Major International Business Headlines Brief::: 02 July 2019

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Major International Business Headlines Brief::: 02 July 2019

 


 

 


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

 


 

 


 

 

*  South Africa's Absa PMI rises in June

*  Glencore's Congo tragedy highlights security conundrum for miners

*  Ivory Coast to eliminate illegal cocoa output to control supply

*  Ethiopia's economy seen expanding at 9.2% in 2019/20 FY

*  Glencore's Congo tragedy highlights security conundrum for miners

*  South African rand stronger after U.S.-China trade ceasefire

*  CEO Collymore, who built Safaricom into $11 bln telco, dies of cancer

*  US shares hit record and gold drops as trade talk hopes rise

*  Chubb cuts coal insurance exposure because of climate change

*  The day the e-books stopped working

*  Neil Woodford's flagship equity income fund to stay locked

*  Brexit farm trial: 'I really like the work'

*  Japan resumes commercial whaling after 30 years

*  Tory leadership: Jeremy Hunt sets 30 September 'no-deal deadline'

 

 


 <mailto:info at bulls.co.zw> 

 


 

South Africa's Absa PMI rises in June

JOHANNESBURG (Reuters) - South Africa’s seasonally adjusted Absa Purchasing Managers’ Index (PMI) for June rose as business activity and new sales orders edged higher, the survey showed on Monday.

 

The index, which gauges manufacturing activity in Africa’s most industrialised economy, rose to 46.2 in June from 45.4 in May, remaining below the 50 mark that separates contraction from expansion.

 

“Both the business activity and new sales orders indices edged higher in June, but remained well below the neutral 50-point mark for a respective sixth and fifth consecutive month,” Absa said in a statement.

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

Glencore's Congo tragedy highlights security conundrum for miners

DAKAR/LIMA (Reuters) - The deaths of 43 illegal miners at a Glencore facility in Congo last week highlighted a growing challenge for mining companies struggling to secure sites from small-scale prospectors digging for cobalt, copper and other minerals.

 

Many mines span hundreds of square kilometers across rural terrains, a tantalizing prospect for illegal miners, also known as artisanal miners, who break into sites in search of metals, some of which end up in electric cars and other products.

 

But even as last Thursday’s tragedy ratcheted up pressure on companies to make changes to security and community outreach, industry consultants and analysts say the task will be difficult given the geographic constraints and economic challenges faced by the world’s estimated 40 million artisanal miners.

 

“If people do not have work or an industry, they rely on this activity,” said Patrick Hickey, a mining industry consultant who has worked at mines across Africa.

 

“Where you can fence off the mine site, you do. Where you can’t, you try to use security. But it is difficult.”

 

Thursday’s tragedy occurred in Democratic Republic of Congo’s Kamoto Copper Company (KCC) concession, which spans kilometers of flat terrain on the outskirts of Kolwezi in the southern part of the country. The mine is operated by Kamoto Copper Company (KCC), a joint venture between Glencore-controlled Katanga Mining Ltd and the state-owned Gecamines.

 

Only part of the perimeter, which abuts densely-populated residential areas, is protected by fencing, giving the local population easy access. Young men can often be seen just outside the mine carrying shovels and sacks brimming with freshly-mined ore to nearby trading depots dominated by Chinese buyers.

 

    Private contractors provide most of the security, but activists say they are often ineffective and easily bought off by the miners in exchange for ignoring trespassers.

 

About 2,000 illegal miners regularly access the site, Glencore said.

 

Congo’s military plans to deploy troops to the KCC site, as it did in late June when it sent hundreds of soldiers to protect the Tenke copper and cobalt mine, which is owned by China Molybdenum Co Ltd.

 

“Security is not a highly-paid profession, so if you can get kickbacks from turning a blind eye, it can make you money,” said Nicholas Garrett of RCS Global, a consultancy which audits mining supply chains.

 

In South Africa, there are an estimated 30,000 illegal miners providing one of the biggest sources of illicit gold on the continent, with an output of around 14 billion rand ($994.4 million) per year, according to ENACT, which conducts research into transnational organized crime.

 

    The illegal miners are known in Zulu as “zama-zamas,” which loosely translates as “those who try to get something from nothing.”

 

Sibanye-Stillwater, which spent millions upgrading its security infrastructure, found almost 1,400 zama-zamas in its Cooke gold mine during a 2017 security sweep.

 

    “We have been continually arresting and trying to control access to the mines, but it’s been difficult,” said Sibanye-Stillwater spokesman James Wellsted.

 

CONCESSIONS

    Governments and industry have been setting aside concessions for artisanal mining, but there are not nearly enough of those concessions to employ all the artisanal miners, many of whom continue to target larger deposits.

 

Miners operating in risky jurisdictions, as a result, employ a variety of measures - ranging from antagonistic to collaborative - to safeguard operations.

 

Such steps include the use of private security with military or police backgrounds; fences or other physical structures; regular border patrols; and even allowing artisanal miners access to certain areas of their operations, according to presentations from Barrick Gold Corp, Freeport-McMoRan Inc, Kinross Gold Corp and Newmont Goldcorp Corp.

 

Even still, artisanal miners slip through surveillance. In 2013, two were killed at Barrick’s Porgera mine in Papua New Guinea in a confrontation with police after a large crowd of illegal miners gathered at the mine, Barrick said at the time.

 

A spokeswoman for Barrick declined to comment on the company’s latest security measures.

 

‘SHORT-TERM SOLUTION’

 

Delphin Monga, provincial secretary of the UCDT union, which represents KCC employees, said police fired teargas a few months ago to try to chase off the diggers, but it was only a temporary deterrence.

 

    Asked whether deploying the army would be an effective deterrent, Monga said: “Maybe as a short-term solution. But the dissuasive measures taken by the police and army do not intimidate the diggers.”

 

Some human rights activists say that armed responses to artisanal miners only exacerbate tensions with locals and ignore the underlying problems, which include the failure of large-scale mines to meaningfully contribute to development gains for the impoverished communities.

 

Artisanal miners “are the world’s hidden suppliers, and they’re working in horrible conditions,” said Karen Hayes of Pact, an NGO working across Africa to bolster supply chain transparency. “We already buy their minerals, whether we recognize it or not.”

 

In South America, Fura Gems Inc says securing all of its rural land in Colombia would be virtually impossible, so the emerald miner allows access in some areas, though it has promised to close a network of illegal tunnels.

 

“A mining company can’t do the job police do,” said Luis Rivera, an executive with Gold Fields Ltd and president of the Institute of Mining Engineers of Peru.

 

($1 = 14.0787 rand)

 

 

 

 

Ivory Coast to eliminate illegal cocoa output to control supply

ABIDJAN (Reuters) - Ivory Coast plans to stamp out illegal cocoa production from national parks and forest reserves over the next five years to control output better and support a new floor price, officials from the government and its cocoa regulator told Reuters.

 

The plan will be announced this week at a meeting in Abidjan where officials from Ivory Coast and Ghana will discuss with the industry details of the strategy to establish the floor price, said three officials, who asked not to be named.

 

The world’s top two producers said last month they will fix a minimum price of $2,600 per tonne free-on-board that chocolate companies must pay from the 2020/21 season if they want to access their more than 60% share of global supply.

 

However, some industry players have warned the plan could over-stimulate production, particularly in Ivory Coast, leading to a global price crash.

 

“For us, it’s simple,” said one official with the Coffee and Cocoa Council (CCC), Ivory Coast’s regulator. “If we can’t control our cocoa production, it will be difficult to stick to and enforce the floor price, because a structural production surplus will drag prices down.”

 

The new measures - a legal framework for which is due to be approved by parliament soon - will include possible jail time for those caught growing cocoa inside forest reserves and national parks, the officials said.

 

Between 2000 and 2015, as cocoa output rose from 1.175 million tonnes to 1.8 million tonnes, nearly half of the protected forests managed by the Ivorian agency, SODEFOR - some 740,000 hectares - were destroyed through deforestation.

 

Around a quarter of Ivory Coast’s current annual production of over 2 million tonnes comes from protected land, the Ministry of Water and Forests estimates.

 

The government will also expel illegal farmers and destroy their plantations.

 

“The goal is that all this cocoa grown in the forest reserves and national parks will no longer be available. It must be destroyed. We’re talking 300,000 to 500,000 tonnes each season,” said a second CCC official.

 

He added that the plan was to eliminate illegally grown cocoa volumes over the next five years.

 

Two rounds of evictions, in 2013 and 2016, displaced tens of thousands of farmers and their families and were criticised by human rights groups for widespread abuses by government security forces.

 

The officials said the new strategy will allow for the gradual removal of illegal farmers in order to avoid a negative social impact.

 

Around 1.3 million people live illegally on SODEFOR managed land, the agency estimates.

 

 

 

Ethiopia's economy seen expanding at 9.2% in 2019/20 FY

ADDIS ABABA (Reuters) - Ethiopia’s economy is projected to expand at 9.2% in 2019/2020 fiscal year, up from a growth rate of 7.7% in previous year, according to the prime minister, Abiy Ahmed.

 

“The economy will grow by 9.2% for the coming financial year,” Abiy said while addressing parliament on Monday.

 

 

 

Glencore's Congo tragedy highlights security conundrum for miners

DAKAR/LIMA (Reuters) - The deaths of 43 illegal miners at a Glencore facility in Congo last week highlighted a growing challenge for mining companies struggling to secure sites from small-scale prospectors digging for cobalt, copper and other minerals.

 

Many mines span hundreds of square kilometers across rural terrains, a tantalizing prospect for illegal miners, also known as artisanal miners, who break into sites in search of metals, some of which end up in electric cars and other products.

 

But even as last Thursday’s tragedy ratcheted up pressure on companies to make changes to security and community outreach, industry consultants and analysts say the task will be difficult given the geographic constraints and economic challenges faced by the world’s estimated 40 million artisanal miners.

 

“If people do not have work or an industry, they rely on this activity,” said Patrick Hickey, a mining industry consultant who has worked at mines across Africa.

 

“Where you can fence off the mine site, you do. Where you can’t, you try to use security. But it is difficult.”

 

Thursday’s tragedy occurred in Democratic Republic of Congo’s Kamoto Copper Company (KCC) concession, which spans kilometers of flat terrain on the outskirts of Kolwezi in the southern part of the country. The mine is operated by Kamoto Copper Company (KCC), a joint venture between Glencore-controlled Katanga Mining Ltd and the state-owned Gecamines.

 

Only part of the perimeter, which abuts densely-populated residential areas, is protected by fencing, giving the local population easy access. Young men can often be seen just outside the mine carrying shovels and sacks brimming with freshly-mined ore to nearby trading depots dominated by Chinese buyers.

 

    Private contractors provide most of the security, but activists say they are often ineffective and easily bought off by the miners in exchange for ignoring trespassers.

 

About 2,000 illegal miners regularly access the site, Glencore said.

 

Congo’s military plans to deploy troops to the KCC site, as it did in late June when it sent hundreds of soldiers to protect the Tenke copper and cobalt mine, which is owned by China Molybdenum Co Ltd.

 

“Security is not a highly-paid profession, so if you can get kickbacks from turning a blind eye, it can make you money,” said Nicholas Garrett of RCS Global, a consultancy which audits mining supply chains.

 

In South Africa, there are an estimated 30,000 illegal miners providing one of the biggest sources of illicit gold on the continent, with an output of around 14 billion rand ($994.4 million) per year, according to ENACT, which conducts research into transnational organized crime.

 

    The illegal miners are known in Zulu as “zama-zamas,” which loosely translates as “those who try to get something from nothing.”

 

Sibanye-Stillwater, which spent millions upgrading its security infrastructure, found almost 1,400 zama-zamas in its Cooke gold mine during a 2017 security sweep.

 

    “We have been continually arresting and trying to control access to the mines, but it’s been difficult,” said Sibanye-Stillwater spokesman James Wellsted.

 

CONCESSIONS

    Governments and industry have been setting aside concessions for artisanal mining, but there are not nearly enough of those concessions to employ all the artisanal miners, many of whom continue to target larger deposits.

 

Miners operating in risky jurisdictions, as a result, employ a variety of measures - ranging from antagonistic to collaborative - to safeguard operations.

 

Such steps include the use of private security with military or police backgrounds; fences or other physical structures; regular border patrols; and even allowing artisanal miners access to certain areas of their operations, according to presentations from Barrick Gold Corp, Freeport-McMoRan Inc, Kinross Gold Corp and Newmont Goldcorp Corp.

 

Even still, artisanal miners slip through surveillance. In 2013, two were killed at Barrick’s Porgera mine in Papua New Guinea in a confrontation with police after a large crowd of illegal miners gathered at the mine, Barrick said at the time.

 

A spokeswoman for Barrick, the world’s largest gold miner by market value, declined to comment on the company’s latest security measures.

 

‘SHORT-TERM SOLUTION’

 

Delphin Monga, provincial secretary of the UCDT union, which represents KCC employees, said police fired teargas a few months ago to try to chase off the diggers, but it was only a temporary deterrence.

 

    Asked whether deploying the army would be an effective deterrent, Monga said: “Maybe as a short-term solution. But the dissuasive measures taken by the police and army do not intimidate the diggers.”

 

Some human rights activists say that armed responses to artisanal miners only exacerbate tensions with locals and ignore the underlying problems, which include the failure of large-scale mines to meaningfully contribute to development gains for the impoverished communities.

 

Artisanal miners “are the world’s hidden suppliers, and they’re working in horrible conditions,” said Karen Hayes of Pact, an NGO working across Africa to bolster supply chain transparency. “We already buy their minerals, whether we recognize it or not.”

 

In South America, Fura Gems Inc says securing all of its rural land in Colombia would be virtually impossible, so the emerald miner allows access in some areas, though it has promised to close a network of illegal tunnels.

 

“A mining company can’t do the job police do,” said Luis Rivera, an executive with Gold Fields Ltd and president of the Institute of Mining Engineers of Peru.

 

($1 = 14.0787 rand)

 

 

 

South African rand stronger after U.S.-China trade ceasefire

JOHANNESBURG (Reuters) - South Africa’s rand started the week stronger after the United States and China agreed to restart their troubled trade talks, lifting the mood across emerging markets.

 

At 0625 GMT, the rand traded at 14.0500 versus the dollar, around 0.2% firmer than its previous close.

 

Government bonds were also stronger, as the yield on the benchmark 2026 bond fell 3.5 basis points to 8.06%.

 

After meeting Chinese President Xi Jinping in Japan on the sidelines of Group of 20 summit, U.S. President Donald Trump said he would hold back on new tariffs and that China will buy more farm products.

 

China is South Africa’s top trading partner, and the rand is used by some investors as a proxy for emerging market risk, so the rand has tended to move on news on the U.S.-China trade war.

 

Warrick Butler at Standard Bank said in a note to clients that markets were expecting the South African Reserve Bank (SARB) to cut its main lending rate by 25 basis points at its monetary policy meeting this month.

 

“The likelihood of a SARB cut is high and the rhetoric could and should also be rather dovish,” Butler said.

 

 

 

CEO Collymore, who built Safaricom into $11 bln telco, dies of cancer

NAIROBI (Reuters) - Bob Collymore, the chief executive who helped to turn Safaricom Plc into East Africa’s most profitable company with an $11 billion valuation, has died after a nearly two-year long battle with cancer.

 

Collymore, who took the top job with the Kenyan company in 2010, oversaw an increase of nearly 500% in its share value thanks to the popular mobile money transfer service M-Pesa and a growing customer base.

 

Collymore, who was 61, had agreed in May to serve another year in the role after the Kenyan government, which owns 35% of the company, insisted that a local was picked to succeed him, complicating the hiring process.

 

The board will meet on Monday to discuss his succession, Chairman Nicholas Ng’ang’a said.

 

“The board was aware that sooner or later we needed to organise succession for Bob,” he told a news conference. “We will be giving a way forward hopefully later today or in the next 24 hours.”

 

President Uhuru Kenyatta, who worked with Collymore on a joint government and private sector initiative to draw up anti-corruption strategies, mourned his passing.

 

"We've lost a distinguished corporate leader whose contribution to our national wellbeing will be missed," the president said in a statement here

 

Employees at the company also spoke warmly of Collymore, praising his friendly personality and care for their welfare.

 

Collymore had travelled to Britain in October 2017 and received treatment for Acute Myeloid Leukemia, a cancer of the blood. He had since been undergoing treatment locally, the company said.

 

“In recent weeks, his condition worsened and he succumbed to the cancer at his home in the early hours of Monday,” the firm said. He is survived by a wife and four children.

 

REGULATORY BATTLES

Collymore, previously head of corporate affairs at South Africa’s Vodacom, led the company through a pricing war sparked by rival operator Airtel Kenya shortly before he joined Safaricom, presiding over a decision to maintain tariffs at elevated levels relative to the competition.

 

In recent years, he has fought off attempts by the telecoms regulator to break up the company into two, the financial services business and the telecoms business, due to its dominant size.

 

Safaricom, which is 35% owned by South Africa’s Vodacom, controls about 62% of Kenya’s mobile market, with 30 million subscribers. Britain’s Vodafone has a 5% stake.

 

Collymore’s successor will face the threat of regulatory intervention to seek to increase competition in the sector, analysts said.

 

“At least in the interim they need someone who will be able to continue the conversation with the government around regulation issues because that is the key risk,” said Mbithe Muema, a financial analyst at Infallible Group in Nairobi.

 

Shares fell 2.7% at the start of trading on Monday before paring the losses to trade 1.4% down in mid-morning.

 

Those who knew Collymore praised the drive that saw him rise to the top job at Safaricom with just a high school certificate.

 

“His work ethic was unquestionable,” said Jeff Koinange, a local broadcaster who was close friends with Collymore.

 

A Briton who was born in Guyana, Collymore, launched Vodafone’s 3G strategy in the Japanese business market and had worked for retailer Dixons, mobile operator O2 and BT in Britain before joining Vodafone.

 

($1 = 102.3000 Kenyan shillings)

 

 

 

US shares hit record and gold drops as trade talk hopes rise

The S&P 500 index of US stocks has closed at a record high amid signs of progress in US-China trade talks.

 

The index closed at 2,964.33, beating 21 June's previous high, with technology stocks driving the rise.

 

Market watchers say more optimism around a potential trade deal between the US and China led to the movement.

 

And gold, often seen as a safe asset in times of uncertainty, fell 2% to $1,382 per ounce, the biggest drop since June 2018.

 

The Dow Jones closed 0.44% higher at 26,717.43, while the Nasdaq finished 1.1% higher at 8,091.16.

 

In Europe, both the UK's FTSE 100 index and Germany's Dax closed 1% higher.

 

"We're right back on track," US President Donald Trump said after the countries agreed to restart trade talks.

 

US and China agree to restart trade talks

A quick guide to the US-China trade war

"Gold tends to do well during times of concern over growth, market volatility or when markets think the powers-that-be are losing control of events," said Russ Mould, investment director at stockbroker AJ Bell.

 

"A trade deal would deal with all three issues and markets are happy to take the view that a deal is coming. Though it could still be a long time coming, if there is to be one at all."

 

Trade row

Negotiations between China and the US have dominated market moves for months as positive statements are often followed by extra tariffs, sending stock, currency and commodity markets up and down.

 

The latest moves follow a pledge to renew talks between the US and China, an agreement that was reached at the G20 summit in Japan.

 

US President Donald Trump agreed to hold off on $300bn of new tariffs on goods and relaxed restrictions on Huawei, while China agreed to make new purchases of US farm equipment.

 

Last year, the US imposed three rounds of tariffs on more than $250bn worth of Chinese goods. China hit back by imposing tariffs ranging from 5% to 25% on $110bn of US products.

 

A truce agreed last December collapsed and in May the US raised tariffs on $200bn of Chinese products to 25% from 10%. Again China retaliated with tariff on $60bn of US goods.

 

'Strong run'

The price of gold is also retreating after gaining 8% in June, with prices exceeding $1,400 per troy ounce.

 

"Gold has just had a strong run. Nothing goes up in a straight line," said Mr Mould.

 

While it earns no income, like a share or a bond would, gold's indestructible nature and its place in history as a store of value make it attractive to some investors in times of strife.

 

Other safe-haven assets also declined, including the Japanese yen and the Swiss franc. The dollar rose 0.4% against the yen to 108.26, and advanced 0.7% on the franc to 0.9830 francs.--BBC

 

 

 

Chubb cuts coal insurance exposure because of climate change

Chubb has become the latest major insurer to cut its exposure to the coal industry, citing climate change.

 

The firm will no longer underwrite the building and operation of new coal-fired plants or new risks for companies that generate more than 30% of their revenues from coal mining.

 

Chairman Evan G. Greenberg said Chubb accepts "the reality of climate change... on our planet".

 

Allianz, Hannover, and Lloyds Banking Group have scaled back coal insurance.

 

The Switzerland-based insurer does most of its business in the US, where President Donald Trump has vowed to revive the coal sector.

 

Chubb is thought to be the biggest insurer operating in the US to introduce the policy, and it could put pressure on firms such as AIG and Travelers to follow suit.

 

"Making the transition to a low-carbon economy involves planning and action by policymakers, investors, businesses and citizens alike," Mr Greenberg said in a statement.

 

Chubb said exceptions to the new policy would be considered until 2022, taking into account an insured company's commitment to reduce coal dependence and also regions that do not have practical near-term alternative energy sources.

 

Last week, Zurich broadened its restrictions on underwriting and investing in fossil fuels.

 

This included companies that generate more than 30% of their revenue from mining, or generating electricity from, the shale oil sector.

 

Zurich boss Mario Greco said at the time that given climate risks and the devastation natural disasters inflict on people and communities, "it is simply the right thing to do".--BBC

 

 

 

The day the e-books stopped working

Consumers who bought ebooks via Microsoft's online store are losing access to their libraries.

 

The service, which launched in 2017, relied on the use of a web browser rather than a dedicated app and failed to build a significant audience.

 

Titles purchased or offered for free will no longer be available.

 

Out-of-pocket users are, however, being offered refunds including a $25 (£20) credit if they made highlights or notes, which will also be lost.

 

Outside source

Microsoft first warned customers of its move in April after giving up on its ambition of making its Surface computers a popular choice for reading digital novels and textbooks.

 

This marks the third time the company has pulled out of the market.

 

Although Amazon now dominates the industry with its Kindle platform, Microsoft actually pre-dated its rival by about seven years.

 

The MSReader format launched in 2000 as part of an alliance with the retailer Barnes and Noble. But along with rival efforts by Palm and the French firm Mobipocket, there was little interest.

 

It then tried to get back into the market again in 2012 as part of a second tie-up with B&N. However, that too struggled and the partnership came to an end in 2014.

 

Although many readers will not have even realised Microsoft had made a third run at the industry, experts say the cut-off serves as a reminder that you do not actually own a copy of most digital purchases outright but rather have purchased a licence that can expire.

 

"The fact is that you don't own e-books when you buy them with DRM [digital rights management] from Amazon or anywhere else," commented Jim Killock, executive director of the Open Rights Group.

 

"Technical controls through DRM are said to reduce unauthorised copying, but what they are really for is putting Amazon or Microsoft in charge of the e-book ecosystem."--BBC

 

 

 

Neil Woodford's flagship equity income fund to stay locked

Well-known stockpicker Neil Woodford's flagship fund will remain locked for investors, it has been confirmed.

 

The extension, announced as the initial 28-day suspension expired, means investors will have to wait at least another month to withdraw their money.

 

Investors in the Equity Income Fund have now not been able to access their money since 3 June.

 

Withdrawals were frozen after rising numbers of investors asked for their money back.

 

"It remains in the best interests of all investors in the fund to continue the suspension," Link, the regulated manager of the fund, said in a letter to investors posted on its website.

 

The next update on the fund will be before 29 July, the next formal deadline for a review.

 

Mr Woodford fuelled speculation that the fund could be locked for a long period, by reiterating that there is no "prescribed limit" to the suspension in a video statement to investors.

 

"Of course, we understand that people want access to their money, they are very frustrated by not being able to deal in the fund. But we are using the time . . . to ensure we get the right outcomes for our investors," he added.

 

Ryan Hughes, head of active portfolios at investment platform AJ Bell said it was now "imperative" that Mr Woodford communicated clearly with investors on progress.

 

"While this is difficult given liquidity is a moving target, investors deserve to be kept fully informed as the portfolio is repositioned."

 

Mr Hughes said the fund's performance had continued to deteriorate since the suspension, dropping 4% compared to a 3% rise in the FTSE All Share over the same period.

 

Celebrated

Mr Woodford is one of the UK's biggest names in stockpicking - which is when a fund manager analyses the potential of different stocks to try to decide whether or not they will make a good investment.

 

He was widely celebrated for previous success, and backed until the suspension by huge investment supermarket Hargreaves Lansdown - but both now face questions over how business was conducted amid criticism from investors.

 

Investor Claire Jebson and her husband have some of their money locked up in the Woodford fund. It was supposed to be used to help pay for son Sam's university education which is due to start in September.

 

However, she does not expect her money to be unlocked for another six to 12 months - missing the planned start of his studies.

 

"We didn't know this block could happen - our mistake. It is good that we all are aware now, but sad that this had to happen for us to find out," she said, echoing the views of many investors.

 

"We do have a back-up plan and I am sure others are in a worse position."

 

Paul Madon, from Leicester, said he expected the value of the investment to drop sharply when the suspension is eventually lifted.

 

"I thought [the Woodford fund] would be boringly safe. It was not," the 67-year-old said.

 

"I will get out as soon as I can, and take the loss."

 

Stuart Evans, who is saving for his grandchildren and spoke of his frustration with Hargreaves Lansdown last month, also said he expected to take a "big hit" when the fund eventually reopens.

 

What happened to the Woodford fund?

When the fund launched five years ago, Mr Woodford's previous record meant thousands of investors trusted him with their money.

 

At its peak, the Woodford Equity Income Fund managed £10.2bn worth of assets, such as local authority pension funds.

 

In its first year, there were returns of 18% on investors' money, compared with an average rise of only 2% on the London Stock Exchange at the time.

 

However, far from uniquely, this was followed by struggles in the last couple of years.

 

As a result, the fund has brought very little return for investors who have been in it throughout. Figures from FE Analytics show the fund has made a total return of 0.36% since its launch.

 

It also meant that investors pulled out at an increasingly rapid rate. The fund now manages £3.7bn, according to the financial services and research firm Morningstar.

 

Owing to this "increased level of redemptions", Mr Woodford and his backers said investors would not be allowed to "redeem, purchase or transfer shares" in the fund. In effect, it was suspended while they reordered the fund.

 

There has been criticism that, in the meantime, Mr Woodford has continued to charge management fees to customers.

 

Nicky Morgan, who chairs the Treasury Committee of MPs, said fees should be halted while trading in the fund was suspended.--BBC

 

 

 

Brexit farm trial: 'I really like the work'

Anastasia Savchenko was at agricultural university in Kharkiv in Ukraine when she saw a Facebook advert for a job picking courgettes on a farm in Cornwall.

 

The process of being interviewed and receiving her six-month work visa took about six weeks.

 

She is among 30 workers from non-EU countries who recently started at Cornish farm Riviera Produce as part of a Home Office trial.

 

In total, 2,500 people from Ukraine, Moldova and Russia have been recruited for seasonal work on farms from the South of England to Scotland.

 

Post-Brexit visa scheme for farm workers

Does fruit-picker scheme go far enough?

"I came here to earn money so I can start a business, a little shop with children's clothing and things for new mums", 31-year-old Ms Savchenko says.

 

"We really like the work, although to start with it was a bit bumpy because of the weather. There's plenty of time to meet friends, to go to town and the seaside".

 

Ms Savchenko believes her compatriots hope the trial will continue in future.

 

"People in the Ukraine are hoping they'll have the opportunity to come and earn money and get somewhere in life, because the situation in Ukraine as regards work is quite hard."

 

Michailo Sudak, who used to be in the Ukrainian army, is on the same visa as Anastasia.

 

He wanted to try new opportunities and found out about the job through a friend: "It's good for us to be here because we can earn money here, to buy flats or a car when we go home. Because in Ukraine, it's impossible to do".

 

He found the visa expensive. But he likes the job and would consider returning.

 

'We can't get local people'

David Simmons manages Riviera Produce, the farm in Cornwall where Ms Savchenko and Mr Sudak are working.

 

He used to rely on migrant workers from EU countries such as Poland and Lithuania to pick his cauliflowers, courgettes and brassicas, then more recently Romania and Bulgaria.

 

But in the past two years, their home economies picked up and the exchange rate became less favourable. Fewer have wanted to come.

 

Mr Simmons also believes uncertainty over Brexit has put them off. "We cannot get local people to come and harvest the crops.

 

"Without having these migrant workers the horticulture sector is dead. Last year in Cornwall there were crops that weren't harvested because there weren't enough staff," he says.

 

The Home Office pilot Ms Savchenko and Mr Sudak are on is a test of how a visa based immigration programme for seasonal farm jobs could work.

 

Two companies, Pro Force and Concordia, run the scheme's recruitment. Sorting visas for so many people was challenging, but has been achieved. Hundreds are already in the UK working.

 

Stephanie Maurel, Concordia's chief executive, said interest in the scheme from potential workers was "phenomenal".

 

"We could have filled the visas we had three times over at least," she says.

 

The pilot is not designed to provide all the workers the horticulture sector needs.

 

However, the National Farmers' Union says it could help solve growers' recruitment problem. It is asking the government to drastically expand the scheme to 30,000 workers next year.

 

Mr Simmons is also keen for the scheme to be expanded: "Hopefully it'll demonstrate to the government that the scheme will work and can be rolled out.

 

"We've got the work here for them, it brings them in on a visa so they're restricted to come to our farm, and it's a win-win situation for all concerned".

 

The Home Office says it will "keep the scheme under review to assess how successful it has been", adding that this will help determine longer-term arrangements.

 

It is also engaging with the wider agricultural sector as it looks to design the UK's future immigration system.--BBC

 

 

 

Japan resumes commercial whaling after 30 years

A small fleet of whaling vessels have caught their first whales in Japan's first commercial hunt in decades, in defiance of international criticism.

 

The whaling ships have a permit to catch 227 minke, Bryde's and sei whales this year in Japanese waters.

 

Japan's last commercial hunt was in 1986, but it has continued whaling for what it says are research purposes.

 

It has now withdrawn from the International Whaling Commission (IWC) so is no longer subject to its rules.

 

IWC members had agreed to an effective ban on whale hunting, but Japan has long argued it is possible to hunt whales in a sustainable way.

 

Enthusiasm among whalers

The fisheries ministry has set a kill cap for the season of 52 minke, 150 Bryde's and 25 sei whales - a total of 227 animals.

 

Last year's catch quota, under its scientific programme - which Japan said aimed to gather population data - was 333 whales.

 

"The resumption of commercial whaling has been an ardent wish for whalers across the country," the head of the agency, Shigeto Hase, said at a departure ceremony in northern Kushiro for the small fleet.

 

He said the resumption of whaling would ensure "the culture and way of life will be passed on to the next generation."

 

Why Japan is restarting commercial whaling

Could the ban on killing whales end?

Pro-whaling nations block sanctuary plan

"My heart is overflowing with happiness, and I'm deeply moved," said Yoshifumi Kai, head of the Japan Small-Type Whaling Association. "People have hunted whales for more than 400 years in my hometown."

 

"I'm a bit nervous but happy that we can start whaling," one whaler told AFP news agency before setting sail.

 

"I don't think young people know how to cook and eat whale meat any more. I want more people try to taste it at least once."

 

'Pirate whaling'

According to the IUCN Red List of Threatened Species, minke and Bryde's whale are not endangered. Sei whale are classified as endangered, but their numbers are increasing.

 

Conservationist groups like Greenpeace and Sea Shepherd remain critical of Japan's resumption of whaling, but say there are no concrete plans for action against the country.

 

"This is a sad day for whale protection globally," said Nicola Beynon of Humane Society International, accusing Japan of beginning a "new and shocking era of pirate whaling".

 

Japan "is out of step with the international community", Sam Annesley, executive director at Greenpeace Japan, said in a statement when Tokyo announced its whaling plans last year.

 

Like other whaling nations, Japan argues hunting and eating whales are part of its culture.

 

A number of coastal communities in Japan have hunted whales for centuries but consumption only became widespread after World War Two when other food was scarce.

 

Didn't Japan kill whales all along?

Whales were brought to the brink of extinction by hunting in the 19th and early 20th Century. In 1986, all IWC members agreed to a hunting moratorium to allow whale numbers to recover.

 

Whaling countries - like Japan, Norway and Iceland - assumed the moratorium would be temporary until everyone could agree on sustainable quotas. Instead it became a quasi-permanent ban.

 

Since 1987, Japan has killed between 200 and 1,200 whales each year under an exemption to the ban allowing scientific research.

 

Critics say this was just a cover so Japan could hunt whales for food, as the meat from the whales killed for research usually did end up for sale.

 

In 2018, Japan tried one last time to convince the IWC to allow whaling under sustainable quotas, but failed. So it left the body, effective from July 2019.--BBC

 

 

 

Tory leadership: Jeremy Hunt sets 30 September 'no-deal deadline'

Jeremy Hunt has said he would decide by the end of September whether there is a "realistic chance" of reaching a new Brexit deal with the EU.

 

The Tory leadership contender said he would deliver a provisional "no-deal Brexit budget" in early September and then give the EU three weeks.

 

He vowed to abandon talks after that if there was no "immediate prospect" of progress and move to a no-deal footing.

 

His rival Boris Johnson has vowed to leave "come what may" by 31 October.

 

Speaking to reporters on Monday, Mr Johnson said it was important to have a "hard deadline" for leaving, adding that previous no-deal preparations had "sagged back down" after exit dates were not met.

 

The Conservative Party's 160,000 members will begin voting next week and Theresa May's successor is expected to be announced on 23 July.

 

Compare the leadership candidates

Is there a Brexit 'war chest'?

Hunt's tax plans 'could cost up to £65bn'

Johnson tax plan 'would benefit wealthy'

If successful, Mr Hunt said he would "engage" with fellow EU leaders during August, and task a new negotiating team with producing an "alternative exit deal" - including ideas to solve the Irish border issue - to be published by the end of the month.

 

At the same time, he said preparations for no deal would continue in earnest, and all leave for civil servants at government departments would be cancelled unless he received guarantees that no-deal planning was "on time and on track".

 

BBC political editor Laura Kuenssberg said the timeline Mr Hunt was setting out was very tight - especially given the notice the government's fiscal watchdog, the OBR, usually needs to prepare for a Budget.

 

 

The foreign secretary also warned MPs against attempting to block a no-deal Brexit, warning it could make it harder to get a new agreement by giving the EU "misplaced confidence that we'll give ground".

 

He added that detailed preparation plans for no deal were needed to make it a "credible threat" to the EU, and give the UK "leverage" in the talks.

 

In a direct challenge to his leadership rival, he said the chances of a no-deal Brexit were "far from" the million to one odds recently quoted by Boris Johnson, and it would not be possible to deliver it "on a wing and a prayer".

 

'No deal relief'

A no-deal exit on 31 October remains the default position in UK law after MPs rejected the agreement Theresa May agreed with Brussels three times.

 

If that does happen, the UK will automatically begin trading with the EU under the basic World Trade Organization (WTO) rules.

 

Under these rules, the tariffs - the taxes on imported and exported goods - will be different to what the UK currently trades under, which means the cost to farmers to export products could change or they could be affected by competition from abroad.

 

The National Farmers Union has said British farming will be "damaged" if that happens.

 

 

In a speech in London, Mr Hunt said a government led by him would cover the costs of the tariffs that would be imposed on the exports of the farming and fishing industries.

 

He promised to create a temporary "no deal relief programme" - designed to be similar to US President Donald Trump's promise of £16bn for farmers affected by Chinese tariffs.

 

What is no deal?

Can Parliament stop a no-deal Brexit?

"If you're a sheep farmer in Shropshire or a fisherman in Peterhead I have a simple message for you," Mr Hunt said.

 

"I will mitigate the impact of a no-deal Brexit on you and step in to help smooth those short-term difficulties.

 

"If we could do it for the bankers in the financial crisis, we can do it for our fisherman, farmers and small businesses now."

 

BBC Reality Check: Will Hunt's farming pledge help?

Farmers are worried about a no-deal Brexit, and this £6bn pledge comes on top of the undertaking by the government to pay farming subsidies at EU levels until 2022.

 

Beef and lamb exports, for example, would face 40% tariffs in the case of no deal, and that would be after the EU had approved the UK as an exporter of animal products, which the National Farmers Union (NFU) says could take a minimum of six months.

 

The UK exports about £14bn of agri-foods to the EU a year, so Jeremy Hunt's pledge would cover a lot of disruption but not the "devastation" that the NFU is warning of.

 

Meanwhile, he would have to take care that this new regime did not fall foul of WTO rules on either state aid or export subsidies.

 

Mr Johnson also promised to support the rural community after Brexit during a meeting with farmers in Cumbria last week, insisting farmers "should be assured that we will support the rural community, with price support, efficiency payments, whatever".

 

Meanwhile, one of his leading backers, Health Secretary Matt Hancock, told the Times the days of public sector "pay freezes" under Theresa May and David Cameron would be over if Mr Johnson was elected.

 

Mr Hancock said: "People in the public sector need to be properly rewarded for the brilliant job they do."

 

"Now that there's money available, we need to show the public sector some love," he added.

 

 

But during a campaign visit in Kent on Monday, Mr Johnson declined to make a detailed pledge on public sector pay, saying only that remuneration should be "decent".

 

He also defended his spending promises during the campaign so far, insisting he had a "very carefully costed programme".

 

Magic money tree?

Analysis: Norman Smith, BBC assistant political editor

 

It does all raise the question - where on earth is the cash for all these pledges going to come from? Have Mr Johnson and Mr Hunt discovered the proverbial "magic money tree"?

 

No, instead they're looking to dip into the chancellor's back pocket.

 

Philip Hammond has suggested he has £26bn of what is called "headroom" in his current fiscal forecasts - basically, scope to borrow that much more - and Mr Johnson and Mr Hunt are saying they'd do just that.

 

To many Tories this sits at odds with the thrust of Tory thinking.

 

The other thing which makes the spending pledges slightly more dubious is that Mr Hammond says, "Ok, I've got this headroom - but if we come out with no deal then all the money is going to have to be put into propping up the economy and getting us through that."

 

Both leadership contenders have unveiled plans to cut taxes and spend more, designed to win support for their candidacies, but questions have been raised about how they would pay for the pledges.

 

Earlier in the campaign, Mr Johnson said he wanted to raise the threshold for the higher rate of income tax, predicting this would stimulate the economy, and increase government revenues.

 

He has said he would partially fund some of his plans from "fiscal headroom" carved out by current Chancellor Philip Hammond in his current spending plans.

 

This amount - estimated at £26.6bn at the spring statement - is an additional amount the UK could borrow without breaking self-imposed limits on government borrowing.

 

The figure is based on projections that assume the UK left the European Union with a deal, but Mr Hammond has warned that handling a no-deal exit would absorb that potential cash.

 

"Either we leave with no deal or we preserve our future fiscal space - we cannot do both", he said last month, and on Monday, he reiterated that message.

 

 

Sources close to Mr Hunt have also suggested he would use this "headroom" to partially fund his pledge to boost defence spending by £15bn over the next five years.

 

But economist Paul Johnson, from think thank the Institute for Fiscal Studies, pointed out that the £26.6bn is "a one-year target so can't fund permanent tax cuts/spending increases".

 

Speaking on Sunday, Mr Johnson said he would be prepared to borrow more to finance "great objectives" in his spending plan, whilst keeping "fiscal responsibility".

 

He told Sky News there was up to £25bn "available" in the short term, due to the improved state of the public finances, which "we intend to use" on education, policing and broadband rather than reducing the deficit.--BBC

 

 

 

 

 

 

 

 

 

 

 


 

 


 

INVESTORS DIARY 2019

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


Edg Edgars

AGM

Edgars Training Auditorium, 1st Floor LAPF House, 8th Avenue/Jason Moyo St, Bulawayo

11 July 2019, 9am

 


Companies under Cautionary

 

 

 


 

 

 

 


Bindura Nickel Corporation

 

 

 


Padenga Holdings

 

 

 


Delta Corporation

 

 

 


Meikles Limited

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 


DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of Faith Capital (Pvt) Ltd for general information purposes only and does not constitute an offer to sell or the solicitation of an offer to buy or 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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