Major International Business Headlines Brief::: 16 July 2019

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Major International Business Headlines Brief::: 16 July 2019

 


 

 


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*  Abruptly appointed Zambian finance minister to review sales tax plan

*  South Africa's rand, stocks boosted by global risk-on sentiment

*  Saudi SAMI continues partnership talks with S.Africa's Denel after rebuff

*  Nigerian consumer inflation falls to 11.22% in June –stats office

*  Tanzania's central bank sacks CEO of state-run bank

*  Zambia dollar bonds soar after president swaps finance minister

*  Vivendi's Canal+ acquires African film studio ROK

*  Treasurer of South Africa's Eskom quits in latest high-profile departure

*  Facebook's Libra could be misused, says treasury chief Mnuchin

*  E-cig boss says sorry to parents over child vaping

*  Boeing ditches 737 Max name on new Ryanair plane

*  Amazon workers launch protests on Prime Day

*  Sports Direct delays results as House of Fraser trading 'uncertain'

*  China's economy grows at slowest pace since 1990s

*  Trade negotiators wanted to fill Brexit gap

 

 


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Abruptly appointed Zambian finance minister to review sales tax plan

LUSAKA (Reuters) - Zambian President Edgar Lungu abruptly fired his finance
minister on Monday, appointing in her place the respected deputy head of the
central bank, who said he might further delay a sales tax designed to
rebalance its economy.

 

New minister Bwalya Ng’andu, seeking to mend fences with the country’s
powerful mining industry in the face of calls from the IMF to shrink a hefty
debt pile, said addressing budgetary issues would be his first challenge.

 

President Edgar Lungu sacked his predecessor Margaret Mwanakatwe hours
earlier without giving a reason. There was no immediate comment from
Mwanakatwe.

 

The early market response to Lungu’s actions was positive, and Chibamba
Kanyama, an economist with local brokerage Bridges, said the president was
looking to reassure investors by appointing an experienced executive who has
also held senior posts in commercial banking.

 

The 9% across-the-board tax on sales of goods and services, which was
originally due to be introduced in April, would help rein in the external
debt of Africa’s second largest copper producer, which hit $10.05 billion at
the end of 2018, and a fiscal deficit running at 7.5% of gross domestic
product.

 

But the government postponed it until September for further consultation,
and Ng’andu said that deadline would now also be reviewed.

 

“We need to restore the fiscal health of the economy,” he said during his
swearing-in ceremony. “We will look at whether it is prudent to implement
...(the new tax) three quarters into the year.”

 

It has become the latest focal point in a dispute between the government and
the miners.

 

Zambia’s Chamber of Mines says the tax, combined with other levies imposed
specifically on the industry, will stymie investment, push some producers
into the red and lead to the loss of 100,000 tonnes of copper production
this year.

 

The International Monetary Fund, meanwhile, has repeatedly warned that
Zambia’s high debt and shrinking foreign exchange reserves leave its economy
vulnerable.

 

Ng’andu said he would also press ahead with austerity measures embarked upon
by Mwanakatwe, including a moratorium on the issuance of new debt.

 

Bridges’ Kanyama said investor concerns had risen that Zambia had appeared
unconcerned about reigning in its soaring deficits.

 

While Ng’andu - whose previous posts also include managing director of the
Development Bank of Zambia - had limited exposure to the fiscal side of the
economy, he “has the capacity to gain the respect of various stakeholders
who include cabinet ministers as well as donors and the IMF,” the economist
said.

 

Zambia’s dollar-denominated government bonds jumped after news of his
appointment.

 

The government is also embroiled in an ownership dispute over a copper mine
with Mumbai-listed Vedanta, which has sparked concerns among international
investors that it might nationalise some of the country’s natural resources.

 

Mark Bristow, CEO of Barrick Gold Corp, told Reuters the company looked
forward to engaging with the new minister, adding it had already had a very
constructive discussion with the minister of mines over the new taxes.

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

South Africa's rand, stocks boosted by global risk-on sentiment

JOHANNESBURG - South Africa’s rand firmed on Monday as bets the Federal
Reserve will cut interest rates next week continued to boost the currency in
the absence of any local economic drivers, on a day dominated by
ex-president Jacob Zuma’s testimony at a graft inquiry.

 

At 1700 GMT the rand was 0.45% firmer at 13.8975 per dollar from a Friday
close of 13.9600.

 

Investors expect the Fed to reduce its key rate by 25 basis points and make
another cut in September. Lower yields in the United States boosts demand
for riskier high yielding assets like the rand.

 

Stronger-than-expected economic data from China also spurred risk bets. The
world’s no.2 economy reported industrial output rebounded in June from a
17-year low in May, while June retail sales surged 9.8% from a year earlier.

 

The rand rallied to a five-month high of 13.8200 last week but technical
resistance near 13.80 may stall its advance.

 

“Some of that momentum will start to dissipate and it may well require a
fresh catalyst of sorts to assist the rand in making back more lost ground,”
analysts at Investec said in a note.

 

“From a valuation perspective, the ZAR still finds itself undervalued and
capable of recovering still further.”

 

Bonds firmed, with the yield on the benchmark 2026 government issue down 5
basis points at 8.04%.

 

Former president Zuma struck a defiant tone at the public inquiry into
maladministration during his nine-year tenure, saying he was the victim of a
“character assassination” by enemies who had tried to get rid of him for
more than 20 years.

 

Zuma, who was pushed out by the governing African National Congress (ANC) in
February 2018 and replaced by President Cyril Ramaphosa, is seen to still to
yield power inside the party, particularly with the faction opposing
Ramaphosa’s reform agenda.

 

Zuma has consistently denied wrongdoing.

 

On the bourse, stocks rose following encouraging production data out of
China on Monday boosting emerging markets.

 

The benchmark JSE Top-40 Index was up 0.5% to 51,447.25 points while the
broader All-Share Index crept up 0.27% to 57,432.75 points.

 

Tech heavyweight Naspers was among the leaders on the blue-chip index,
jumping 2.43% to 3,488.61 rand after strong gains by internet company
Tencent Holdings where it holds a 31 percent stake.

 

Among the losers pharmaceuticals company Aspen tumbled 3.77% and luxury
goods firm Richemont dipped 1.49%.

 

“[The rand is] fairly strong at the moment ... that’s amongst the strongest
levels we’ve seen in a month and that will be weighing on some of the
rand-centred stocks,” said trader at GT247 Nilan Morar.

 

 

 

Saudi SAMI continues partnership talks with S.Africa's Denel after rebuff

DUBAI (Reuters) - Saudi Arabia’s state defence company is continuing to hold
commercial partnership talks with South Africa’s Denel which said this month
it would not sell a stake to the Saudi firm.

 

Denel Chief Executive Danie du Toit told Reuters the state-owned company was
open to partnerships but would not sell equity or relinquish intellectual
property rights to SAMI, which last year made a $1 billion bid for a broad
partnership.

 

“We have ongoing talks,” Saudi Arabian Military Industries (SAMI) Chief
Executive Andreas Schwer told Reuters on Monday.

 

“Acquiring a stake is just one option but various options are still there.”

 

He said that included partnering on programmes or working on greenfield
projects.

 

SAMI, established in 2017, is mandated to develop a commercially sustainable
defence industry in Saudi Arabia.

 

It has signed over two dozen agreements with international companies to
develop the domestic industry, and this month it was announced SAMI would
collaborate with South African private defence firm Paramount Group.

 

Saudi Arabia and its allies account for almost half of South Africa’s recent
arms exports and a significant portion of future orders.

 

 

 

Nigerian consumer inflation falls to 11.22% in June –stats office

LAGOS (Reuters) - Annual inflation in Nigeria stood at 11.22% in June,
compared with 11.40% in May, the National Bureau of Statistics said on
Monday.

 

A separate food price index showed inflation at 13.56% in June, compared
with 13.79% the previous month.

 

 

 

Tanzania's central bank sacks CEO of state-run bank

DAR ES SALAAM (Reuters) - Tanzania’s central bank has removed the chief
executive of the state-run TIB Corporate Bank with immediate effect, citing
poor performance of the financial institution.

 

 

    Tanzanian lenders are facing increased supervision after a surge in
non-performing loans eroded capital and dampened profits.

 

    “The Bank of Tanzania has decided to suspend the appointment of Frank
Nyabundege as managing director of TIB Corporate Bank ... following
unsatisfactory performance of the bank,” the central bank said in a
statement late on Saturday.

 

    “This measure has been taken to improve the oversight and performance of
banks owned by the government.”

 

    Nyabundege was not immediately available for comment.

 

    The central bank said it has appointed one of its officials to oversee
the affairs and daily business operations of TIB Corporate Bank in acting
capacity as managing director.

 

    “Bank of Tanzania would like to inform the public that TIB Corporate
will continue to provide all banking services, including payment of matured
obligations,” it said.

 

    Tanzania’s central bank has revoked the licenses of at least nine banks
since 2017 and has shut down dozens of foreign exchange bureaus, saying the
move was aimed at safeguarding the stability of the financial services
sector.

 

    This comes after President John Magufuli ordered the regulator to take
tough action against failing financial institutions.

 

    In December, the International Monetary Fund said nearly half of
Tanzania’s 45 banks were vulnerable to adverse shocks and risked insolvency
in the event of a global financial crisis.

 

 

 

Zambia dollar bonds soar after president swaps finance minister

LONDON (Reuters) - Zambia’s dollar-denominated government bonds jumped on
Monday after the country’s president sacked Finance Minister Margaret
Mwanakatwe and appointed central bank deputy governor Bwalya Ng’andu to
replace her.

 

Zambia’s 2024 and 2027 issues, which trade at stressed levels of around 70
cents in the dollar, jumped more than 2.2 cents, according to data from
Refinitiv. The 2022 bond climbed 1.4 cents.

 

Ng’andu will take over the management of an economy the International
Monetary Fund has repeatedly warned is struggling with high debts and
shrinking foreign exchange reserves.

 

 

 

Vivendi's Canal+ acquires African film studio ROK

LAGOS (Reuters) - French pay-TV group Canal+ has acquired African film and
television studio ROK, marking the first international acquisition in
Nigeria’s film industry, popularly known as Nollywood.

 

Lagos-based ROK, which announced the deal on Monday, owns a large library of
films and animation series in Nigeria and produces movies and TV series for
distribution platforms.

 

Nollywood is one of the world’s biggest film production hubs and Canal+,
owned by Vivendi, aims to expand in Africa as stiff competition from
streaming services such as Netflix and Amazon has caused the group to lose
subscribers in France.

 

With more Africans buying TVs - and streaming services not widely accessible
due to relatively high data costs - the continent is fertile ground for
satellite pay-TV companies to provide original content and generate customer
loyalty.

 

“ROK will produce thousands more hours of Nollywood content to deliver
movies and original TV series for Canal+ Group’s audiences,” ROK said in a
statement. It did not say how much Canal+ had paid for the company.

 

Under the deal, Canal+ acquired ROK’s production, content distribution and
publishing channels, from IROKO Ltd, Africa’s digital content distributor
for Nigerian films. ROK founder Mary Njoku will continue as general director
of ROK Productions.

 

ROK will produce Nollywood content for Canal+ group’s French-speaking
African audience, to be distributed via IROKO’s subscription video on demand
app.

 

Last year, Vivendi said that Canal+ aimed to add 1.5 million African
subscribers by 2020 to bring the total to about 5 million, up from 1 million
five years ago.

 

Rights to European and African soccer have long been a draw in Africa and
Canal+ has invested heavily in locally produced content.

 

IROKO incubated ROK in 2013 and has produced over 540 films and 25 original
TV series in Africa. It said ROK reaches 15 million subscribers on satellite
TV services on the continent.

 

 

 

Treasurer of South Africa's Eskom quits in latest high-profile departure

JOHANNESBURG (Reuters) - The group treasurer of South Africa’s Eskom, Andre
Pillay, will leave the power utility at the end of August, it said on
Monday, the latest high-profile exit after its chief executive quit earlier
this year.

 

Eskom supplies more than 90% of South Africa’s electricity, but has
implemented severe power cuts this year and is failing to generate
sufficient profit.

 

It is hinging its recovery hopes on a 230 billion rand ($16 billion) bailout
pledged by government in February.

 

 

 

 

 

With hip hop and bumper home loans, big banks target South Africa's youth

JOHANNESBURG (Reuters) - South Africa’s biggest banks are betting cut-price
accounts, big mortgages and offers on everything from Adidas backpacks to
Xboxes will help them win over the youth market, which many overlooked until
it was targeted by a host of start-up rivals.

 

An ageing client base and competition from old and new, tech-savvy rivals
with lower-cost offerings have forced the big four banks to drop their fees
and invest in propositions that especially appeal to upwardly mobile youth.
Absa is considering offering first-time buyers a mortgage worth more than
the value of their home, while FirstRand will launch a no- or low- monthly
fee account for students.

 

They join Standard Bank and Nedbank in weighing more mortgage risk or
accepting lower fee revenues in order to attract younger customers.

 

All four are being thrashed in the youth market by rival Capitec, which
serves around 45% of the 15-24 year old market and over 40% of 25-34 year
olds, according to an estimate of the banks’ market shares based on a 2017
Publisher Audience Management Survey (PAMS) provided to Reuters by market
research firm Eighty20.

 

Newer lenders like TymeBank are also threatening to lure even more young
customers with fee-free, app-based banking.

 

Executives at Absa and FirstRand said that while not especially profitable,
the youth market is key to the sustainability of their customer bases.

 

“It’s not about the numbers per se but it’s about finding the right
customers that are upwardly mobile and attractive in terms of the strategy,”
said Christoph Nieuwoudt, head of consumer banking at FirstRand’s retail
unit, First National Bank (FNB).

 

The lender had previously left a “huge gap” in the student market but wanted
to make a comeback, he continued. FNB said its new student offering would
combine a digital account, bundled mobile data, deals on third-party
products and services and either low or no monthly fees.

 

LIFESTYLE OFFERS

Analysts said the banks appeared to be waking up to the fact that a number
of their customer bases are skewed towards older age brackets, and if they
do not start attracting younger clients again they would have to wrestle
them away from rivals later or quickly lose relevance.

 

“The same thought process seems to be playing out at all the big banks,”
Ilan Stermer, banks analyst at Renaissance Capital, said.

 

Based on responses to the PAMS survey, which asked participants which banks
they had an account or card with, around 34% of Absa’s customer base is 50
years old or older, compared with 24% at FNB, 25% at Standard Bank and 26%
at Nedbank.

 

Absa, which already offers a low-fee student account, is planning to launch
a mortgage product aimed at customers in their early- to mid-20s in the
third quarter, Geoff Lee, managing executive of home loans in its retail
unit, said.

 

As part of this it could offer - with strict criteria - mortgages worth more
than the house itself to cover transaction costs. Standard Bank, which
started offering an account aimed at 16-23 year olds and combining banking
and “lifestyle” offers last year, has also recently started offering
mortgages worth 104% of a house’s value to certain first-time buyers.

 

The moves follow Nedbank’s April launch of a digital, zero monthly fee
account aimed at under 25s, promoted by a local rapper, and offering career
help, DJ and photographer bookings, and deals on everything from fashion and
technology to ride-hailing.

 

For years, the big banks have struggled to grow lending in a weak economy
with high levels of household debt. But with players like TymeBank growing
fast - it acquired 400,000 customers in four months - executives said the
youth market was too important to pass up.

 

“You can’t have a customer base that dies on you,” said Cowyk Fox, managing
executive of everyday banking at Absa, adding that the youth market is
growing fast and has better opportunities two decades after the end of
apartheid.

 

 

 

Facebook's Libra could be misused, says treasury chief Mnuchin

Facebook's planned Libra cryptocurrency faced further opposition on Monday
when the US treasury secretary warned about its potential criminal use.

 

Steven Mnuchin told a press conference it could be used by "money launderers
and terrorist financiers" and said it was a national security issue.

 

He was "not comfortable" about Libra, joining President Donald Trump and the
US central bank in voicing concern.

 

Facebook executives will appear before a congressional committee on Tuesday.

 

David Marcus, who will oversee Libra, is expected to tell the Senate Banking
Committee that Facebook will not launch the currency until regulatory
concerns are addressed.

 

Carney gives Facebook currency cautious welcome

Facebook urged to pause currency project

Mr Mnuchin said Libra would have to convince financial regulators it has
high privacy standards.

 

He declined to comment on any regulatory timeline for Libra, but said he was
"not comfortable today" about digital currency and that Facebook was a "long
way away from" securing approval.

 

Cryptocurrencies generally "have been exploited to support billions of
dollars of illicit activity like cyber crime, tax evasion, extortion,
ransomware, illicit drugs and human human trafficking," Mr Mnuchin said.

 

Failure to act

Last week, Mr Trump tweeted that he was "not a fan" of cryptocurrencies, and
hinted that Facebook might need a banking licence.

 

Jerome Powell, head of the Federal Reserve, also said last week that Libra
raises many serious concerns.

 

The tech giant, which hoped to launch Libra next year, has said it
"anticipated critical feedback" and is keen to have "conversations" with
officials and regulators.

 

In prepared testimony released on Monday ahead of Tuesday's senate hearing,
Mr Marcus said: "The Libra Association, which will manage the [Libra]
reserve, has no intention of competing with any sovereign currencies or
entering the monetary policy arena.

 

"Monetary policy is properly the province of central banks," he said.
"Facebook will not offer the Libra digital currency until we have fully
addressed regulatory concerns and received appropriate approvals."

 

Mr Marcus said the US must lead innovation in digital currencies, adding:
"If we fail to act, we could soon see a digital currency controlled by
others whose values are dramatically different."--BBC

 

 

 

E-cig boss says sorry to parents over child vaping

The boss of e-cigarette giant Juul has apologised to parents amid worries of
an epidemic of vaping among children.

 

"I'd tell [parents] I'm sorry their child's using the product. It's not
intended for them," Kevin Burns said.

 

The apology, made in a US television documentary being aired on Monday, was
dismissed as fake and deceptive by an anti-smoking group.

 

Juul, which has begun a marketing push in the UK, is trying to cut teenage
use, but faces lawsuits from parents.

 

"I hope there was nothing that we did that made it appealing to [children],"
he says in the CNBC documentary: Vaporized: America's E-cigarette Addiction.

 

"As a parent of a 16-year-old, I'm sorry for them, and I have empathy for
them, in terms of what the challenges they're going through."

 

Addiction

Last month San Francisco became the first US city to ban vaping, making it
illegal for shops to sell the product and online firms to send it to
addresses there.

 

Mr Burns admitted that there still needs to be research into the long-term
impact of vaping. "Frankly, we don't know today. We have not done the
long-term, longitudinal clinical testing that we need to do," he said.

 

Last year, the US surgeon general Jerome Adams called vaping among US
teenagers "an epidemic". The Food and Drug Administration found that 21% of
school students vaped in 2018.

 

Stanford University paediatrics professor Bonnie Halpern-Felsher told CNBC
that children are at risk of addiction to Juul products because they contain
high levels of nicotine.

 

UK marketing drive

A young user told the documentary that, when she was 15, her Juul device was
always with her. "I would always just, like, hit it because it was just so
easy."

 

The company has tried to tackle use by children, including withdrawing from
sale its popular sweet and fruit flavours.

 

Juul has also shut its Facebook and Instagram account after being accused by
critics of marketing to young people. The company's early adverts featured
bright colours and young models.

 

In just four years since it started, Juul has grabbed 40% of the US vaping
market. Last year Marlboro-maker Altria paid $13bn for a 35% stake in the
company.

 

In a statement to the BBC, the Campaign for Tobacco-Free Kids' president
Matthew L Myers said the Juul apology was "following the tobacco playbook".

 

"Proclaim loudly that they don't want kids to use their product, while never
admitting that their marketing targeted and attracted kids... There can be
no doubt Juul's role in the current youth epidemic."

 

This month, Juul began a 12-week marketing campaign in the UK to encourage
tobacco smokers to make the switch to vaping. The campaign features adult
smokers, and billboard advertising will be at least 200 metres from schools.

 

Mr Burns told the documentary that Juul has had a "significant impact" on
driving down traditional tobacco use in the US.--BBC

 

 

 

Boeing ditches 737 Max name on new Ryanair plane

A Boeing 737 Max due to be delivered to Ryanair has had the model's name
changed on the nose of the aircraft, it has emerged.

 

Photos shared on Twitter show a plane in Ryanair colours outside Boeing's
manufacturing base, with the name 737 Max replaced by 737-8200.

 

It has fuelled speculation that the troubled Max will be rebranded after two
fatal accidents led to a worldwide grounding.

 

Boeing and Ryanair have yet to comment.

 

No Max planes have flown since March after issues with its software were
linked to crashes in Indonesia and Ethiopia, which killed 346 people.

 

Ryanair has 135 of the controversial Boeing models on order, the first five
of which are due for delivery this autumn.

 

Before-and-after images of one of the Ryanair planes have been posted on
Twitter account Woodys Aeroimages, which tracks Boeing production. The
images show the Ryanair plane, a larger version of the Max 8, at Boeing's
Renton plant in Washington state.

 

The tweets claimed the pictures showed the original model name had been
dropped.

 

Boeing itself has not ruled out rebranding the 737 Max in future, while
others have already taken to referring to it by another name.

 

Families 'cheated of Boeing crash compensation'

Boeing loses big order for 737 Max aircraft

At the Paris airshow last month, International Airlines Group, which owns
British Airways, announced plans to buy 200 Max planes at a discount,
referring to them as "B737 aircraft".

 

Boeing has yet to convince regulators that updates to its software are
enough to ensure the Max's safety.

 

And last month the US Federal Aviation Administration, which must reapprove
the jets for flight, uncovered a new flaw that Boeing estimates will take
until at least September to fix.

 

On Sunday, American Airlines said it was extending for a fourth time
cancellations of about 115 daily flights. The cancellations will now
continue into early November due to the ongoing grounding of the 737 Max.

 

However, the firm added: "American Airlines remains confident that impending
software updates to the Boeing 737 MAX, along with the new training elements
Boeing is developing in coordination with our union partners, will lead to
recertification of the aircraft this year."--BBC

 

 

 

Amazon workers launch protests on Prime Day

Thousands of workers in Amazon sites around the world are staging protests
about pay and conditions as the online retailer begins its annual sale.

 

On Monday, Amazon starts offering discounts to its Prime service members.

 

Unions say that 2,000 workers are on strike in Germany, while in the US,
workers in a Minnesota centre reportedly plan a six-hour stoppage. In the
UK, week-long protests are planned.

 

Amazon says it offers great employment opportunities.

 

William Stolz, a picker at a warehouse in the Shakopee warehouse in
Minnesota, told the BBC that workers wanted "safe, reliable jobs" from
Amazon.

 

He says he has to pick an item about every eight seconds, or 332 per hour,
for a 10 hour day.

 

"The speeds that we have to work are very physically and mentally
exhausting, in some cases leading to injuries," he said.

 

Staff at Amazon's Swansea warehouse 'treated like robots'

Amazon at 25: The story of a giant

"Basically we just want them to treat us with respect as human beings and
not treat us like machines," he said.

 

Prime Day begins on Monday, but actually lasts 48 hours. The Seattle-based
retailer, founded by Jeff Bezos, says new deals will launch as often as
every five minutes "giving shoppers plenty of reasons to come back again and
again".

 

One of the most valuable public companies in the world - making Mr Bezos the
world's richest man - Amazon rang up total sales of $235bn (£188bn) of
online sales last year.

 

In Germany, where Amazon employs 20,000 people, labour union Verdi said more
than 2,000 workers at seven sites had gone on strike under the logo "no more
discount on our incomes".

 

"While Amazon fuels bargain hunting on Prime Day with hefty discounts,
employees are being deprived of a living wage," said Orhan Akman, retail
specialist at Verdi.

 

In the UK, GMB union officials handed leaflets to workers arriving at the
site in Peterborough in the East Midlands, and in the coming days protests
are expected at other sites such as Swansea and Rugeley, in the West
Midlands.

 

Mick Rix, GMB national officer, said: "Amazon workers want Jeff Bezos to
know they are people not robots. It's prime time for Amazon to get round the
table with GMB and discuss ways to make the workplaces safer and to give
their workers and independence voice".

 

While the GMB was not calling on shoppers to boycott Amazon, he said
customers could act.

 

"We're not calling for economic damage for Amazon," he said. "What we're
asking for is for people to be aware. Leave feed back on Amazon".

 

In response, Amazon said it "provided great employment opportunities with
excellent pay".

 

It encouraged people to compare its operations in Shakopee with other
employees in the area.

 

In the UK, where it employs 29,500 people, a spokesperson said the company
offered industry-leading pay starting at £9.50 per hour and was the
"employer of choice for thousands of people across the UK".

 

It said its German operations offered wages "at the upper end of what is
paid in comparable jobs" and it was "seeing very limited participation [in
strikes] across Germany with zero operational impact and therefore no impact
on customer deliveries".

 

In total, Amazon has a global workforce of 630,000, with 300,000 in the
US.--BBC

 

 

Sports Direct delays results as House of Fraser trading 'uncertain'

Shares in Mike Ashley's Sport Direct have fallen sharply after it delayed
its results, citing uncertainty about trading its House of Fraser chain.

 

The company, whose results were due on Thursday, added the delay was also
due to its auditor, Grant Thornton, facing increased scrutiny of its work
for Sports Direct.

 

Sports Direct also indicated that it may not achieve its profits forecast.

 

The firm's results will now be released between 26 July and 23 August.

 

In December, when Sports Direct published its half-year results, it said
that, excluding House of Fraser, operating profits were expected to grow by
between 5% and 15%.

 

But in its latest update, the company said: "There are a number of key areas
to conclude on which could materially affect the guidance given in Sports
Direct announcement of 13 December".

 

Around that time, Mr Ashley had described trading as "unbelievably bad".

 

Mike Ashley - thwarted saviour of Debenhams or serial sinner?

Trading has continued to be difficult for retailers. The British Retail
Consortium said on Monday that there had been a "summer slump", with
footfall on High Streets in June dropping 2.9%.

 

News of the delay in Sports Direct's results sent its shares down 15% at one
stage to a seven-year low, although they ended the day almost 10% lower.

 

 

Mike Ashley owns huge swathes of the High Street, although not all through
Sports Direct in which he owns a 62% stake.

 

As well as buying House of Fraser for £90m last year - saying he wanted to
turn it into the "Harrods of the High Street" - he has also bought Evans
Cycles and owns several sportswear brands, the upmarket clothing outlets
Flannels and Cruise, as well as lingerie firm Agent Provocateur.

 

His expansion efforts continued on Monday when Sports Direct also announced
it was close to taking control of Game Digital.

 

But his ambitions are not always achieved. Earlier this year, he had tried
to have himself installed as chief executive of Debenhams, but instead had
his stake in the chain wiped out when the retailer was rescued by its
lenders.

 

Mr Ashley has also failed to take over music retailer HMV and pulled out of
the bidding for Patisserie Valerie.

 

Goals Soccer Centres, the five-a-side football operator in which Sports
Direct has an 18% stake, has had accounting issues and issued profits
warnings.

 

Overstretching?

Analysts at the stockbroker Peel Hunt are concerned the acquisition spree is
putting too much pressure on management.

 

"Let's be clear: we think Mike Ashley is a genius when it comes to sports
retail. No doubt about it," they say in a research note.

 

"However, to make an analogy, he's trying to coach the England football team
whilst running the netball, the tennis and the chess team as well.

 

"Unfortunately for him, his key lieutenants are starting to jump ship: Karen
Byers, who has been instrumental in the growth of the core business, has
left and that is another savage blow," they added.

 

Cameron Olsen, company secretary, who worked for Mike Ashley for 15 years,
is also leaving, according to reports.

 

"House of Fraser is clearly in a degree of disarray, it would appear that
the finance department is under-staffed to cope with the array of
acquisitions, and we are also concerned about the direction of the core
business," the Peel Hunt analysts said.

 

Independent retail analyst Nick Bubb described the announcement from Sports
Direct about the delay to its results as "devastating".

 

"The company hasn't updated the City since its interims in December and
House of Fraser is clearly a disaster area, so this is a serious situation,"
he said.

 

As well as citing the "complexities of integration into the company of House
of Fraser", as one the factors behind the delay to its results, Sports
Direct also pointed to "increased regulatory scrutiny of auditors".

 

Sports Direct said that other companies' audits were also taking longer, and
Mr Bubb noted that Superdry has delayed its results earlier this month due
to complexities in the figures.

 

The accounting regulator, the Financial Reporting Council, had looked into
Grant Thornton's audit of Sports Direct's 2018 results as part of its annual
review process.

 

The regulator found that, overall, 50% of Grant Thornton's audits were below
the acceptable standard.

 

"These factors have led to a need for the company to compile more
information than in previous years," Sports Direct said.

 

"Sports Direct would note that its core principles in regards to its
financial statement are be conservative, consistent and simple," it
added.--BBC

 

 

 

China's economy grows at slowest pace since 1990s

China's economy grew at its slowest pace since the early 1990s in the second
quarter, official figures showed.

 

In the three months to June, the economy grew 6.2% from a year earlier. The
result was in line with forecasts.

 

China has moved to stimulate its economy this year by boosting spending and
delivering tax cuts.

 

The country is also fighting a trade war with the US which has hurt
businesses and weighed on growth.

 

The data released on Monday showed China's economic growth rate slowed from
6.4% in the first three months of the year.

 

US President Donald Trump tweeted that US trade tariffs were having "a major
effect" on the Chinese economy.

 

China's national statistics bureau said the figures pointed to a "complex
environment" both at home and abroad.

 

It said the economy had "performed within the reasonable range" in the first
half of 2019, but that it faced "new downward pressure".

 

The figures do show some impact from the trade conflict with the US. Growth
has probably slowed a little more than it would have done had China been
facing a more tranquil international commercial environment. The longer-term
picture, though, is one of an economy continuing a reasonably orderly and
intended slowdown in growth.

 

The average growth rate over the three decades to 2010 was 10%. The Chinese
leadership - and every economist I have ever heard expressing a view on this
- did not regard that as sustainable for the long term. The aim was to see
the economy less dependent on investment and exports and an increased role
for spending by consumers.

 

There has been some progress, though the rates of saving and investment
remain very high. There are dangers, however, notably the high level of
company debt. The authorities encouraged strong credit growth in the
aftermath of the global financial crisis. That has helped prevent a more
rapid and potentially disruptive slowdown, but at the price of creating
additional financial risks.

 

While China-watchers advise caution with Beijing's official gross domestic
product numbers, the data is seen as a useful indicator of the country's
growth trajectory.

 

Other data showed some signs of improvement in the world's second-largest
economy.

 

Industrial production rose 6.3% in June from a year earlier, while retail
sales rose 9.8% year-on-year - both above forecasts in Reuters polls.

 

Global impact

Slowing growth in China has raised concerns about the potential knock-on
effect on the global economy.

 

Earlier this year Beijing announced plans to boost spending and cut billions
of dollars in taxes in an effort to support the economy.

 

It has also moved to provide a liquidity boost by reducing the amount of
cash banks must hold in reserve.

 

Edward Moya, senior market analyst at Oanda, said the latest economic data
"shows the slowdown remains intact and markets should expect further
stimulus" from China's central bank later this year.

 

The US-led trade war is another factor weighing on growth.

 

"The trade war is having a huge impact on the Chinese economy, and with no
end sight as trade negotiations struggle for meaningful progress, we are
probably not near the bottom for China's economy," he said.

 

US-China trade war in 300 words

While both sides agreed to resume trade talks at a recent G20 summit in
Japan, they have already placed tariffs on billions of dollars worth of one
another's goods, hurting businesses and casting a shadow over the world
economy.--BBC

 

 

 

Trade negotiators wanted to fill Brexit gap

A new generation of UK trade negotiators is to be recruited in an
open-access scheme launched by International Trade Secretary Liam Fox.

 

It follows warnings of a shortage of experienced UK trade negotiators during
the Brexit process.

 

The training scheme is open to applicants from all backgrounds and levels of
qualifications - with the first recruits ready in two years.

 

The Liberal Democrats dismissed it as a "last-minute scramble".

 

Labour's Barry Gardiner said "only now is the secretary of state realising
that the UK needs trained negotiation staff".

 

Trade talks

At a launch event at the Harris Westminster Sixth Form school in London, the
international trade secretary said being a professional negotiator was a
"career option that hasn't really existed for two generations" - as
deal-making has been carried out by the European Union.

 

The training project, with an initial 12 places, is meant to begin filling
the gap, to provide enough home-grown professional negotiators for trade
talks for the Brexit process and beyond.

 

Mr Fox rejected the suggestion that this recruitment drive should have
happened earlier - saying his department has been expanding and building
capacity.

 

He said the new recruits would learn the practical skills of international
trade talks, including spending time abroad, and would be paid about £30,000
while training.

 

'We have no trade negotiators'

What trade deals has the UK done so far?

Fox blames MPs over Canada trade deal delay

"Young people can actually see what global trade looks like, that it's not a
cold negotiating room, it's how we get market access, how we are helping
exporters to get into markets," said Mr Fox.

 

"There is no substitute for international experience."

 

Mr Fox said he wanted to "broaden the base" of those seeing trade
negotiations as a career, with no limits or qualifications required for
anyone wanting to apply.

 

"I think the wider we cast the net the better," he said, launching a project
separate from conventional graduate recruitment schemes.

 

Mr Fox said it was open to "as many of those youngsters who have the
aptitude, the enthusiasm and who've got the intuition to make a success of
it".

 

'Complicated business'

Two years ago the international trade secretary had claimed that
negotiations for a free trade agreement with the European Union "should be
one of the easiest in human history".

 

But he now describes trade negotiations as a "complicated business" - and
says the recruits will be given the intensive training they need.

 

The department's chief trade negotiation adviser, Crawford Falconer, said he
wanted to "demystify" the process of trade negotiations and "get rid of the
jargon".

 

Shadow international trade secretary Barry Gardiner said it was "another
case of too little, too late" and a "complete failure in office to prepare
the UK for what happens next".

 

Tom Brake, the Liberal Democrat spokesman on international trade, said those
who might be hired as negotiators were being "set an impossible task".

 

He said that Mr Fox had "failed to secure the substantial post-Brexit trade
deals he promised" - and the UK was at risk of missing out on the EU's trade
agreements with Japan and Canada.--BBC

 

 

 

 


 

 


 

INVESTORS DIARY 2019

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


Companies under Cautionary

 

 

 


 

 

 

 


Bindura Nickel Corporation

 

 

 


Padenga Holdings

 

 

 


Delta Corporation

 

 

 


Meikles Limited

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 


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