in the global economy means Germany is still only expected to grow by about 1% this year, compared with about 1.5% in 2018.

However, Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said he was "optimistic" that the first quarter of this year would be better.

"The January [economic] surveys were poor... but net exports won't be in free fall forever, and consumers' spending also ought to pick up."

It couldn't have been much closer. And it is certainly possible that subsequent revisions to these figures will take the fourth quarter figure below zero and Germany into recession as the term is often defined.

For now though it looks like a very soft patch that has affected much of Europe.

Italy had a recession at the end of last year. The eurozone as whole has managed to continue to grow in spite of the weakening performance of two its largest economies. But it has been markedly slower.

That said, the jobs situation specifically in Germany is pretty good. Unemployment is among the lowest in the world at just above 3%.--BBC

Airbus scraps A380 superjumbo jet as sales slump

European aircraft manufacturer Airbus has pulled the plug on its struggling A380 superjumbo, which entered service just 12 years ago.

Airbus said last deliveries of the world's largest passenger aircraft, which cost about $25bn (£19.4bn) to develop, would be made in 2021.

The decision comes after Emirates, the largest A380 customer, cut its order.

The A380 faced fierce competition from smaller, more efficient aircraft and has never made a profit.

What has prompted Airbus' decision?

The A380's future had been in doubt for several years as orders dwindled. But in a statement on Thursday, Airbus said the "painful" decision to end production was made after Emirates reduced its latest order. The Dubai-based airline is cutting its overall A380 fleet size from 162 to 123.

Emirates said it would take delivery of 14 further A380s over the next two years, but has also ordered 70 of Airbus' smaller A330 and A350 models.

"Emirates has been a staunch supporter of the A380 since its very inception," said the airlines' chairman Sheikh Ahmed bin Saeed al-Maktoum. "While we are disappointed to have to give up our order, and sad that the programme could not be sustained, we accept that this is the reality of the situation," he added.

Why did the Airbus A380 fail?

The order cut meant keeping production going was not viable, said Airbus chief executive Tom Enders, who is due to step down in April.

There was "no basis to sustain production, despite all our sales efforts with other airlines in recent years" he said.

Airbus has taken a €463m charge for shutdown costs, but it is expected that the repayment of government loans could be waived to help cushion the blow.

The aerospace giant said the financial impact of the decision was "largely embedded" in the firm's 2018 results, which showed a net profit for 2018 of €3bn (£2.6bn) up nearly 30% from the previous year.

Airbus said it would deliver between 880 and 890 new commercial aircraft this year.

What does it mean for jobs?

Airbus said it would start discussions with partners regarding the "3,000 to 3,500 positions potentially impacted over the next three years".

The BBC understands that around 200 jobs in the UK could be under threat from the decision.

Airbus confirmed it hopes to redeploy a "significant" number of affected staff to other projects.

Mr Enders said: "It needs to be evaluated. It's clear we make a lot of wings in Britain and a few wings for the A380.

"Hopefully we can redeploy a significant number of our employees there and re-use also the infrastructure."

Airbus UK makes the wings for its wide variety of aircraft in the UK. The company employs about 6,000 staff at its main wings factory at Broughton in Flintshire, as well as 3,000 at Filton, near Bristol, where wings are designed and supported.

Parts of the A380 are manufactured in France, Germany, Spain, and the UK, with final assembly and finishing split between Toulouse and Hamburg.

Airbus had already cut staffing as A380 orders dried up, and the future of employment at the company very much now depends on the success of its new generation of aircraft.

Unite, the largest union representing aerospace workers in the UK and Ireland, said it was "bitterly disappointed" by the news, adding it would seek "urgent assurances" from Airbus that there would be no job losses because of the decision.

"We are of the firm belief that with a full order book in single aisle planes, such as the A320, that our members affected can be redeployed on to other work in Airbus," said Rhys McCarthy, Unite's national officer for aerospace.

Why has demand for the A380 fallen?

The spacious jet, which had its first commercial flight in 2007 with Singapore Airlines, was popular with passengers but it was complicated and expensive to build, in part thanks to the way production was spread across various locations.

But ultimately demand for the A380 from airlines dried up as the industry shifted away from larger planes in favour of smaller, wide-body jets.

When Airbus was conceiving the A380, Boeing was also considering plans for a superjumbo. But the US company decided to scrap the idea in favour of its smaller, efficient - and more successful - 787 Dreamliner.

"The very clear trend in the market is to operate long-haul aircraft with two engines [such as] Boeing's 787 and 777, and Airbus's A330 and A350," said Greg Waldron, Asia managing editor of Flight Global.

Airbus had been working on a revamped A380 to make it more efficient, but needed sufficient launch orders to make the huge investment viable.

Despite Airbus' website describing the Airbus as the "future of long-distance travel" the last aircraft will be delivered in 2021.

Where did Airbus go wrong?

Analysis: By Dominic O'Connell, Today programme business presenter

When Airbus's A380 first took off it was hailed as a technological marvel that would meet airlines' needs for a new large aircraft to connect the world's crowded airport hubs - London, New York, Dubai, Tokyo. Airbus said the market for the giant planes would be 1,500.

After today's decision to end production, it will have made just over 250.

In hindsight, airlines were already turning their back on very large aircraft when the A380 made its debut.

Advances in engine technology meant planes no longer needed four engines to fly long distances - and carriers were able to use a new generation of light, fuel-efficient, twin-engined aircraft to link secondary cities, bypassing the crowded hubs altogether.

Even though Airbus was aware of the threat posed by these new types of plane, they pressed ahead.

There was a bigger game afoot - Airbus needed to negate Boeing's 747, believing that the profits the American company made on 747 sales were helping it cross-subsidise other, smaller planes. The A380 succeeded in that - the last passenger 747 was built two years ago - but Boeing will have a kind of last laugh.

Freighter versions of the 747 will be built past 2021, meaning the venerable jumbo jet will outlive the plane sent to kill it.--BBC

JP Morgan creates first US bank-backed crypto-currency

US investment bank JP Morgan has created a crypto-currency to help settle payments between clients in its wholesale payments business.

JPM Coin is the first digital currency to be backed by a major US bank.

The crypto-currency, which runs on blockchain technology, has been used successfully to move money between the bank and a client account.

JP Morgan says it sees potential in using digital coins to reduce risk and enable instant transfers.

Although JP Morgan's chief executive Jamie Dimon has publicly criticised Bitcoin - the first crypto-currency in existence - on several occasions, the bank says it has always "believed in the potential of blockchain technology".

"We are supportive of crypto-currencies as long as they are properly controlled and regulated," Umar Farooq, JP Morgan's head of Digital Treasury Services and Blockchain, wrote in an online Q&A page.

How do crypto-currencies work?

Virtual currencies can be used to pay for things in the real world, such as a hotel room, food or even a house.

Digital tokens are held in online wallets, and can be sent anonymously between users.

For this reason, crypto-currencies are attractive to people who want to make illegal purchases on the Dark Web - a part of the internet that is not indexed by search engines.

Is blockchain living up to the hype?

What is Bitcoin?

Bitcoin buster? The search for a more stable cryptocurrency

What is blockchain?

A blockchain is a ledger of blocks of information, such as transactions or agreements, that are stored across a network of computers.

This information is stored chronologically, can be viewed by a community of users, and is not usually managed by a central authority such as a bank or a government.

The concept was designed to ensure security and anonymity for users, by preventing tampering or hijacking of the network.

Once published, the information in a certain block can't be changed. If people try to tamper with that information, it becomes obvious.

This is a powerful concept. Ten years ago, blockchain was combined with other technologies to create cryptocurrencies, and the first blockchain-based cryptocurrency was Bitcoin.

Can anyone use JPM Coin?

No. JPM Coin is not for retail customers - it will be used internally by JP Morgan to enable the instantaneous transfer of payments between institutional accounts.

When a JP Morgan client deposits money into an account, the money is converted into an equivalent number of JPM Coins, so $1m equals one million JPM coins.

The client can then use the coins to perform transactions over the bank's blockchain network Quorum with other clients, for example money movement or payments in securities transactions.

Once the transactions have been performed, holders of JPM Coins can redeem them for US dollars from the bank.

Does JP Morgan really need this?

Not everyone is convinced that JP Morgan needed to create its own digital currency.

A blockchain is designed to be decentralised, so no one party has control over transactions being sent over the network.

This is the opposite of the JPM Coin concept.

"It doesn't even need a blockchain at all because JP Morgan runs it. They could do it on a website and database they run," David Gerard, author of Attack of the 50 Foot Blockchain: Bitcoin, Blockchain, Ethereum & Smart Contracts, told the BBC.

"It isn't like Bitcoin that aren't under anybody's control - it's a centrally controlled thing that sounds vaguely like crypto-currency."

JP Morgan says that it is trialling crypto-currency and blockchain in order to speed up payment transfers, as well as reducing clients' counterparty and settlement risk, and decreasing capital requirements.

However, Mr Gerard is sceptical and does not believe that the bank needs the technology to speed up transactions.

What about regulators?

JP Morgan's Umar Farooq told the BBC that JP Morgan is using blockchain because of the improvements in speeds and security that the technology offers.

Because of the privacy that blockchain enables, the bank envisions having a network whereby clients, such as large banks, can move coins between themselves on the network, and JP Morgan does not see these transactions.

However, the bank stressed that all information required by regulators will continue to be tracked.

Clients will only be able to use the blockchain network if they have been approved by regulators and have passed money laundering checks.

"There is a possibility in the future of a blockchain that is private, except from the regulator," said Mr Farooq.

"There are various ways to make the regulatory regimes across the world stronger over time."--BBC

Brexit 'monster' urges Dutch to prepare

The Dutch government sees Brexit not as the elephant in the room but as a giant Muppet-style monster lying on a desk.

That is the picture tweeted by Foreign Minister Stef Blok, with the warning: "make sure Brexit doesn't sit - or lie - in your way".

There is a link to an official website where Dutch firms can see the potential impact of Brexit on their business.

The Netherlands is among the UK's top trading partners, and Dutch officials say Brexit could deliver a major blow.

There is much speculation that the UK could leave the EU without a deal on 29 March - seen by many as the worst-case scenario.

Dutch hospitals have warned that a sudden UK exit could cause shortages of medicines and other medical supplies.

But the furry monster is an effort to lift some of that doom-and-gloom, at least for the Dutch.

The monster is already a hit on Twitter.

The government is also running radio ads to warn Dutch businesses about the looming impact of Brexit.

Dutch Prime Minister Mark Rutte said Britain was a "diminished" country since its vote for Brexit in 2016 and he warned that a no-deal exit risked "insurmountable" and "devastating" consequences for the UK economy.

In a Financial Times interview he voiced alarm that "the ball is rolling towards the Dover cliff and we are shouting 'Stop the ball from rolling any further' but nobody is doing anything at the moment, at least not on the UK side".

The Dutch government says there has already been some benefit to the Netherlands from Brexit, however.

It says €291m (£256m; $328m) in investment came to the Netherlands last year and 42 firms moved there - allegedly as a direct effect of Brexit.

The EU medicines agency has left London for Amsterdam, because of Brexit. The Dutch have also persuaded Japanese electronic giants Sony and Panasonic to locate their European HQs in the Netherlands.

In the two years since the Brexit vote the Dutch have been quietly, conscientiously adapting. So much so that one of the nations predicted to be hardest hit by a no-deal Brexit might just be turning the tide in its favour.

These two sea-faring nations share extensive trade links, political ties and cultural similarities. Which is perhaps why the Dutch feel qualified to pass judgement - being blunt is a source of national pride and ingrained in the Dutch psyche.

In the Netherlands you can always be sure of a stranger reminding you to follow the rules.

In the last 24 hours I've been told to switch on my bike lights (it was 08:30 and well after sunrise), take off my coat in a cafe (I'd just arrived) and put my bike in a designated stand rather than against a lamp post.

I was recently told this intrusive behaviour is rooted in a time when there was no state infrastructure so the people depended on policing each other.

Anyone tempted to tell the Dutch to mind their own business when it comes to Brexit should realise that's exactly what they're doing.

Presenting Brexit as a giant blue "Muppet" not only draws internet traffic - it also serves as a reminder that, for those who want to keep a foothold in the EU, the Netherlands is wide open for business. The message is: it's a strong, stable nation just next door, where English is widely spoken.--BBC

Name checks on payments face delay

A system making a recipient's name as important as the bank account number and sort code when payments are made could be delayed by up to 18 months.

The Confirmation of Payee system means anyone making a payment will be alerted if the name does not match the account.

It is designed to prevent millions of pounds worth of fraud and regulators wanted it to start in July.

But UK Finance, which represents banks, said the system would not be ready until "some time next year".

The Payment Systems Regulator, which will ultimately set the deadline, said it wanted the new rules to be in place as soon as possible, but only when they could be effective.

At present, anyone making a payment adds the intended recipient's name, but it is ignored by the bank. Only the account number and sort code need to match for the payment to be successful, so fraudsters pose as someone legitimate to trick victims into paying them money.

How Confirmation of Payee will work

When setting up a new payment, or amending an existing one, banks will be able to check the name on the account of the person or organisation you are paying.

If you use the correct account name, you will receive confirmation that the details match, so you can proceed with the payment

If you use a similar name to the account holder, you will be provided with the actual name of the account holder to check. You can update the details and try again, or contact the intended recipient to check the details

If you enter the wrong name for the account holder, you will be told the details do not match and advised to contact the person or organisation you are trying to pay.

The aim of Confirmation of Payee is to cut down on so-called authorised push payment (APP) scams, in which people are conned into sending money to another account.

One APP victim was Angelene Bungay, of Shrewsbury, who was duped into paying £13,000 to someone posing as the builder carrying out her loft conversion. She was not refunded by her bank. Banks typically refund only about a fifth of the money that goes missing, pointing to legislation that says customers may be liable if they authorise the payment and are negligent.

Hundreds of millions of pounds have been lost in this kind of scam, with some victims losing life-changing sums.

During evidence to the Commons' Treasury Committee, Stephen Jones, of UK Finance, said for the first time that it was the intention that victims would be reimbursed when neither the bank or the victim were to blame for the fraud. This could eventually be funded from insurance, although other options are being considered.

Start date unconfirmed

He also said that Confirmation of Payee would not be ready by July, which was the regulator's suggestion during consultation, but some time next year. He said it had not dropped down the list of banks' priorities, but was a complex change in their IT and processing systems.

"This is a big change at a time of a lot of change," he told the committee.

A spokesman for the regulator, the PSR, said: "We want to see Confirmation of Payee brought in as soon as possible and also make sure that when it is introduced, it is an effective way to stop this crime taking place.

"As it stands, we are still working through the responses to our consultation and so no decisions on timing have been made."

Consumer groups have previously accused banks of dragging their heels on introducing the system.

Gareth Shaw, from Which?, said: "Any extended delay to this vital measure would be a huge betrayal of bank customers and is likely to result in millions of pounds being lost unnecessarily to bank transfer scams, with devastating consequences for the victims."

How to protect yourself against fraud

Banking trade body UK Finance offers the following advice:

*         Never disclose security details, such as your PIN or full banking password

*         Don't assume an email, text or phone call is authentic

*         Don't be rushed - a genuine organisation won't mind waiting

*         Listen to your instincts - you know if something doesn't feel right

*         Stay in control - don't panic and make a decision you'll regret--BBC

INVESTORS DIARY 2019

Company

Event

Venue

Date & Time

Ariston

AGM

Royal Harare Golf Club

19 Feb 2019 - 2:30pm

Zimbabwe

Robert Mugabe National Youth Day

Zimbabwe

21 Feb 2019

Powerspeed

AGM

Boardroom, Gate 1, Powerspeed Complex, Graniteside

28 Feb 2019 - 11am

Zimbabwe 

Independence Day

Zimbabwe

18 Apr 2019 

Good Friday

19 Apr 2019

Easter Saturday

20 Apr 2019

Easter Sunday

21 Apr 2019

Easter Monday

22 Apr 2019

Workers Day

01 May  2019

Africa Day

25 May 2019

 <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 subscribe for any securities. The information contained in this report has 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 contents or otherwise arising in connection therewith. Recipients of this report shall be solely responsible for making their own independent 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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