Major International Business Headlines Brief::: 03 July 2019

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Major International Business Headlines Brief::: 03 July 2019

 


 

 


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

 


 

 


 

 

*  Nigeria will sign Africa free trade agreement -presidency

*  Kenya's Safaricom names ex-CEO Joseph as interim replacement for Collymore

*  Ivory Coast economic growth seen near unchanged in 2019 at 7.5% - IMF

*  S.Africa's Steinhoff seeks to recoup payments made to ex-CEO, CFO

*  Pfizer JV gets conditional approval from S.Africa's competition regulator

*  S.Africa's Truworths in talks to restructure debt at British shoe chain Office

*  Shell, Nigerian communities agree to reopen oil flow station, says official

*  Pfizer, Sanofi, to boost South African Biovac's vaccine output

*  Cash-strapped airline Fastjet's CEO to step down

*  South Africa's rand steady as global risk appetite fades

*  Nike loses factory aid as 'racist trainer' row intensifies

*  Christine Lagarde: The 'rock star' of finance

*  Internet wobble caused by Cloudflare glitch

*  Scotch whisky targeted by new US tariffs

*  EU-Swiss share trading row: What does it mean?

*  How do you know your diamond isn't fake?

 

 


 <mailto:info at bulls.co.zw> 

 


 

Nigeria will sign Africa free trade agreement -presidency

LAGOS, July 2 (Reuters) - Nigeria will sign an Africa free trade agreement at the coming African union summit, according to a statement posted on the Nigeria presidency’s Twitter feed on Tuesday.

 

Nigeria, the largest economy on the continent, was one of the last countries that had not committed to signing the deal and its decision to join the bloc will significantly bolster its clout.

 

The African Continental Free Trade Agreement (AfCFTA) aims to eliminate tariffs between member states, creating a market of 1.2 billion people with a combined GDP of more than $2.2 trillion.

 

Apart from Nigeria, only Eritrea and Benin have chosen not to join the zone. President Muhammadu Buhari had expressed concern it could allow neighboring countries to inundate Nigeria with low-priced goods, and confound efforts to encourage moribund local manufacturing and expand farming.

 

But a panel set up to assess the impact of joining the bloc recommended last week the president “should consider joining.”

 

“Our position is very simple, we support free trade as long as it is fair and conducted on an equitable basis,” the Twitter feed quoted Buhari as saying.

 

It added Nigeria would sign onto the deal at an upcoming African Union summit in Niamey, Niger. The agreement with the other signatories came into force on May 30. 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

Kenya's Safaricom names ex-CEO Joseph as interim replacement for Collymore

NAIROBI (Reuters) - Kenya’s Safaricom named board member and former chief executive Michael Joseph as its interim CEO on Tuesday after the telecom firm’s long-time head Bob Collymore died on Monday following a nearly two-year battle with cancer.

 

Joseph, 73, a dual American and Kenyan national, who served as Safaricom’s CEO between July 2000 and November 2010, said he would stay in the post until the company finds a permanent replacement.

 

Collymore, who helped to turn Safaricom into East Africa’s most profitable company with an $11 billion valuation, had agreed to continue as CEO for another year in May after the Kenyan government, which owns a 35% stake, insisted that a local was picked to succeed him.

 

“They just need somebody to sort of steer the company as they decide on a substantive CEO,” said Eric Musau, head of research at Standard Investment Bank. “It is just to get that reassuring hand during this transition.”

 

During his previous tenure as CEO, Joseph, an electrical engineer, transformed the telecoms group from a subscriber base of fewer than 20,000 to more than 16.71 million, Safaricom said.”The board is confident that during this transition, Mr. Joseph will provide the necessary guidance and leadership to the company and its employees,” Safaricom said in a statement.

 

Joseph also presided over the company during its IPO in 2008 and pioneered Kenya’s successful M-Pesa mobile money transfer system. In his last full year as CEO, Safaricom posted a 37 percent rise in pretax profit.

 

Collymore took over as CEO in 2010, overseeing an increase of nearly 500% in Safaricom’s share price thanks to M-Pesa’s popularity and a growing customer base.

 

Joseph, who served as Vodafone’s director of Mobile Money until last year and is a strategic adviser on the boards of Vodacom South Africa, Vodacom Tanzania and Vodacom Mozambique, told Reuters he would continue in his role as chairman of Kenya Airways.

 

Shares in Safaricom, which is 35% owned by South Africa’s Vodacom and controls about 62% of Kenya’s mobile market with 30 million subscribers, were flat at 28.10 shillings at 0842GMT. Vodafone Group has a 5% stake in Safaricom.

 

 

 

 

Ivory Coast economic growth seen near unchanged in 2019 at 7.5% - IMF

DAKAR (Reuters) - Ivory Coast’s economy is expected to grow by 7.5% this year, in line with 7.4 percent last year, and medium-term growth will remain strong, the International Monetary Fund said on Tuesday.

 

The budget deficit is projected to converge to the regional norm of 3 percent in 2019, the IMF said in a review announcing the immediate disbursement of $133.9 million under a lending programme agreed in 2016.

 

 

 

 

S.Africa's Steinhoff seeks to recoup payments made to ex-CEO, CFO

JOHANNESBURG (Reuters) - Steinhoff International has started legal proceedings against former Chief Executive Markus Jooste and ex-finance chief Ben La Grange to recover certain salary and bonus payments they got prior to 2017.

 

The South African retailer’s CEO Louis du Preez told lawmakers in March that Jooste, la Grange, along with six other people, were involved in inflating Steinhoff profits and asset values over several years, forcing the firm to restate years of financials.

 

Steinhoff first flagged holes in its accounts in December 2017 — leading to the exposure of a more than $7 billion accounting fraud — shocking investors who had backed its rise from a small South African outfit to a discount furniture retailer straddling four continents.

 

Steinhoff, which is also listed in Frankfurt, said on Tuesday it launched the legal proceedings on June 19 in the Cape Town High Court. Jooste’s lawyer, Callie Albertyn, could not be immediately reached for comment.

 

“I can confirm on behalf of Mr. La Grange that he has received the claim from Steinhoff and that he will be defending the claim,” his lawyer Chris Hessian, said in an emailed response to questions.

 

“He does not wish to comment further on the matter.”

 

In its delayed 2017 annual report, the owner of Mattress Firm in the United States and furniture retailer Conforama in France, said that Jooste received a bonus payment of 2.1 million euros ($2.37 million) in March and May 2017. It said 500,000 euros of that amount was neither proposed by the human resources and remuneration committee nor approved by the supervisory board.

 

Steinhoff also said it received summons on June 21 from Barents & Krans on behalf of Hamilton B.V, initiating legal proceedings against the retailer and others “for declaratory relief relating to currently unquantified damages arising from alleged wrongful acts”.

 

($1 = 0.8856 euros)

 

 

 

Pfizer JV gets conditional approval from S.Africa's competition regulator

(Reuters) - GlaxoSmithKline Plc and Pfizer Inc’s planned joint venture received conditional approval from a South African regulator on Tuesday, clearing a hurdle in the creation of a consumer health giant with sales of 9.8 billion pounds ($12.38 billion).

 

South Africa’s Competition Commission said although the deal was not likely to reduce competition, it would impact local manufacturers of pharmaceuticals for Pfizer.

 

To address those concerns, the regulator suggested the merging parties continue using Spechpharm Holdings, a South African firm that provides manufacturing and packaging services, for three years.

 

($1 = 0.7919 pounds)

 

 

 

S.Africa's Truworths in talks to restructure debt at British shoe chain Office

JOHANNESBURG (Reuters) - South African fashion retailer Truworths International Ltd said on Tuesday its British footwear chain Office has entered debt restructuring talks with its lenders amid tough trading conditions.

 

“In light of the depressed retail trading environment currently being experienced in the UK, Office has entered into discussions with the relevant lenders regarding potential debt restructuring options,” Truworths said in a statement

 

The company said Office has around 45 million pounds ($56.90 million) of debt, “a significant portion” of which will be settled through a lump sum payment maturing in December 2020.

 

Truworths acquired the Office chain in 2015 but the business has been under pressure due to the collapse of department store House of Fraser, where it had several concessions.

 

Retailers are struggling to cope with uncertainty over Britain’s exit from the European Union, weakening consumer spending and an increasing shift to online sales, meaning many are weighed down with excess and costly store space as they invest in distribution centres and logistics.

 

The sector has already seen the collapse of BHS, music store HMV, electronics firm Maplin and cycle shop Evans.

 

The South African-listed clothing, shoes, jewellery and homeware retailer said the debt restructuring talks will not have a material impact on the its operations in its home market and the rest of Africa.

 

($1 = 0.7909 pounds)

 

 

 

Shell, Nigerian communities agree to reopen oil flow station, says official

ABUJA (Reuters) - International oil major Shell and Nigerian stakeholder communities agreed to reopen the flow station for the Oil Mining Licence 25, the regional Rivers state governor said.

 

Shell also agreed in the memorandum of understanding to pay money owed to the communities, according to the statement. The amount was not specified.

 

Local communities had occupied the flow station and stopped operations for almost two years, in a bid to force Shell to sell the oil mining licence to a local oil firm. The memorandum of understanding does not mean the local firm will win the licence.

 

A Shell spokesman said the firm welcomed the peaceful resolution and resumption of operations.

 

 

 

Pfizer, Sanofi, to boost South African Biovac's vaccine output

CAPE TOWN (Reuters) - South Africa’s Biovac Institute will start local production of Sanofi’s Hexavalent vaccine next year and Pfizer’s anti-pneumonia Prevnar 13 vaccine in 2021, boosting supply of life-saving drugs in its main market, its CEO said.

 

Local output of the two human vaccines is a step change for Biovac, a public-private partnership 47.5%-owned by the South African government with long-term ambitions of expanding sales into the continent.

 

The new production lines follow years of technology transfers and skills upgrades with partners Sanofi and Pfizer in Africa’s largest pharmaceutical market. The companies were tight-lipped about commercial details of the partnership.

 

“We start production of Hexavalent in Q3 2020,” Morena Makhoana, Biovac’s chief executive said at its state-of-the art facility in Cape Town.

 

The plant, modernized at a cost of around 1 billion rand ($70 million), will produce four million doses of Hexavalent vaccine a year and has capacity to ramp up significantly as it explores new markets in neighbouring Namibia, Mozambique and Angola, he said.

 

South Africa’s government buys about 95% of the total 25 million doses of vaccine supplied annually by Biovac, covering diseases such as tuberculosis, cervical cancer and influenza.

 

Biovac’s dose of Hexavalent, a six-in-one vaccine for several diseases including diphtheria, tetanus and polio, is the only one in the world that is fully liquid and unlike other versions on the market, Makhoana said, does not have to be mixed before injecting. This makes it easier to administer in remote and resource-poor clinics across Africa, he added.

 

“On this particular six-in-one vaccine we are the only tech transfer partner with Sanofi in the world, so we are very proud,” Makhoana told Reuters.

 

Sanofi said it will continue to invest in South Africa’s vaccine programme as it looks to bolster its position.

 

“South Africa, and Africa for that matter, is an emerging market and showing strong growth year-on-year and hence will remain a priority for Sanofi,” Merilynn Matthew, who heads Sanofi’s South African vaccines unit, said.

 

Around one-in-five African children do not get immunized, with measles alone accounting for 61,000 preventable deaths a year on the continent, according to the World Health Organisation.

 

SECURITY OF SUPPLY

Biovac, the rest of which is owned by a consortium led by local investment holding firm Immunotek, has also made progress preparing Pfizer’s pneumonia vaccine for infants, Prevnar 13, Makhoana said. It expects full output of 3 million doses to start in the first half of 2021.

 

Under a five-year agreement signed with Pfizer in 2015, Biovac only packaged labelled syringes but it is now acquiring the formulation and filling processes ahead of the new product line launch.

 

“Security of supply is one big issue and the second is the economic benefits local production brings, while making sure that prices are equally benchmarked and South Africa pays a fair price in line with other middle income countries such as Brazil or Turkey,” Makhoana said.

 

At the partnership launch four years ago, a cabinet minister said the pneumonia vaccine alone used up 40% of South Africa’s total budget for vaccines, with the government then paying around 185 rand ($13.11) per single dose of imported Prevenar 13. Each infant will eventually need three doses. Pfizer did not provide the current cost of the vaccine.

 

“The technology transfer process has enabled significant knowledge transfer, job creation and direct investment,” said Rhulani Nhlaniki, Pfizer’s country manager.

 

($1 = 14.1249 rand)

 

 

 

Cash-strapped airline Fastjet's CEO to step down

(Reuters) - Struggling low-cost African airline Fastjet Plc said on Tuesday that after three years at the helm its Chief Executive Officer Nico Bezuidenhout would step down to re-join a business that he founded.

 

Media reports here last month suggested that Bezuidenhout could return to Mango Airlines as its top boss, a role he previously held for nearly a decade.

 

Bezuidenhout could not immediately be reached for comment.

 

Fastjet said Mark Hurst, its deputy group chief executive officer, will lead the airline until a permanent replacement is appointed.

 

The airline, which operates in South Africa, Mozambique and Zimbabwe, has faced several issues related to its dwindling cash pile and was saved from going under after striking a deal to raise funds late last year.

 

Bezuidenhout told Reuters last week that Fastjet expects to be profitable on an underlying basis in 2019.

 

 

 

South Africa's rand steady as global risk appetite fades

JOHANNESBURG (Reuters) - South Africa’s rand was little changed early on Tuesday, struggling for momentum as investors awaited local and offshore developments before making any big bets as last week’s risk-on sentiment faded.

 

At 0700 GMT the rand was 0.02% firmer at 14.1375 per dollar.

 

The rand had gained strongly in the previous month along with other emerging assets as the greenback slumped over the likelihood of lower U.S. lending rates, but the dollar has bounced back.

 

“Although the rand has continued to trade steadily over the most recent sessions, it has as yet failed to breach sub-14.0000, and with little by way of local news to provide support, it has retreated from its best levels,” analysts at Nedbank said.

 

A trade truce between the United States and China on the sidelines of the G20 summit over the weekend has calmed fears and boosted the dollar, but negotiations are ongoing, with the uncertainty curbing risk-taking by investors.

 

“The markets remain at the mercy of any headlines regarding the resumption of trade talks between the U.S. and China,” the analysts said in a note.

 

Bonds were weaker, with the yield on the benchmark 10-year government issue <ZAR186= > adding 2.5 basis points to 8.15%.

 

 

 

Nike loses factory aid as 'racist trainer' row intensifies

Arizona has pulled a $1m grant to help Nike build a new factory in a dispute over the firm's withdrawal of a trainer allegedly featuring racist symbolism.

 

The state's governor had condemned Nike's decision, which was prompted by complaints about its use of an old US flag embraced by white nationalists.

 

Nike-sponsored sportsman Colin Kaepernick had criticised the trainers, now selling on websites for $1,500.

 

But governor Doug Ducey said Nike had bowed to political correctness

 

The special edition Air Max 1 Quick Strike Fourth of July trainer features the The Betsy Ross flag.

 

With a circle of 13 stars representing the first US colonies, the flag was created during the American Revolution. Although opinion is divided over its origins, the flag was later adopted for use by the American Nazi party.

 

Nike said it withdrew the trainers "based on concerns that it could unintentionally offend and detract from the nation's patriotic holiday".

 

On Tuesday the trainers were selling for well over $1,500 on StockX, the online marketplace for trainers.

 

Earlier, Mr Kaepernick, a former NFL star, reportedly told Nike that he found the flag offensive because of its connection to the era of slavery. Other critics also raised concerns with Nike.

 

Last year, he became the face of Nike's advertisement marking the 30th anniversary of the company's "Just Do It" slogan.

 

The former American football quarterback had previously sparked a furore by kneeling during games to protest against police violence against African-Americans.

 

But the decision sparked fury.

 

Doug Ducey, the Republican governor of Arizona, said in a series of tweets: "Words cannot express my disappointment at this terrible decision. I am embarrassed for Nike.

 

"Instead of celebrating American history the week of our nation's independence, Nike has apparently decided that Betsy Ross is unworthy, and has bowed to the current onslaught of political correctness and historical revisionism," he said.

 

Later, the governor's office confirmed that the $1m from the Arizona Commerce Authority' Competes Fund had been withdrawn. The fund is designed to attract, expand or retain businesses to the state. The factory was expected to generate about 500 jobs.

 

Nike said in a statement it remained committed to making "a significant investment in an additional manufacturing centre which will create 500 new jobs". It did not mention the Arizona plant by name.

 

Texas Senator Ted Cruz also dismissed Nike's move as unpatriotic, writing on Twitter that the shoe giant "only wants to sell sneakers to people who hate the American flag". Other Twitter users called for a boycott of Nike products over the move.

 

However, Nike also received widespread support, with Twitter users pointing out that the flag had been used by white nationalists.

 

Matt Powell, senior industry adviser at the research and consultancy group NPD, said said Nike would probably find support among its core consumers.

 

"I think it's important to understand who Nike's core demographic is here. They're really focused on teens and looking at the commentary on Twitter and so forth, I don't see a lot of teens coming out with a negative attitude here," he said.

 

 

Mr Kaepernick has not played in the National Football League (NFL) since the 2016 season, and sued the organisation, arguing team owners deliberately froze him out because of his activism, later settling with the NFL.

 

Betsy Ross was credited with sewing the first "Stars and Stripes" flag in 1776, although this version of events has been rejected by modern US scholars.

 

Nike is not the only company to recently face a backlash over products labelled racially insensitive. In December, Prada pulled products accused of depicting blackface.

 

And on Monday, reality TV star and businesswoman Kim Kardashian said she would rename her Kimono line after people in Japan said her use of the term was disrespectful.--BBC

 

 

 

 

Christine Lagarde: The 'rock star' of finance

"No, no, no no, no no," was what Christine Lagarde was reported to have said when asked last year if she was interested in running the European Central Bank (ECB).

 

Yet just a few months later, she has been nominated as the institution's new president.

 

Ms Lagarde - known as the "rock star" of international finance - said the new role was "an honour".

 

Poised, chic and known for her straight talking, she has become one of Europe's most influential ambassadors in the world of international finance.

 

Assuming the nomination is signed off by the Eurozone group she will become the central bank's first ever female leader, responsible for the euro and the monetary policy of the eurozone.

 

Until this weekend, the main contenders for the ECB job were male central bankers.

 

"First ever female" is a tag that has followed Ms Lagarde throughout her career.

 

The former lawyer was the first woman to chair global law firm Baker McKenzie, the first woman to serve as a finance minister from any Group of Seven nation and then the first to lead the International Monetary Fund (IMF).

 

Unsurprisingly she has long championed promoting women into powerful positions, saying it's the key to improving the world economy.

 

"As I have said many times, if it had been Lehman Sisters rather than Lehman Brothers, the world might well look a lot different today," she said earlier this year.

 

The silver-haired 63-year-old is legendary for her stamina. A former synchronised swimmer for the French national team, she is reported to exercise daily, even during meetings if necessary.

 

In her current role, she has been praised for steering the Washington-based IMF through the aftermath of the financial crisis.

 

'She will face challenges'

Analysis by By Andrew Walker, BBC World Service economics correspondent

 

Christine Lagarde's status as rock star of international finance is beyond doubt.

 

She has a high profile as managing director of the International Monetary Fund, building on her experience as a cabinet minister in France.

 

What she doesn't have is the technical expertise as a central banker. The previous presidents of the ECB did.

 

All three had been governors of their own national central banks. Mario Draghi in particular presided over the bank at a time when it faced the eurozone financial crisis and a weak economic recovery. The response was both innovative and technical.

 

Christine Lagarde would not be the first ever central banker to be in that position. But there could well be challenges.

 

The eurozone is struggling with inflation that is persistently below its target. Getting it back up might require more innovation. Ms Lagarde would need to draw on the expertise of the ECB's technocrats.

 

Her career has however had one significant negative, when she was investigated for abuse of authority during her time as French finance minister in 2007.

 

In 2016, she was convicted in a French court for failing to challenge a €404m award to flamboyant French businessman Bernard Tapie in 2008 over the sale of sportswear brand Adidas. She did not serve a sentence.

 

Ms Lagarde has always defended her decision, saying it was "the best solution at the time".

 

Her drive means Ms Lagarde's career has continued unaffected.

 

It's a determination that she learnt at a young age after her father's death when she was 17. Her mother, widowed at just 38, bought Ms Lagarde and her three younger brothers up alone.

 

"My mother was a very strong character. I learnt a lot from her," she told the Financial Times in an interview.

 

Consistently ranked among the top 10 most powerful women globally, Ms Lagarde has helped to rebuild the IMF's credibility following Greece's 2010 bailout, which bent the fund's rules.

 

She also presided over the IMF's biggest bailout, a $57bn deal for Argentina last year that many credited with arresting emerging market turbulence.

 

Despite her lack of monetary policy experience, one former IMF official said her leadership of the fund meant she was "exceptionally qualified" to run the ECB.

 

"She knew how to impose calm without posing as morally superior," instead displaying "a touch of humanity," said a former colleague.

 

Mark Sobel, a former US Treasury official and chairman of the Official Monetary and Financial Institutions Forum, said Ms Lagarde has experience in monetary policy even though she is not an economist.

 

"She's been involved in all the monetary debate and it's not like they don't discuss monetary policy at the fund," he said.

 

Christine Lagarde's career

*         1956: Born in Paris

*         1973: Wins scholarship to exclusive US school for a year, where she perfects her English

*         1981: After law school in Paris, joins international law firm Baker & McKenzie as an associate, becoming chair 18 years later

*         2005: Becomes France's trade minister in 2005

*         2007: Becomes France's finance minister, the first woman to hold this post not just in France but in any of the G8 major industrial countries

*         2011: Becomes head of the IMF

*         2019: Nominated to become president of the European Central Bank--BBC

 

 

 

Internet wobble caused by Cloudflare glitch

Internet users faced problems accessing many websites for about an hour because of a problem with Cloudflare.

 

The company provides internet security and other services meant to help online businesses operate smoothly.

 

Many members of the public had reported seeing "502 errors" displayed in their browsers when they tried to visit its clients.

 

The service has more than 16 million customers ranging from the chat service Discord to the dating site OKCupid.

 

Cloudflare said the problem had now been resolved although some of its analytics tools were still facing disruption.

 

Among the casualties was Downdetector, a popular site used to monitor disruption.

 

CoinDesk - a news site specialising in cryptocurrencies - was also one of those affected. It said that it had received bad data from its providers as a consequence, which resulted in it misreporting prices.

 

"Calm down everyone, Bitcoin is not $26," it tweeted before adding that it had now resolved the issue.

 

The plane-tracking service Flightradar24, social media statistics service Social Blade and vineyard monitoring system Vinelytics were among others to confirm they had been affected.

 

Network error

A 502 error code signifies that an internet server has received a invalid response from another server it is trying to contact.

 

There has been speculation that San Francisco-based Cloudflare had suffered a distributed denial of service (DDoS) attack - in which it had been flooded with traffic.

 

But it has denied this was the case and has blamed the incident instead on a "bad software" update that had been "rolled back".

 

"This was not an attack (as some have speculated) and we are incredibly sorry that this incident occurred," blogged John Graham-Cumming, the firm's chief technology officer.

 

"Internal teams are meeting as I write performing a full post-mortem to understand how this occurred and how we prevent this from ever occurring again."

 

The Register reported that the firm also experienced issues last week, although that time it appears that the telecoms network Verizon was at fault.—BBC

 

 

 

Scotch whisky targeted by new US tariffs

Scotch whisky is among the products targeted by the US for a possible range of new tariffs on imported goods.

 

The US has threatened to impose tariffs on European Union imports worth up to $4bn (£3.2bn), although it is not known when tariffs would be imposed.

 

Whiskey from Ireland, cheeses including Parmesan and Gouda, pasta and olives are other items affected.

 

The US Trade Representative said it was "in response to harm caused by EU aircraft subsidies".

 

In April, the US announced proposed tariffs on $11bn of EU goods.

 

The moves are part of a 15-year dispute at the World Trade Organization between the US and EU over subsidies given to plane-makers Airbus, from Europe, and the US's Boeing.

 

How can Boeing regain trust?

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Can China's plane-maker take on Boeing and Airbus?

The United States is the world's largest export market for Scotch whisky by value - £1.04bn in 2018. By volume, it is the second largest, with 137 million 70cl bottles exported last year.

 

A spokesperson for the Scotch Whisky Association told the BBC: "Exports of Scotch whisky to the US have been zero tariff for 20 years, so it is disappointing that Scotch whisky has been drawn into this dispute.

 

"The Scotch whisky industry has consistently opposed the imposition of tariffs, which harms economies on both sides of the Atlantic which depend on trade for their continued prosperity.

 

"There is a close relationship between the US whiskies and Scotch whisky, not least due to the use of bourbon casks for maturation which generates around £70m for the US economy each year.

 

"We continue to urge the UK government, the EU and the US government to resolve this situation."

 

Scotch whisky makes up 12% of the total whiskey market in the United States, with US whiskey accounting for 48%.

 

'Negative impact'

The Distilled Spirits Council of the United States warned that the move may harm both jobs and consumers in the country.

 

"We strongly oppose the inclusion of distilled products in the proposed retaliation list," said spokeswoman Lisa Hawkins.

 

"US companies - from farmers to suppliers to retailers - are already being negatively impacted by the imposition of retaliatory tariffs by key trading partners on certain US distilled spirits.

 

"These additional tariffs will only inflict further harm," she said.--BBC

 

 

 

EU-Swiss share trading row: What does it mean?

The European Union and Switzerland have imposed new restrictions that affect each other's financial firms.

 

It is a striking deterioration in what has long been a close economic relationship.

 

What are the new restrictions?

 

Investment firms in the EU are no longer allowed to trade on the Swiss stock exchange. The arrangement, known as "equivalence", which previously allowed them to do that lapsed at the end of June and the European Commission has decided not to renew it, for now at least.

 

In response to the EU's move, Switzerland has banned the trading of Swiss shares on EU markets.

 

Why did the EU take this action?

 

This is part of a wider issue between the two sides.

 

Switzerland's economic relations with the EU are governed by about 120 separate bilateral agreements. These give Swiss businesses access to most of the EU's single market.

 

But the EU wants to update and simplify the arrangement with a new framework agreement. The European Parliament has described the current situation as "complex, sometimes incoherent and not easy to sustain".

 

They have a draft of a new agreement, but the Swiss side first went for public consultation and have more recently asked for clarification.

 

The EU has become frustrated by the delay and has allowed the equivalence arrangement for Swiss stock markets to expire.

 

What are Switzerland's reservations?

 

The Swiss government has concerns that the agreement might lead to EU citizens receiving more welfare benefits.

 

They also fear that it might limit government subsidies to businesses and make it harder to protect Swiss wages - which are high - from low wage competition.

 

But there is also a wider political context.

 

The right wing Swiss People's Party - which received the most votes in the last four elections - is hostile to the European Union and to the free movement of workers that goes with Switzerland's relationship with its much larger neighbour. And there is an election later this year.

 

What exactly is equivalence?

 

In some areas of financial regulation the European Commission can decide that other countries have equivalent standards to the EU.

 

In relation to stock markets, the requirements include a high level of investor protection and preventing insider trading.

 

The significance of an equivalence decision is that the EU investment firms can then trade on the exchanges of the country concerned.

 

Similar decisions were made at the end of 2017 for the United States, Australia and Hong Kong, along with Switzerland. The Switzerland decision had a time limit of a year. It was then extended for six months but has now expired.

 

Does this have any implications for Brexit?

 

It might do.

 

Finance is a very important sector of the British economy and access to customers in the EU is valuable. It is also useful for EU investment firms to be able to trade on the London Stock Exchange.

 

Many firms hope that equivalence will enable them to continue to deal with the EU after the UK is no longer a member.

 

This is much wider than the specific issue about stock markets that the EU and Switzerland have acted on.

 

The European Commission has made equivalence decisions on insurance, credit rating and auditing among other areas.

 

What the Switzerland row shows is that the EU, and the Commission in particular, are prepared to use equivalence in a negotiation. If they feel it can be useful in applying pressure to the negotiating partner, they are apparently willing to use it.

 

And of course Britain is likely to be on the other side of the table at some stage in the not too distant future, with some important businesses that could be hurt by an adverse decision on equivalence.--BBC

 

 

 

How do you know your diamond isn't fake?

Fake and irresponsibly sourced diamonds are undermining confidence in the industry - sales are down. Can new technologies, such as laser etching and blockchain, reassure an increasingly sceptical public?

 

In a lab in the California city of Carlsbad, between Los Angeles and San Diego, a suspicious diamond recently arrived.

 

On the outer edge - what jewellers call the girdle - was a tiny inscription, of a bona fide diamond security code issued in 2015.

 

But the font was different to the one Gemological Institute of America, or GIA, uses.

 

And whereas the original diamond was natural, this diamond was grown in a lab.

 

"Rarely do we encounter the type of blatant fraud described here," say Christopher Breeding and Troy Ardon from the Carlsbad lab.

 

Carlsbad is the headquarters of the GIA, a non-profit organisation that evaluates and certifies diamonds for quality.

 

It assigns diamonds report numbers, which a laser can then carve on to the diamond. But this method has its problems.

 

"It is easy to be removed, just polish it off," says Andrew Rimmer, chief executive of Opsydia, an Oxford University spin-out. "Also it's easy to apply someone else's serial number."

 

 

So Mr Rimmer has been working on lasers that can write security codes beneath the surface of diamonds instead.

 

And codes inside diamonds are forever.

 

Diamonds are a huge business, with 133 million carats (about 27 tonnes) of rough diamonds worth about $15bn-$16bn (£12bn-£13bn) mined each year, according to Boston consulting firm Bain & Company.

 

About half originate in Africa, where in some countries, like South Africa and Botswana, mining is well regulated.

 

But Zimbabwe, under President Mugabe, used diamond exports to fund its repressive secret police.

 

And last year, three Russian journalists were killed while investigating the Kremlin's links to militias in the Central African Republic who fund their fighting with diamond sales.

 

Synthetic diamonds are also an issue for the industry - adverts have appeared on China's Alibaba e-commerce site with documentation stating they are natural.

 

Such concerns have taken the shine off diamond sales in 2019.

 

In response, many people in the diamond industry have been working on using the blockchain - a tamper-proof distributed ledger - to store information on a gem's history, from the mine to the jewellery shop.

 

Examples are Australia's Everledger and De Beers' Tracr. Russian diamond mining giant Alrosa announced last autumn it will join the Tracr platform.

 

 

So it will be possible to "provide clients with a full history of a diamond, starting from the moment it was mined", says Alrosa's Eugeniya Kozenko.

 

"We can create lots of apps along the way" that draw on the blockchain, says Jim Duffy, chief executive of Tracr.

 

The hardest bit has involved creating robots for producers to use to scan diamonds at scale, and machine-learning algorithms to automate identifying the diamonds, Mr Duffy says.

 

De Beers also has launched a GemFair programme to log diamonds produced by small-scale African miners, says Michillay Brown, partner relations specialist at Tracr.

 

The programme started with "artisanal and small-scale diamond miners in Sierra Leone", and helps them record GPS locations for each diamond they find, which they then place in a QR-coded tamper-proof bag, she says.

 

 

In another sign that the sector is warming to blockchain tech, Lucara Diamond, a Canadian mining company, bought a blockchain business called Clara last year.

 

Their diamonds will "get scanned shortly after they're recovered from the mine, and put on blockchain," says John Armstrong, Lucara's vice president for technical services.

 

Putting a full account of a diamond's provenance on to a blockchain offers an "extremely secure way of storing detailed information", says Opsydia's Mr Rimmer. "But you still need to make sure the stone is the one it purports to be."

 

So how can you write a permanent, tamper-proof security code inside a diamond?

 

With difficulty would seem to be the answer. Diamond has a high refractive index, meaning it bends light a lot.

 

One of Alrosa's deep diamond mines in the Yakutia region of eastern Siberia, Russia

"So whichever direction you want a laser to go, usually it goes somewhere else," Mr Rimmer explains.

 

Engineers at Oxford were doing research around getting the highest possible resolution from telescopes, and compensating for fluctuations in the atmosphere.

 

And this turns out to produce answers that also apply to focusing lasers on targets that are very small.

 

So marks as small as one-thousandth of a millimetre can be made 0.15mm below a diamond's surface in a trillionth of a second. The extremely high speed keeps the laser burst from heating up the stone.

 

Marks this small can't be seen even with a jeweller's magnifying glass, or loupe. You need a powerful microscope.

 

 

And since they're so tiny, they don't have to be on the outside girdle, which is covered up when the diamond is placed in jewellery, but can be in the top surface or around the crown where they can always be read.

 

Opsydia has just sold it first machines to De Beers.

 

But once you can write things inside diamonds, "you can write electrical circuits; it takes you into science instrumentation and ultimately quantum computing," says Mr Rimmer.

 

Maintaining trust in the authenticity and provenance of diamonds is essential to keep an increasingly sceptical public buying.

 

Ajay Anand, founder of New York-based Rare Carat, built a platform that pulls in data on diamonds for sale from both big and small retailers.

 

 

He realised that "diamonds are the perfect data set for machine learning and price prediction".

 

There are about 30 or 40 variables associated with any diamond, he says.

 

"So we put together the largest data set probably in existence - our algorithms can predict the price of a diamond pretty accurately," he says.

 

The platform tells customers how good a bargain it thinks a particular diamond is.

 

And "we're empowering dozens of smaller online and local retailers, with lower overhead costs," but who might struggle to get customers through the door, he says.

 

The industry will be hoping that these new marking, tracing and buying technologies will ensure diamonds never lose their lustre.--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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