Major International Business Headlines Brief::: 31 January 2019

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Major International Business Headlines Brief::: 31 January 2019

 


 

 


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

 


 

 


 

 

*  South African miners want restructuring of power firm Eskom

*  Kenya bourse aims to launch derivatives market in first half 2019

*  Fed puts future rate rises on hold as pledges patience

*  China's factory activity shrinks as slowdown worries rise

*  Facebook users continue to grow despite privacy scandals

*  South African rand steady before Fed's policy decision, stocks down

*  Tesla reports profit as issues stabilise

*  South Africa's deputy finance minister denies corruption allegations

*  How has business been affected by Brexit so far?

*  MPs say fast fashion brands inaction on ethics is shocking

*  Foxconn reconsiders Wisconsin factory plans

*  S.Africa's Absa seeks new blood after decade under Ramos

*  Brexit: Car investment halves as industry hits 'red alert'

*  Tonnes of chicken nuggets recalled in US

*  Barclays shifts billions of pounds to Dublin because of Brexit

 

 


 <mailto:info at bulls.co.zw> 

 


 

                                      

South African miners want restructuring of power firm Eskom

JOHANNESBURG (Reuters) - South African miners support a restructuring of struggling state power firm Eskom to boost competition in the electricity supply industry, an industry body said on Wednesday, warning that tariff hikes alone would not solve Eskom’s problems.

 

Top government officials will discuss whether to split Eskom into generation, transmission and distribution units at a cabinet meeting starting on Wednesday as part of efforts to rescue the company from financial crisis.

 

The mining and smelting industry is one of Eskom’s top customers, accounting for around 30 percent of electricity demand in Africa’s most industrialised economy.

 

“Most countries we compete against have electricity supply industries where generation is competitive, there is a state transmission company and some competition in distribution,” Roger Baxter, chief executive of South Africa’s Minerals Council, an industry lobby group, said.

 

“We need Eskom to be made into a much more efficient, cost-effective organisation.”

 

The Minerals Council, which represents firms including Sibanye-Stillwater and Exxaro, says average annual power price increases of 15.5 percent between 2006 and 2017 reduced investment in the mining sector by a cumulative 103 billion rand ($8 billion).

 

It says Eskom’s request for a further 15 percent increase in electricity tariffs in each of the next three years - if granted by the country’s energy regulator Nersa - would cripple an industry already in decline.

 

More than 80 percent of gold production would become marginal or loss-making, with around 75 percent of platinum group metals production marginal or unprofitable by the end of the three-year period, Baxter said.

 

Thousands of mining jobs could be lost, he added.

 

Eskom has argued that its tariff hike request to Nersa could help shore up its finances.

 

Deon Joubert, Eskom’s corporate specialist for finance, told consumers at a public hearing on the proposed hikes on Monday that the utility’s debt had increased as its tariffs had failed to keep pace with its spending on new power stations.

 

“Eskom is cognisant of the potential impact of the increase in various sectors, but it finds itself in a very difficult financial position,” Joubert said.

 

Public Enterprises Minister Pravin Gordhan, who oversees Eskom, said on Tuesday that South Africa needed to act fast on Eskom because of the extent of its financial difficulties.

 

Eskom supplies more than 90 percent of South Africa’s power but is drowning in more than 400 billion rand of debt after a decade of steep financial decline.

 

($1 = 13.5859 rand)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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South African rand steady before Fed's policy decision, stocks down

JOHANNESBURG (Reuters) - South Africa’s rand steadied against the dollar on Wednesday as investors awaited the Federal Reserve’s policy decision and U.S.-China trade talks later in the day.

 

Stocks slipped, with Shoprite, which runs South Africa’s biggest supermarket chain, pulling the bourse down.

 

At 1510 GMT the rand was trading at 13.6200 per dollar, little changed from a close of 13.6000 on Tuesday.

 

Markets expect Fed officials will reinforce their recent dovish stance given a stalemate on global trade, signs of a slowdown in the U.S. economy, and waning business and consumer confidence.

 

“It will be interesting to see whether the Fed’s assessment of U.S. growth has changed, with typical recessionary indicators such as persistent stock losses and widening corporate credit spreads levelling off since December,” RMB analyst Nema Ramkhelawan-Bhana said in a note.

 

“But, fourth-quarter high-frequency data would have been sparse due to the Federal shutdown, creating an added air of uncertainty to the committee’s growth outlook. This, combined with softer global data, should continue to justify the Fed’s cautious stance, which is positive for risk assets.”

 

A dovish Fed and signs the world’s no. 1 economy is slowing, have spurred demand for emerging market assets this month and has seen the rand outperform its peers - bar the Russian rouble.

 

Investors focus was also on Chinese Vice Premier Liu He’s visit to Washington on Wednesday and Thursday for a round of trade negotiations with the United States.

 

In fixed income, the yield on the benchmark government paper due in 2026 dropped 2 basis point to 8.74 percent.

 

On the bourse, Shoprite issued a profit warning after market close on Tuesday, prompting its shares to plunge by 14.2 percent on Wednesday and dragging on the stocks of fellow retailers Truworths, Woolworths and The Foschini Group. The retailers, alongside Spar Group, filled the bottom of the Johannesburg Stock Exchange’s Top-40 index. A series of South African retailers have reported poor performance over the last few months, with the country’s consumers reining in spending in a lagging economy.

 

The blue-chip index overall was down 0.47 percent to 47,972 points and the broader all-share index was also down by 0.47 percent to 54,131 points.

 

 

 

South Africa's deputy finance minister denies corruption allegations

JOHANNESBURG (Reuters) - South Africa’s deputy minister of finance and chairman of the state-owned Public Investment Corporation (PIC), Mondli Gungubele, said on Wednesday he had done nothing wrong after a whistleblower made new graft allegations at the pension fund.

 

The PIC, which has nearly 2 trillion rand ($147 billion) of civil servants’ pensions under its custody and is Africa’s biggest pension fund, said it would conduct an investigation after a whistleblower made the accusations in an email to the PIC’s board.

 

The state-owned pension fund did not disclose the new allegations, which come as a judicial inquiry into the firm continued to hear evidence from its staff members.

 

It said the PIC’s acting CEO, Matshepo More, and two board members were implicated, but did not name them. Reuters has not seen the email.

 

Gungubele later issued a statement saying he was one of those facing allegations, and welcoming the opportunity to clear his name.

 

“I am confident that I have done nothing wrong,” he said.

 

Matshepo More, the acting CEO, could not be reached for comment.

 

The third board member named in the anonymous whistleblower’s email is Sibusisiwe Zulu, the PIC’s deputy chairman Xolani Mkhwanazi told Reuters.

 

Zulu could not be reached for comment.

 

The ongoing inquiry at the PIC was set up after a small opposition party alleged the PIC’s former chief executive Dan Matjila had misused funds and made careless investment decisions.

 

Matjila, who stepped down in November last year, has denied any wrongdoing.

 

Last week, the PIC said in a statement it had suspended its executive head of listed investments and an assistant portfolio manager over a 2017 investment in local firm Ayo Technology Solutions, which is listed on the Johannesburg Stock Exchange (JSE).

 

The fund said the two were suspended for flouting governance rules in relation to the investment.

 

The suspensions were followed by three resignations from Ayo Technology Solutions’ board.

 

Reuters has not been able to reach the suspended PIC officials or the Ayo executives for comment.

 

The technology firm’s share price is down more than 50 percent since it listed on the JSE in 2017.

 

Matjila had said last year that the Ayo Technology Solutions deal was a “great investment” that would take time to pay off.

 

The PIC is the biggest investor in South Africa’s economy, holding a large volume of bonds issued by government and state-owned firms, as well as stakes in blue-chip companies such as miner Anglo American, lender Absa and telecoms giant MTN Group.

 

($1 = 13.5961 rand)

 

 

 

S.Africa's Absa seeks new blood after decade under Ramos

JOHANNESBURG (Reuters) - South African lender Absa plans to appoint an external candidate as its new CEO following the sudden departure of its boss of ten years, Maria Ramos, with analysts and investors hoping they will breathe new life into the lagging bank.

 

Absa’s Tuesday announcement that Ramos, one of global banking’s few female CEOs, would retire at the end of February took some analysts and investors by surprise and sent the bank’s shares up by 4 percent.

 

Absa - South Africa’s third-biggest lender and a prominent brand across southern and eastern Africa - said Ramos will be replaced in the interim by René van Wyk, a non-executive director on its board.

 

However her permanent successor would come from outside the bank, Absa Chairwoman Wendy Lucas-Bull told Reuters by phone, adding that the search had been underway for some time.

 

“That is why we are comfortable we can go to market by the time we release our half-year results in terms of the name of the individual, and then the individual will be clear to start by the start of the next financial year,” she said.

 

Lucas-Bull said Ramos had wanted to step down in 2016, but agreed to stay on after former parent Britain’s Barclays said it wanted to sell down its stake, leaving Absa to chart its own course.

 

Ramos stayed to see the bank through the separation and return of the Absa brand, Lucas-Bull continued, as well as set out a new strategy that has seen it set aggressive targets, including an aim to enter Nigeria as it seeks to double its share of the African market.

 

Absa shares were up 4.2 percent at 182.9 rand by 1336 GMT, with traders saying that a new CEO could spur growth by bringing a new perspective.

 

Lucas-Bull said with the separation from Barclays on track and the final elements of the strategy announced in December, now was a good time for Ramos to depart ahead of her reaching retirement age this year.

 

Jan Meintjes, a portfolio manager at Absa investor Denker Capital, said he was pleased the bank, which had been losing market share and top talent, was seeking an external candidate.

 

“More of the same thinking is probably going to get you more of the same results,” he said, adding he wants the new boss to focus on getting the basics right and make sure Absa’s products and services are competitive.

 

 

Kenya bourse aims to launch derivatives market in first half 2019

NAIROBI (Reuters) - The Nairobi stock exchange aims to launch a derivatives market in the first half of 2019 after long delays and wants to list at least two new firms by the end of the year, executives at the Kenyan bourse said on Wednesday.

 

Nairobi Securities Exchange, the main entry point for foreigners seeking to invest in East Africa, has worked on plans for a derivatives market for years but has previously said it was taking longer than expected to set up the infrastructure.

 

“The general idea is to launch within this half of the year,” said Terrence Adembesa, the exchange’s derivatives market director, adding tests had been completed and a final request for approval to start trading had been sent to the regulator.

 

He did not give details of contracts to be traded, but the exchange said in the past it would start with stock index futures and would add single stock and currency futures later.

 

Exchange executives have said launching derivatives trading would boost liquidity on the bourse, which has 65 listed firms. It will become the second exchange in Sub-Saharan Africa to take such an initiative, after Johannesburg.

 

Bahati Morara, NSE’s business development director who was speaking at the same news conference, said the bourse aimed to list two new companies, supermarket chain Tuskys and state-run National Oil Corporation of Kenya (NOCK), by the end of 2019.

 

The government announced its intention to list NOCK in September 2017 to raise $1 billion in a dual listing on the Nairobi bourse and the London Stock Exchange (LSE) by early 2019.

 

“We are looking at a crosslisting this year,” Morara said, adding that the Nairobi bourse had been in talks with the LSE on an initial public offering (IPO) for NOCK since last year.

 

The bourse’s main NSE20 Share Index fell 24 percent in 2018 and has climb about 4 percent since the start of 2019.

 

 

 

Fed puts future rate rises on hold as pledges patience

The Federal Reserve has indicated it won't raise interest rates anytime soon, marking an abrupt turnaround from earlier statements that suggested it would gradually increase rates.

 

The US central bank pledged to be "patient" citing muted inflation and recent economic "cross currents".

 

It made its statement after the Fed's January meeting, where it held interest rates unchanged, as expected.

 

Markets, which have been worried about higher rates, jumped on the news.

 

The Dow Jones Industrial Average ended the day more than 1.75% higher, the S&P 500 gained 1.56% and the Nasdaq increased 2.2%.

 

'Uncertainties'

The Fed has been slowly raising rates since 2015, arguing that a stronger US economy meant the ultra-low rates put in place during the financial crisis were no longer necessary.

 

But Federal Reserve Chair Jerome "Jay" Powell said changes in recent months warranted a more cautious approach.

 

"We see these uncertainties," he said at a press conference in Washington, pointing to an economic slowdown in Europe and China, the recent government shutdown in the US and the possibility of a hard Brexit.

 

"We can afford to wait."

 

No change in policy from the Fed, but there are some revealing changes to the statement compared with what they said in December.

 

The suggestion that further increases in interest rates will be consistent with achieving their economic objectives has gone, as has the view that risks to the economic outlook are balanced.

 

Inflation pressures are now seen as muted and the Fed says it will be patient in making decisions about interest rates.

 

The changes all point in the same direction: a central bank that is more wary about the economic outlook in terms of growth and is less worried about the risks of significantly higher inflation.

 

That's not to say the Fed is anywhere near suggesting that a recession is an imminent danger.

 

It still sees sustained growth as the most likely path for the economy.

 

But there are what the Fed Chairman Jerome Powell called cross currents, such as the trade tension with China, which suggest there are increased risks of a less favourable outcome.

 

However, Mr Powell demurred when asked if this marked an end to rate rises.

 

"The length of this patient period is going to depend entirely on incoming data and its implications for the outlook," he said.

 

Several analysts said they thought the Fed would raise rates again this year, assuming the US economy remains healthy.

 

"This reads more like a pause than a strong signal that they believe that they are the end of the hiking cycle," said Fitch Ratings chief economist Brian Coulton.

 

"Barring a very significant global downturn, we still see further rate increases later this year."

 

The US central bank also provided more detail about its plans to shrink its portfolio of bonds and mortgage-backed securities.

 

The Fed said it would retain an "ample" supply of reserves and could adjust the pace of the sell-off if the economy deteriorates.

 

The statement followed investor demand for greater clarity.

 

 

 

China's factory activity shrinks as slowdown worries rise

Chinese factory activity contracted for a second straight month in January, the official Purchasing Managers Index (PMI) showed.

 

The index ticked up to 49.5, but remained below the 50-point level that separates growth from contraction.

 

China reported its weakest economic expansion in 28 years in 2018, and growth is expected to slow further.

 

Already, a number of multinationals have said sluggish growth in China has affected their bottom line.

 

The manufacturing data was up slightly from the 49.4 level recorded in December.

 

Marcel Thieliant, economist at Capital Economics, said while the PMI didn't weaken any further in January, "it still suggests that the economy lost momentum at the start of the year".

 

Other data, such as consumer sentiment and retail sales figures, also point to weakening demand in the world's second largest economy.

 

Several international companies have warned on China's slowdown, including Apple.

 

The tech giant blamed a 5% fall in revenues partly on China.

 

Shares of industrial equipment giant Caterpillar took a beating earlier this week, after the company reported its sales slipped 4%, largely due to slow sales in China.

 

Why are the Chinese buying fewer cars?

China's trade figures should worry us all

Chipmaker Nvidia also reported softer sales due to a sluggish Chinese market.

 

3M, which makes products from adhesive tapes to air filters, also said weak customer demand in China affected its bottom line.

 

China has been attempting to reform its economy to rely more on domestic consumption instead of exports and investment to fuel growth.

 

The US-China trade war is also creating economic uncertainty.

 

The latest figures come as officials from both sides meet in Washington to try ease trade tensions.

 

If the two sides cannot reach an agreement by 1 March, the US has said it will increase the tariff rate from 10% to 25% on Chinese goods worth an estimated $200bn (£154.4bn).--BBC

 

 

Facebook users continue to grow despite privacy scandals

Facebook users have continued to rise despite a series of data privacy scandals and criticism over its attempt to stem toxic content.

 

The social media giant said the number of people who logged into its site at least once a month jumped 9% last year to 2.32 billion people.

 

Fears the firm's scandals could put off advertisers also proved unfounded with annual revenues up 30% on last year.

 

The rise came despite campaigns which urged people to shun the tech giant.

 

Founder Mark Zuckerberg said the firm had "fundamentally changed how we run the company to focus on the biggest social issues".

 

The strong financial performance comes amid continuing concerns over how the social media firm handles users' personal data and privacy after the Cambridge Analytica data sharing scandal and fears the network has been used as a political tool.

 

Facebook paid teens to mine device data

Facebook 'less popular with UK children'

The company's shares have lost almost a third of their value since July when it warned about slowing revenue growth and they remain near a two-year low.

 

But they jumped over 9% in after-hours trading after profit and revenue beat analyst forecasts.

 

Facebook's total profit for 2018 was $22.1bn (£16.9bn), up 39% on 2017.

 

User growth was particularly strong in India, Indonesia and the Philippines, but flat in the US and Canada.

 

The mind boggles. In 2018 Facebook saw the Cambridge Analytica scandal, political manipulation, fake news, data breaches and accusations of deeply unethical behaviour.

 

Despite this, profits are up by almost 40%. Facebook isn't just surviving, it's thriving.

 

In the face of severe turbulence, Mark Zuckerberg's company has proven to be resilient.

 

But while users appear to be turning a blind eye, the same won't be said for regulators - Facebook knows huge fines are likely coming its way.

 

The question is how damaging those fines will be, and what other measures might be put in place that might clip the wings of a company that many lawmakers feel is too powerful.

 

George Salmon, analyst at Hargreaves Lansdown, said Facebook's revenue growth in the final three months of the year was its weakest since the firm listed on the Nasdaq stock exchange in 2012, but said the figures were still "reassuring".

 

"Only time will tell if Mark Zuckerberg's ambitious plans to revolutionise Facebook pay off, but these results will go a long way towards regaining the trust of Wall Street - analysts had been jittery after a tumultuous 2018 which included the trials and tribulations of the Cambridge Analytica scandal and a reset on strategy," he added.--BBC

 

 

 

Tesla reports profit as issues stabilise

Tesla made a profit of $139.5m (£106.4m) in the three months to 31 December - avoiding a loss for a second quarter in a row.

 

While lower than expected, the gain still marked an improvement for the electric car-maker, which has routinely reported shortfalls in recent years.

 

Tesla credited strong demand for its Model 3, manufacturing improvements and recent cost cuts for the turnaround.

 

It forecast strong growth, as Model 3 sales start in Europe and China.

 

However it warned investors that deliveries may slow in coming months, due in part to the time it takes to ship vehicles overseas.

 

"That's our biggest challenge," Tesla chief executive Elon Musk said. "It's not demand. It's how do we get the cars there fast enough."

 

That challenge is especially acute in the case of China, a major market for electric vehicles, which is in the middle of high-stakes trade talks with the US.

 

Should the two sides fail to reach a deal, it could mean higher tariffs on US-made cars.

 

"We don't know what's going to happen... so it's very important to get those cars there as soon as possible," Mr Musk said.

 

'Open the market'

Tesla said it expected to deliver 360,000 to 400,000 vehicles in 2019 - growth of approximately 45% to 65% compared to 2018.

 

Getting its new factory in China up and running by the end of the year is the biggest wildcard for that outlook, Mr Musk said.

 

Elon Musk breaks ground on first Tesla factory outside US

China opens car market after US tensions

China's Tencent buys 5% stake in Tesla

On a call with financial analysts, Mr Musk thanked the Chinese government for granting the permission for the plant, which he said was the first in the country that is wholly owned by a foreign company.

 

He said he believed the move was "symbolic of them wanting to open the market."

 

Mr Musk also announced the firm's chief financial officer Deepak Ahuja was retiring, but said he would continue to serve as a "senior adviser" for "probably years to come."

 

The numbers

Tesla was under intense pressure last year, as it spent rapidly to improve production and get its latest car into the hands of customers.

 

The firm said those manufacturing issues have now "stabilised".

 

In the most recent quarter, Tesla earned $7.2bn in revenues, primarily from car sales, more than double the same period in 2017.

 

It also reduced its operating expenses by 7% from the quarter before, to about $1bn, roughly the same as in 2017.

 

The decrease follows the announcement of thousands of job cuts in recent months, including about 3,000 in January.

 

Shares dropped by more than 2% in after-hours trading in New York.--BBC

 

 

 

How has business been affected by Brexit so far?

With two months to go until the UK is due to leave the EU, how are firms and the UK economy faring?

 

The economy's "resilience through the turbulence of the Brexit process has been particularly noteworthy", according to chancellor Philip Hammond.

 

But some businesses claim to have been put under unprecedented pressure.

 

What is going on?

 

It's impossible to put absolute numbers on how jobs, output and investment have been impacted so far.

 

No one knows how these will have fared had the outcome to the referendum in 2016 been different.

 

Other factors have influenced the business environment - not least slower growth in the likes of China and Europe

 

But there is a range of evidence that can give us an idea of how UK companies are faring.

 

Have companies cut or moved jobs?

On the face of it: no.

 

The number of people employed is at an all-time high. But there's a lot going on under the surface:

 

Banks' contingency plans mean setting up alternative bases in the likes of Frankfurt, Paris or Dublin. Individual banks are coy about revealing too much.

 

But reports about banks such as Morgan Stanley, Barclays and Bank of America moving, or creating, hundreds rather than thousands of jobs at those sites suggest the total affected in the City is much smaller than the 65,000 or so predicted by some immediately after the referendum.

 

London's Lord Mayor has said that the total by 29 March is likely to be below 13,000.

 

What we don't know is if jobs created in European cities such as Paris and Frankfurt are at the expense of potential ones here - or the final implications of the future trading relationship with the EU, whenever that is agreed.

 

While some - including JLR and Ford - have cited Brexit when cutting jobs - it has been a contributing rather than a deciding factor.

 

Car companies are facing a seismic shock in the face of slowing global demand, oversupply and the shift away from diesel.

 

Barclays in billions of pounds Brexit move

Firms 'may speed up no-deal Brexit plans'

Brexit: What could happen next?

No-deal Brexit 'to leave shelves empty'

In advance of departure, it is rare for firms to blame Brexit alone for job cuts. Chef and restaurant-owner Jamie Oliver faced derision for doing so within a few months of the referendum, with critics instead blaming his business model

 

As the uncertainty continues, companies may be putting hiring plans on hold - not least as they ramp up spending on no-deal contingency plans. How that impacts overall employment won't be known for a while.

 

Has Brexit created jobs?

There has probably never been a better time to be a trade negotiator - or a business adviser.

 

Overall employment has continued to rise to record levels since the referendum in June 2016.

 

In total, £95m worth of contracts were awarded last year to consultancy firms to advise the public sector on Brexit.

 

And 20,000 more civil servants have been employed since the referendum, in a reversal to earlier trends.

 

They are concentrated in the departments most affected by Brexit.

 

And that's just the public sector.

 

Some companies continue to hire apace for other reasons. Telecoms giant Openreach, for example, has said that it will hire a further 16,000 engineers to support its rollout of full fibre broadband.

 

Have companies put plans on hold?

Business investment is stagnant and more than 10% lower than official forecasts had predicted prior to the referendum.

 

A lifting of the uncertainty could persuade firms to start spending again - a "deal dividend".

 

But investment has been relatively sluggish since the financial crisis.

 

Firms instead opted to hang on to workers, as they are relatively cheap. They may be continuing this strategy - which could help explain why job creation has remained so resilient.

 

And as businesses enact contingency plans, money earmarked for investment may have been diverted.

 

Drugmaker Astra Zeneca has spent £40m building extra testing facilities as it increases its drugs stockpile.

 

Some are forging ahead with plans for a variety of reasons.

 

Sony is moving its electronics HQ to the Netherlands, to pre-empt any customs problems.

 

James Dyson claims he's moving his company's base to Singapore to be closer to its fastest growing markets.

 

But luxury brand Chanel cited the same reason for moving its global business functions to London.

 

Majestic Wine has said it will stockpile more than 1m extra bottles of wine from France, Spain and Italy

Drugmakers aren't the only ones stockpiling.

 

Associated British Foods, the company behind Twinings tea and Ryvita, has bought up extra machinery and packaging to prevent disruption to supply chains.

 

Mondelez, the makers of Cadburys, is stocking up on ingredients and the finished article.

 

With Majestic Wine buying an extra £8m in drinks, and Nestle investing in more coffee, there is a reduced risk of us having to forego some of life's luxuries.

 

Of course, these extra stocks may not be needed - and so the effort and money that's gone on organising and storing them will have been wasted.

 

But at this point, many companies feel they have no choice.

 

The UK's exit from the EU may be two months away but for some, Brexit has in effect already happened.

 

Orders are often put in months in advance.

 

Those for British malting barley from the EU have dried up.

 

Barley - which is the UK's second largest arable export - could attract tariffs of around 50% of the current market price.

 

It's not just food. At September's London Fashion Week, buyers were voicing concerns about placing orders for the spring that might face disruption.

 

Many of the impacts of the run up to Brexit, as far as business is concerned, are likely temporary - reflecting contingencies or uncertainty.

 

The overall impact on the economy will become a bit clearer when GDP figures are released in about a week.

 

And what follows next will depend on Westminster's actions.

 

The impact of those, in whatever direction, may dwarf what we've seen so far.--BBC

 

 

 

MPs say fast fashion brands inaction on ethics is shocking

Fashion retailers JD Sports, Sports Direct and Boohoo, are "failing to commit" to reducing their environmental and social impact, MPs say.

 

Amazon, TK Maxx and Missguided were also described by the Environmental Audit Committee (EAC) as being among the "least engaged" in sustainable fashion and labour market initiatives.

 

The EAC said it was "shocking" the firms were "failing to take action".

 

Boohoo said the report did not reflect its commitment to sustainability.

 

The findings are part of the EAC's inquiry into the sustainability of the fashion industry.

 

The inquiry was prompted by the popularity of "fast fashion... cheap clothing, with quick turnover that encourages repurchasing".

 

Disposable fashion has come under fire, not only for the amount that ends up in landfill, but also because it can release toxic chemicals in production and plastic fibres when it is washed.

 

MPs to investigate 'fast fashion' impact

'How do you justify selling a £2 T-shirt?'

Exploitation 'rife' in UK textile industry

Last summer the committee wrote to 16 fashion retailers asking what they were doing to cut the environmental and social impact of the clothes and shoes they sell.

 

Specific questions included what the brands were doing about using organic or sustainable cotton; limiting the discharge of hazardous chemicals and the re-use or recycling of unsold stock.

 

The interim report ranks brands according to how "engaged" they are in their commitment to sustainable fashion and labour market initiatives.

 

The "most engaged" were named as Asos, Marks & Spencer Tesco, Primark and Burberry.

 

All of them use organic or sustainable cotton and old materials and encourage customers to return old clothing.

 

The "moderately engaged" retailers were Next, Debenhams, Arcadia Group and Asda.

 

The EAC said each of them had taken "some steps" to address environmental sustainability issues.

 

All of them except Next run a return scheme for discarded clothes and all of them except Asda use organic cotton in some clothes.

 

Kurt Geiger was also approached but did not respond to requests for written evidence, the EAC said.

 

'Re-iterate commitment'

The retailers were also asked if they were members of the ACT (Action, Collaboration, Transformation) labour rights and living wage agreement and the SCAP (Sustainable Clothing Action Plan) to reduce their carbon, water and waste footprint.

 

With the exception of Burberry all the other "moderately engaged" and "most engaged" retailers participated in one or other or both of these schemes.

 

Of the six "least engaged" retailers none was a member of either of these initiatives,

 

In a statement, Boohoo said it wanted to "re-iterate its commitment to being involved in the ongoing discussion on the sustainability of fashion.

 

"This initial report does not fully reflect the policies and procedures and independent initiatives that we have in place, or the extent of our ongoing commitment in the area of sustainability."

 

JD Sports said "As a business, we participate in a number of ethical initiatives which fall outside the narrow list referred to in the Committee's report."

 

It added that most of the group's sales came from third party brands, including "two [Nike and Adidas] internationally recognised as industry leaders with regards to driving sustainability".

 

"Private label sales make up the rest of the Group's sales and there is an ongoing project to review options on improving the sustainability of our manufactured garments," it added.

 

Amazon declined to comment.

 

'Customers can choose'

EAC chair Mary Creagh said: "It's shocking to see that a group of major retailers are failing to take action to promote environmental sustainability and protect their workers.

 

"By publishing this information, customers can choose whether they want to spend money with a company that is doing little to protect the environment or promote proper wages for garment workers.

 

"We hope this motivates underperforming retailers to start taking responsibility for their workers and their environmental impact."

 

The committee concluded that the UK fashion industry's current business model was "clearly unsustainable, especially with a growing middle-class population and rising levels of consumption across the globe".

 

How did the fashion brands do?

"Least engaged": JD Sports, Sports Direct, Boohoo, Amazon, TK Maxx, Missguided

 

"Moderately engaged": Next, Debenhams, Arcadia Group, Asda.

 

"Most engaged": Asos, Marks & Spencer Tesco, Primark and Burberry.

 

Kurt Geiger did not respond to the EAC's requests

 

The committee said it intended to publish its final report in the coming weeks in which it will outline recommendations for government policies to "encourage a more transparent, fair and sustainable fashion system".

 

Francois Souchet of the Ellen MacArthur Foundation said the committee was right that the "fashion industry's current business model cannot work in the long term".

 

He said worldwide one truckload of clothing was landfilled or incinerated every second, while less than 1% of old clothing goes on to be used to make new clothes.

 

"We need a redesign for the fashion industry, so business models increase clothing's use, clothing is made from safe and renewable materials and old clothing is used to make new clothes."--BBC

 

 

Foxconn reconsiders Wisconsin factory plans

Foxconn, which raised hopes of a US manufacturing revival by announcing a new factory in Wisconsin, is now reconsidering its plans.

 

The Taiwanese manufacturing giant no longer expects to make liquid crystal display panels at the Wisconsin plant, a company official told Reuters.

 

It plans to hire mostly engineers and researchers not manufacturing workers.

 

The changes are a significant shift from the firm's plans announced at a White House ceremony in 2017.

 

At the time, US President Donald Trump claimed credit for landing the investment, which he said was a sign his policies were returning investment to the US.

 

The yet-to-be-built facility was the "eighth wonder of the world", he said at a groundbreaking ceremony last summer.

 

Foxconn, a major Apple supplier, had pledged to invest $10bn (£7.6bn) in the plant, which was expected to initially employ 3,000 people, with a potential for up to 13,000, mainly entry-level jobs.

 

New realities

In a statement on Wednesday, Foxconn cited a changed global marketplace, saying all of its projects are being "adjusted to meet these new realities."

 

"We remain committed to the Wisconsin Valley Science and Technology Park Project, the creation of 13,000 jobs, and to our long-term investment in Wisconsin. As we have previously noted, the global market environment that existed when the project was first announced has changed," the company said.

 

Trump takes credit for Foxconn's 'incredible investment'

US's Foxconn subsidies stir debate

Firms look to new factories as tariffs bites

The state of Wisconsin had agreed to support the project with controversial incentives worth more than $3bn.

 

Critics of those incentives had long said they did not think that Foxconn would deliver on its promises.

 

The firm has already fallen short of yearly hiring goals, preventing its receipt of tax credits last year.

 

Donald Trump called the Foxconn plant the "eighth wonder of the world" at its June 2018 groundbreaking

Louis Woo, special assistant to Foxconn boss Terry Gou, told Reuters that the firm was still evaluating options for Wisconsin - including creating a "technology hub" made up largely of research facilities for high-tech products aimed at health care, industrial.

 

But he said high labour costs in the US meant making advanced TV screens didn't make sense.

 

"In terms of TV, we have no place in the US," he told Reuters. "We can't compete."--BBC

 

 

 

Brexit: Car investment halves as industry hits 'red alert'

Investment in the UK car sector almost halved last year and output tumbled as Brexit fears put firms on "red alert", the industry's trade body said.

 

Inward investment fell 46.5% to £588.6m last year from £1.1bn in 2017, the Society of Motor Manufacturers and Traders (SMMT) says.

 

Production fell 9.1% to 1.52m vehicles, with output for the UK and for export falling 16.3% and 7.3% respectively.

 

Brexit uncertainty has "done enormous damage", said SMMT chief Mike Hawes.

 

But the impact so far on output, investment and jobs "is nothing compared with the permanent devastation caused by severing our frictionless trade links overnight, not just with the EU but with the many other global markets with which we currently trade freely," he added.

 

"With fewer than 60 days before we leave the EU and the risk of crashing out without a deal looking increasingly real, UK Automotive is on red alert," he said.

 

Politicians must do whatever it takes to avoid a no-deal, he said.

 

His gloomy prognosis follows strong warnings from other business groups on Wednesday. Carolyn Fairbairn, director-general of the CBI, said Tuesday's vote to renegotiate the UK's withdrawal deal "feels like a real throw of the dice".

 

Stephen Kelly, chief executive of Manufacturing Northern Ireland, told the BBC that firms there were "in despair and really confused" about what was going on.

 

Mr Hawes said that, despite the Commons vote on Tuesday evening, "nothing has changed".

 

Investment in the car industry comes in uneven lumps as old models are retired and new ones introduced over time. But even allowing for that, the plunge in new investment revealed this morning is stark.

 

In 2015, car manufacturers invested £2.5bn in the UK. Since then it has fallen ever year and in 2018 was just £589m.

 

Brexit uncertainty was not the only issue facing the sector - confusion over diesel policy, falling sales in China and production hold-ups due to new regulations also played a part.

 

But the SMMT was clear that Brexit presented what it calls "the most significant threat to the competitiveness of the UK automotive sector in a generation".

 

Manufacturing firms that rely on finely tuned pan-European supply chains have sounded the shrillest warnings about the dangers of a no-deal Brexit. These figures will do nothing to change that.

 

'Significant threat'

The 16.3% fall in production of cars destined for sale in the UK was driven by uncertainty over the future of diesels, regulatory changes, and falls in consumer and business sentiment, according to the SMMT.

 

However, exports to the EU fell by 9.6%, less steep than the fall in domestic production.

 

Overall, the EU still accounts for the vast majority of UK exports, 52.6% or 650,628 cars. Although exports to the US rose 5.3%, largely due to demand for premium models, Mr Hawes warned that this improvement could reverse if tariffs are imposed in post-Brexit tax changes.

 

Other key markets outside the EU would also be hurt, he said. Exports last year to Japan increased by 26% and by 23% to South Korea, but he pointed out that both countries were subject to preferential EU trade agreements.

 

Exports to China slumped 24.5%. Jaguar Land Rover (JLR), Britain's biggest carmaker, has already underlined the pain being felt from a sales slowdown in China.

 

JLR shutdown

Earlier this month JLR confirmed it was cutting 4,500 jobs, blaming Brexit uncertainty, a slump in diesel sales, and China's economic slowdown.

 

The carmaker also said it would extend its annual April shutdown by an extra week because of worries that just-in-time deliveries could be disrupted if Britain leaves the EU without a deal.

 

Mr Hawes pointed out that the fall in production last year followed a fall in 2017, which came after seven years of unprecedented growth as the sector emerged from recession.

 

"As a highly-integrated sector that has maximised the benefits of the European single market and customs union, a 'no-deal' Brexit is the most significant threat to the competitiveness of the UK automotive sector in a generation," he said.--BBC

 

 

 

Tonnes of chicken nuggets recalled in US

Tyson Foods, one of America's biggest poultry companies, has recalled a batch of its chicken nuggets after customers found pieces of blue rubber inside.

 

The firm said it would recall more than 36,000lbs (16,300kg) of chicken nuggets "out of an abundance of caution".

 

Safety officials said they are concerned that some potentially contaminated products may remain stashed inside households' freezers.

 

No injuries or adverse reactions have been reported, officials said.

 

However, the Food Safety and Inspection Service said urged buyers to discard the nuggets or return them.

 

The recall concerns 5lb bags of white meat nuggets coated in panko bread crumbs. The products, which had a "best if used by" date of 26 November 2019, were shipped across the US.

 

"Consumers who have purchased these products are urged not to consume them. These products should be thrown away or returned to the place of purchase," it said.

 

In June, Tyson issued a recall of about 3,100lb of frozen breaded chicken products. That recall was triggered by concerns that the nuggets were contaminated with plastic.--BBC

 

 

 

Barclays shifts billions of pounds to Dublin because of Brexit

Barclays is moving €190bn (£166bn) of assets to Dublin because it "cannot wait any longer" to implement its Brexit contingency plan.

 

The High Court, which has approved the move, says the move involves 5,000 clients. However, few jobs in London are expected to be affected.

 

The business amounts to around 15% of the bank's £1.2 trillion in total assets and was previously conducted in the UK through branches across the EU.

 

The plans will be in place by 29 March.

 

The bank's Dublin operation is expected to double in size to 300 people as a result of the business being channelled though the Irish capital.

 

Barclays in talks to expand Dublin office post-Brexit

 

"As we announced in 2017, Barclays will use our existing licensed EU-based bank subsidiary to continue to serve our clients within the EU beyond 29 March 2019, regardless of the outcome of Brexit," the bank said.

 

"Our preparations are well-advanced and we expect to be fully operational by 29 March 2019," it added.

 

The bank had to ask the High Court for approval to transfer the business which took place in branches in Germany, France, Spain, Italy, the Netherlands, Portugal and Sweden for corporate banking, investment banking and some wealthy private clients.

 

The judgement from Mr Justice Snowden said: "Due to the continuing uncertainty over whether there might be a no-deal Brexit, the Barclays group has determined that it cannot wait any longer to implement the scheme".

 

The scheme is based on a "no-deal" Brexit, the judgement said. This envisages the parts of the bank's business which is affected losing their "passporting" rights which currently allow them to conduct investment services activities in the remaining 27 EU member states.

 

"The design of the scheme has been based upon an assumption that there will be no favourable outcome of the current political negotiations between the UK and the EU as regards passporting or the grant of equivalence status to the UK in respect of financial services," the judgement said.--BBC

 

 

 

 

 

 

 

 


 

 


 

INVESTORS DIARY 2019

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


TSL

finals and analysts briefing

28 Simon Mazorodze, Southerton

30 Jan 2019  - 3pm

 


Nampak

AGM

68 Birmingham Road, Southerton

06 Feb 2019 - 12pm

 


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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