Major International Business Headlines Brief::: 26 July 2019

Fri Jul 26 04:14:16 CAT 2019

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Major International Business Headlines Brief::: 26 July 2019

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*  Kenya's central bank chief plays down impact of Rotich charges

*  De Beers curbs diamond supply as earnings drop

*  Moody's says new Eskom support credit negative for S.Africa

*  Tanzania to sell a million tons of maize and flour to Kenya

*  S.Africa's Momentum Metropolitan to buy Alexander Forbe's short-term
insurance unit

*  IMF says Egypt can draw final $2 bln from $12 bln loan program

*  Zambia finance minister sees 2019 GDP growth at 2.5%

*  Namibia plans to add 220 MW to electricity grid by 2023

*  South Africa's Vodacom Q1 revenue rises on international sales

*  Alphabet and Amazon rake in higher revenues

*  Eurozone prepares for interest rate cut as growth slows

*  Facebook rocked to its very foundations, says Clegg

*  Nissan to cut 12,500 jobs worldwide

*  Boeing warns it may stop 737 Max production

*  O2 to launch 5G network in UK in October

*  Samsung Galaxy Fold 'ready' for launch after screen fix

 <mailto:info at bulls.co.zw> 

Kenya's central bank chief plays down impact of Rotich charges

NAIROBI (Reuters) - Kenya’s central bank governor on Thursday dismissed the
market’s concerns about the impact of graft charges against the finance
minister and attributed this week’s fall in the currency to seasonal demand
for dollars.

The shilling has lost 0.8% since the charges against Henry Rotich were
announced on Monday, to trade at 104.05 per dollar on Thursday, as traders
fretted about a power vacuum at the finance ministry.

“I don’t know what a vacuum is in an institution like that. There are
processes. There are mechanisms in place, and those mechanisms are executed.
And it has to be done legally,” Patrick Njoroge, the central bank governor,
told a news conference.

President Uhuru Kenyatta appointed Labour Minister Ukur Yatani as acting
finance minister on Wednesday, a day after Rotich was charged with various
corruption charges. Rotich pleaded not guilty to the charges.

Njoroge attributed the shilling’s weakness this week to excess liquidity in
the money markets, which makes it cheaper to fund dollar purchases, and
increased hard currency demand from private companies.

“Some of the actors, those companies needed to make external payments,
meaning for instance you could think of a loan that has exhausted its grace
period,” he said.

Seasonal demand for dollars from companies to pay dividends to their
overseas shareholders had also contributed to the pressure on the shilling,
Njoroge said.

“We expect those imbalances will sort themselves out, we expect inflows,” he
said, referring to hard currency earnings from farm exports and tourism.

The shilling pared some of its losses in the afternoon session and after
Njoroge’s remarks, to trade at 103.60/80 per dollar.

“It is just a market correction. It is a return to sanity,” said a currency
trader at a commercial bank.

ECONOMIC GROWTH

The economy, East Africa’s largest, is likely to grow by at least 6% this
year, helped by a stronger-than-expected recovery in its key agriculture
sector, the governor said.

The economy grew by 5.6% in the first quarter, slowing from 6.5% in the same
period a year earlier, mainly due to the impact of dry weather.

But the rains unexpectedly came in late April, brightening the outlook for
the economy.

“We expect growth to remain strong. We are projecting 6% as a baseline, with
significant upside potential. So it can be stronger than 6%,” Patrick
Njoroge told a news conference.

The finance ministry says the economy is likely to grow by 6.3% in 2019, the
same rate as last year. Njoroge had said in May that the delayed rains could
cut as much as 0.4 percentage points off the ministry’s forecast.

 <mailto:info at bulls.co.zw> 

De Beers curbs diamond supply as earnings drop

LONDON (Reuters) - Anglo American’s diamond subsidiary De Beers is scaling
back production after trade tensions between the United States and China
contributed to a 27% first-half fall in diamond earnings, its CEO said.

De Beers CEO Bruce Cleaver cited a range of factors in an interview,
including trade tensions, the U.S. government shut-down that ended in
January and Hong Kong anti-government protests, which he said had left the
diamond market in a state “not dissimilar from 2014-15”.

The diamond market was weak in 2014-15 in the run-up to a deep commodity
price fall linked to declining Chinese demand for raw materials.

“A nasty cocktail is affecting the mid-stream, with too much polished
(diamonds), financial pressure from the banks and a slow down in demand for
jewellery,” he said.

But demand was still expected to grow in the U.S. market, the world’s
biggest, meaning stock levels should become more balanced in the second half
of the year, Cleaver said.

De Beers is working with its customers and limiting supply, the company
said. In the first half it reduced rough diamond production 11%
year-on-year.

While the diamond division fell, Anglo American on Thursday reported a 19%
increase in overall first-half underlying earnings before interest, tax,
depreciation and amortisation (EBITDA), largely because of high iron ore
prices.

The group cites future diamond demand as one of the principle risks it
faces.

De Beers has been fighting competition from laboratory-grown diamonds by
producing its own synthetic diamonds from its Element Six subsidiary at a
lower cost than peers.

The impact had been to reduce overall wholesale prices for laboratory-grown
diamonds by around 60%.

Cleaver said De Beers was still working to eliminate what he said was
customer confusion concerning the difference between mined diamonds and
those produced in laboratories.

De Beers is banking on a long-term future for natural diamonds and is
investing $468 million in a new vessel to mine diamonds off the coast of
Namibia.

Cleaver said the project was on track to add an estimated 500,000 carats per
year from 2022.

Moody's says new Eskom support credit negative for S.Africa

JOHANNESBURG (Reuters) - Rating agency Moody’s said the South African
government’s proposal to provide additional financial support to struggling
state-run power firm Eskom was “credit negative” for the sovereign as it was
a further drain on fiscal resources.

Eskom, which supplies more than 90% of South Africa’s power but had to
implement power cuts earlier this year, is grappling with high debt and has
needed cash injections to stay afloat.

Finance Minister Tito Mboweni this week tabled an appropriation bill in
parliament to give it an extra 59 billion rand ($4.25 billion) of government
support, but warned this combined with lower-than-expected tax revenues
could mean South Africa has to borrow more than planned.

Moody’s, the last of the three big international ratings agencies to have
South African debt at investment grade, said in an issuer comment published
late on Wednesday that the government’s room for manoeuvre was “extremely
constrained”.

“If passed, the additional support to ease the company’s financial pressures
would be credit negative for South Africa,” it said, adding that in the
absence of a clear turnaround plan for the utility there was a risk more
support would be needed.

In a worst-case scenario where none of the additional support is compensated
for, Moody’s said it expects South Africa’s fiscal deficit to widen to 5.7%
of GDP in 2019 and 5.6% in 2020, up from current projections of 5.2% and
5.0% respectively.

However, the government could take additional revenue or spending measures
in the next mid-year budget statement, expected in October, it added.

Eskom’s woes are a big problem for President Cyril Ramaphosa, who has staked
his reputation on fixing problems at a number of ailing state-owned firms,
cleaning up corruption and reviving Africa’s most developed economy.

But his efforts have faced numerous setbacks including ongoing troubles at
the power utility and still-sluggish growth.

($1 = 13.8900 rand)

Tanzania to sell a million tons of maize and flour to Kenya

DAR ES SALAAM (Reuters) - Tanzania will sell neighbouring Kenya one million
tons of maize and flour within a year to help curb a food shortage, a senior
agriculture ministry official said on Thursday.

“We have generally agreed to supply them with one million tons of maize
flour and grains throughout a year to help them end the prevailing food
shortage,” Hussein Bashe, the deputy minister of agriculture, told Reuters.

Officials from Tanzania and Kenya will meet next week to discuss the
details. The cereals board of Tanzania will oversee the deal, he said.

The first consignment of about 20,000 tons would be sold next month, he
added. Prices had been agreed but were not yet public, he said.

The deal follows a meeting between Tanzanian President John Magufuli and his
Kenyan counterpart Uhuru Kenyatta in Dar es Salaam this month.

A drought in parts of Kenya has hit the production of maize, a staple crop.

S.Africa's Momentum Metropolitan to buy Alexander Forbe's short-term
insurance unit

JOHANNESBURG (Reuters) - South African insurer Momentum Metropolitan is to
acquire the short-term insurance business of financial services group
Alexander Forbes for around 1.94 billion rand ($138.68 million), the two
companies said on Thursday.

Momentum Metropolitan said in a stock exchange statement that the unit was a
well-run insurance business with a stable and experienced management team,
and that there was a strong cultural fit for the unit within its broader
business.

($1 = 13.9894 rand)

IMF says Egypt can draw final $2 bln from $12 bln loan program

WASHINGTON (Reuters) - The International Monetary Fund said on Wednesday its
board completed the fifth and final review of Egypt’s $12 billion loan
program, allowing authorities in Cairo to draw another $2 billion in funds.

The disbursement will complete the amount approved under the three-year
extended fund facility program launched in November 2016.

“Egypt has successfully completed the three-year arrangement under the
Extended Fund Facility and achieved its main objectives,” IMF Acting
Managing Director David Lipton said in a statement. “The macroeconomic
situation has improved markedly since 2016, supported by the authorities’
strong ownership of their reform program and decisive upfront policy
actions.”

He said Egypt had met a 2018/19 primary budget surplus target of 2% of GDP,
and it would be important to maintain primary surpluses at that level to
keep public debt on a downward trajectory. Elimination of most fuel
subsidies will help in this regard while promoting energy efficiency, he
added.

A favorable economic outlook provides an opportunity to advance further
structural reforms to boost private sector growth and job creation, but
Lipton said more work was needed on reforming state own enterprises,
competition policy, public procurement and industrial land allocation.

“Deepening and broadening of effective reforms is critical to underpin the
positive outlook for growth and unemployment,” Lipton added.

Zambia finance minister sees 2019 GDP growth at 2.5%

LUSAKA (Reuters) - Zambia’s economy is projected to grow by around 2.5% this
year, down from an initial projection of almost 4%, Finance Minister Bwalya
Ng’andu said on Thursday.

Africa’s second-largest copper producer has encountered declining fiscal
space for developmental projects as most of its resources have been used on
debt servicing, Ng’andu added in a speech to an economic summit in
Livingstone in southern Zambia.

Ng’andu, a former deputy central bank governor appointed finance minister
this month, said the economy had been hurt mainly by adverse weather
conditions that had dampened agricultural and energy output, while tight
liquidity conditions had also hit businesses and economic activity.

The Zambian government needs to pay arrears to support private sector
growth, Ng’andu said.

Zambia’s external debt rose to $10.05 billion at the end of 2018, compared
with $8.74 billion a year earlier, raising fears that the southern African
country is headed for a debt crisis.

Zambia is trying to shrink a fiscal deficit that amounted to 7.5% of gross
domestic product last year.

Namibia plans to add 220 MW to electricity grid by 2023

WINDHOEK (Reuters) - Namibia’s power utility NamPower plans to add 220 MW in
new electricity capacity by 2023, as the uranium-producing southwest African
nation seeks to wean itself off imports, its managing director said on
Wednesday.

Namibia, which has installed capacity of 606 MW, is a net importer of
electricity mainly from neighbouring countries like Zambia and South Africa.

NamPower’s managing director Simson Haulofu said the utility would construct
wind, solar and biomass generators in the central and coastal regions to
deliver 150 MW.

Another 70 MW would be procured from independent power producers, Haulofu
said while launching NamPower’s business plan for the period 2019 to 2023 in
the capital, Windhoek.

Namibia is home to the Kudu Gas Fields, which have proven and probable
recoverable reserves estimated at more than 3.3 trillion cubic feet.

Demand for power in the diamond and uranium producing nation is expected to
rise to 755 MW in the next five years, according to the government.

South Africa's Vodacom Q1 revenue rises on international sales

JOHANNESBURG (Reuters) - South African mobile phone operator Vodacom Group
Ltd on Thursday reported a 4.2% rise in its first-quarter group revenue as
growth from its international business offset an anticipated lean
performance at local markets.

Group revenue rose to 21.5 billion rand ($1.55 billion) for the quarter
ended June 30, and service revenue was up 3.9% at 17.4 billion rand.

Despite the impact of cyclones Idai and Kenneth in Mozambique, international
service revenue increased by 19.6%, largely driven by a 42.7% increase in
revenue from Kenya’s Safaricom M-Pesa mobile financial services platform
M-Pesa and data demand, group Chief Executive Shameel Joosub said in a
statement.

($1 = 13.8752 rand)

Alphabet and Amazon rake in higher revenues

Google-parent Alphabet and the online retail giant Amazon have both reported
a near 20% rise in revenues for the latest quarter.

Alphabet said advertisers were spending more on its search and YouTube
services.

However Amazon reported profits that were lower than expected, as it invests
to speed up delivery times.

Both firms are under scrutiny from authorities in the US over their market
dominance, alongside other tech firms.

Amazon, which is shifting away from buying and selling products itself, and
focusing on its role as a marketplace for other merchants, reported revenues
for the latest quarter of $63.4bn (£51bn).

"Customers are responding to Prime's move to one-day delivery — we've
received a lot of positive feedback and seen accelerating sales growth,"
Jeff Bezos, Amazon founder and chief executive, said in Thursday's news
release.

Amazon's profit for the quarter, at $2.6bn, were below Wall Street's
expectations and the firm said profits would slip slightly in the current
quarter.

Will the US break up the tech giants?

Facebook 'rocked to its very foundations'

After-tax profits at Alphabet, the firm that owns YouTube and Google,
tripled compared to a year ago to $9.9bn, beating analysts' expectations.
Alphabet's revenues rose 19% compared to a year earlier, to $38.9bn.

Sundar Pichai, Google's chief executive, said both its traditional services
and new technology such as artificial intelligence were fuelling the firm's
growth.

"From improvements in core information products such as Search, Maps and the
Google Assistant, to new breakthroughs in AI and our growing cloud and
hardware offerings, I'm incredibly excited by the momentum across Google's
businesses," he said.

But the strong financial performance comes at time when regulators are
beginning to flex their muscles around the tech giants.

The EU has imposed three fines on Google over the last two years over
competition issues, totalling more than $9bn. Brussels has also just
launched an investigation into whether Amazon's use of data on its
marketplace breaches EU competition rules.

The US Department of Justice (DoJ) announced earlier this week it was
opening a broad investigation of major digital technology firms in what one
analyst described as a "major shot across the bows" of those companies.

While the DoJ did not identify specific firms by name, the scope of the
investigation is widely believed to include Alphabet and Amazon as well as
Facebook and potentially Apple.

The DoJ said its review would consider "whether and how market-leading
online platforms have achieved market power and are engaging in practices
that have reduced competition, stifled innovation or otherwise harmed
consumers".--BBC

Eurozone prepares for interest rate cut as growth slows

The European Central Bank has hinted it could cut interest rates to tackle a
slowdown in the eurozone economy.

It said a weak manufacturing sector and uncertainty about Brexit and trade
threatened to derail growth in the bloc.

The ECB, which kept interest rates on hold on Thursday, said it saw rates at
present or lower levels until mid-2020.

It is also considering other measures to support the eurozone, including
resuming quantitative easing.

This is when a central bank pumps money into the economy by buying up bonds
and other assets.

European Central Bank acts to boost struggling eurozone

Clouds gathering over global economy

Christine Lagarde resigns as head of IMF

Eurozone interest rates have been held near zero for years to stimulate
growth, and the bank had hoped to raise them gradually.

ECB boss Mario Draghi said there were some bright spots in the eurozone
economy, such as in services and construction, but added that "the outlook
is getting worse and worse", especially for manufacturing.

It blamed uncertainty caused by trade tensions and "the possibility of a
hard Brexit".

Eurozone inflation is also stuck well below its 2% target, while industrial
production in Germany, the bloc's biggest economy, is down.

The ECB has already thrown just about everything at the problem it faces -
inflation that is in its judgement persistently too low. And yes the ECB
does worry that inflation can be too low.

The constant changes taking place in any economy mean that the prices of
goods and different types of labour have to change relative to one another.
That's easier if it can be achieved without prices or wages having to fall
(in cash terms), so a bit of inflation can help that process.

A bit of inflation also gives interest rate policy some extra heft - it's
that bit easier to get REAL interest rates very low if prices are rising
moderately.

And though the ECB focuses publicly on its inflation objective, it is also
the case that growth in the Eurozone is not that strong. A bit of stimulus
MIGHT help, although the effectiveness of the unusual policies the ECB has
pursued - interest rates of zero and below, and massive quantitative easing
- is a matter of controversy.

"There is far and wide nothing to be seen of the second-half recovery hoped
for [in the eurozone] in many places," said Commerzbank economist Joerg
Kraemer. "Germany is in a grey area between a marked growth slowdown and a
recession."

The euro fell after the announcement, trading down about 0.31% against the
pound at 88.96p.

The ECB has already used up a lot of firepower in stabilising the eurozone
economy, pumping trillions of euros into the bloc through quantitative
easing.

However, experts say it is reaching the limits of what it can do.

The US Federal Reserve is also expected to announce a rate cut this Thursday
after warning of growing risks to the global economy.

Last week, boss Jerome Powell told US lawmakers that "uncertainties about
the outlook have increased", citing weakness in other major economies and
trade war worries.--BBC

Facebook rocked to its very foundations, says Clegg

Facebook has admitted that it was "rocked to its very foundations" by the
Cambridge Analytica scandal.

Facebook's head of global affairs, Sir Nick Clegg, told the BBC that it was
fair to say the company "hadn't done enough" in the past.

"But I don't think it's fair to say that the company did nothing," he said.

"Quite a lot of new measures have been introduced in recent years to keep
data safe and to try and protect people's privacy, but clearly not enough."

The social network is paying a record $5bn (£4bn) fine to settle privacy
concerns with the US Federal Trade Commission (FTC).

Facebook to pay record $5bn to settle privacy concerns

Will the US break up the tech giants?

Cambridge Analytica: The story so far

It follows allegations that Cambridge Analytica, a political consultancy,
improperly obtained the data of up to 87 million Facebook users in 2018.

Facebook has also agreed to pay the US Securities and Exchange Commission
(SEC) $100m to settle charges of making misleading disclosures regarding its
handling of user data.

There have been accusations that the FTC fine is a mere drop in the bucket
for Facebook, which reported better-than-expected quarterly revenues of
$16.9bn on Wednesday, up from $13.2bn for the same period in 2018.

Sir Nick said this was all part of the challenges facing Facebook in earning
back the public's trust.

"I totally accept that you could double, quadruple the fine and I expect
people would still say it's not enough," he said.

"I don't think people are going to take the assurances from Facebook that
all will be well in the future - I don't think words are enough."

The former deputy prime minister and leader of the Liberal Democrats said he
joined Facebook because he is convinced that the culture is changing and
that lawmakers need to have a serious conversation about "whether
data-intensive companies like Facebook allow other companies to share and
use data".

"Facebook was rocked to its very foundations by the Cambridge Analytica
allegations, and since then, well before the FTC settlement announced today,
Facebook has been trying to strike a better balance," he said.

"I think Facebook has learned the hard way that if you allow access to data
for developers and academics in a way that isn't properly controlled,
people's privacy can be abused."

However, Facebook's former chief security officer has given a different take
on the affair.--BBC

Nissan to cut 12,500 jobs worldwide

Japanese car giant Nissan has said it will cut 12,500 jobs around the world,
more than double the amount previously announced.

It will reduce its production capacity and the number of models it produces
by 10% by the end of 2022, but it did not say where the cuts will fall.

It comes as the firm tries to shore up its finances amid weakening sales.

Union sources said they were hopeful Nissan's Sunderland car plant would
escape the cuts.

In May, it announced job losses of 4,800, which are included in the new
total.

Nissan cuts two models from Sunderland plant

Nissan boss was too powerful, report finds

Carlos Ghosn: Former Nissan boss hit with fresh charge

On Thursday, the firm announced a 94.5% fall in net profit for the first
quarter of 2019 - one of its worst quarterly performances in a decade.

Nissan has been struggling in the US, a key market, where it has been
heavily discounting to keep up with sales by rivals.

It also reported first-quarter sales falls in Europe, Asia and Oceania,
Latin America, the Middle East and Africa.

The firm is reining in its operations after years of expansion under former
chairman Carlos Ghosn, who was ousted last year after being accused of
financial crimes.

In a news conference, chief executive Hiroto Saikawa said the job cuts would
account for a "big portion" of the savings it was trying to make.

Of the 12,500 job losses, 6,400 have already been implemented at eight
locations, he said.

Nissan plans to shed another 6,100 jobs between the 2020 and 2022 financial
years at six locations.

He did not specify which models would be targeted for production cuts, but
said they would be likely to affect "compact cars and its Datsun range".

The cuts will fall on unprofitable models, Mr Saikawa added.

Nissan's Sunderland plant makes profitable lines and also manufactures the
Leaf electric car. Part of the firm's broader strategy is a focus on
electric vehicles.

However, in February it announced it would build its new X-Trail model in
Japan, instead of Sunderland, blaming Brexit uncertainty.

A month later, it said it planned to end the production of two of its
Infiniti cars at Sunderland.

Analysis

Theo Leggett, international business correspondent

Battered by scandal, and struggling to curb falling sales, Nissan is taking
dramatic steps.

It now plans to cut 12,500 jobs worldwide and close or reduce capacity at up
to 14 factories as it tries to reduce excess capacity and cut costs.

In the three months to the end of June, the company made an operating profit
of just £12m ($14m), compared with more than £800m ($1bn) in the same period
last year - a decline of 98%.

Sales in the US, one of its biggest markets, have declined sharply, while
there have also been concerns in Europe.

Last year, the company's former chairman, Carlos Ghosn, was dismissed,
following his arrest in Japan on charges of financial misconduct.

He denies the charges and has blamed a conspiracy among Nissan executives
for his downfall.

--BBC

Boeing warns it may stop 737 Max production

Boeing is warning that it might have to halt production of the 737 Max if
grounding continues much longer.

The company reported its largest-ever quarterly loss of $3.4bn (£2.7bn) on
Wednesday due to the troubled plane.

If hurdles with regulators worldwide continue, Boeing said it would consider
reducing or shutting down production of the 737 Max entirely.

However, Boeing boss Dennis Muilenburg is confident the plane will be back
in the air by October.

"As our efforts to support the 737 Max's safe return to service continue, we
will continue to assess our production plans," Mr Muilenburg told investors
in a conference call.

"Should our estimate of the anticipated return to service change, we might
need to consider possible further rate reductions or other options,
including a temporary shutdown of the Max production."

Boeing's entire fleet of flagship 737 Max planes was grounded in March after
issues with the model were linked to an Ethiopian Airlines flight crash that
killed 157 people.

Five months earlier, 189 people were killed when a Boeing 737 Max operated
by Lion Air crashed.

Awaiting approval

As investigations into the two crashes continue, Boeing has been working on
fixes for its Mcas anti-stall flight control software, as well as other
issues identified by regulators, including the US Federal Aviation
Administration.

Boeing, which has customers in 150 countries, is still waiting for approval
from regulators.

Mr Muilenberg said the planemaker had been holding weekly technical calls
with operators of the 737 Max, while the modified software had so far been
tested in 225 flight simulator sessions.

"These are challenging times, first and foremost, for the families and loved
ones who are affected by these recent events, and also for our dedicated
people, who work tirelessly to deliver on our mission to connect, protect,
explore and inspire the world, all with a relentless focus on quality and
safety and doing so with the utmost integrity," he stressed.

"This is a defining moment for Boeing and we're committed to coming through
this challenging time better and stronger as a company."

Spiralling costs

After the two crashes, production of the 737 Max was reduced from 52 to 42
aircraft per month, Mr Muilenburg said.

The knock-on effect of this move is that Boeing has to pay more for plane
parts than before, which are priced according to the volume purchased by the
planemaker.

Having to suspend deliveries of new 737 Max planes to airlines has also hit
Boeing's cash flow and profit margins.

Further reducing production of the plane would compound these problems,
which could lead Boeing to halt production of the 737 Max completely - a
move the company has not taken since it halted production of the 747 for 20
days in 1997, when demand outstripped supply of parts.

The grounding of the 737 Max and the cuts in production have both affected
Boeing's customers and are likely to continue to cause plane delivery delays
in the future, Mr Muilenberg acknowledged.

"I want to personally thank everyone who continues to be our partner in this
journey; from our airline customers and their pilots, flight attendants and
others who have been impacted by these groundings, representatives from all
levels of government who share our commitment to safety for the flying
public and everyone in the aviation community impacted by these events," he
said.

"We are grateful for your support and we will continue striving to earn and
re-earn your trust."--BBC

O2 to launch 5G network in UK in October

O2 has announced it plans to turn on its 5G mobile network in October.

It intends to launch the next-generation service in Belfast, Cardiff,
Edinburgh, London, Slough and Leeds and then expand to a total of 50 towns
and cities by summer 2020.

It will be the last of the UK's network coverage providers to roll out 5G.

However, it will be the only one to do so without using equipment from the
embattled Chinese telecoms equipment-maker Huawei.

O2 is owned by Spain's Telefonica, which has used Huawei's infrastructure in
some of its other networks.

Moreover, O2 trialled some of Huawei's 5G radio access network gear at cell
towers in the UK before deciding to opt for rival products from two vendors
it had already used to deliver 4G.

"We respect all three operators, they were thorough in their submissions,"
O2's chief executive Mark Evans told the BBC.

"But we were convinced that the best choices for us at this time are our
current partners, which are Ericsson and Nokia."

5G: Finally, it's here in the UK - so what is it?

Does 5G pose health risks?

Nokia distances itself from boss's warning over Huawei

The announcement comes the same week that the UK formally postponed a
decision on whether to ban or allow Huawei to be used within any of the UK's
5G networks.

The US has been putting pressure on the government to exclude the Chinese
firm claiming that it poses a risk to national security - something that
Huawei denies.

In April, it had seemed that former Prime Minister Theresa May had decided
that any threat could be managed.

But a move by Washington to restrict other companies' trade with Huawei and
the anticipation of Boris Johnson's cabinet reshuffle led to a government
report into the future of UK's telecoms sector being published without a
final decision having been taken on the matter.

O2 said that Huawei's involvement in the bidding process had helped it
strike a more competitive deal with Ericsson and Nokia, but it had not
closed the door on buying 5G products from the Shenzhen-based company in the
future.

"The least we need is clarity of who we can work with and under what
circumstances," added Mr Evans.

"Not having that clarity is frustrating because that undoubtedly could slow
us down in either our decision making or our execution.

"So, I would still encourage the government to conclude their review and
finalise their judgement ASAP."

O2 would also be affected by the decision since it plans to share some of
Vodafone's 5G cell sites, where Huawei products are being used.

Shopping and entertainment

O2 has said that it will initially focus on providing 5G to sites where
capacity is stretched.

These will include train stations, entertainment and sports venues -
including the O2 Arena in London - and popular retail destinations, such as
Edinburgh's Princes Street and Leeds' White Rose Shopping Centre.

It said consumers can expect faster download speeds and greater reliability
if they purchase a compatible handset.

But Mr Evans said O2 also hopes companies will be early adopters, and had
already struck a deal with Northumbrian Water.

"We're working with them on 5G smart sensors so that they can use that to
detect leakage and water quality, and manage their network better," he said.

BT and Vodafone already offer 5G services of their own and Three is set to
follow in August.

But one industry-watcher said that O2 should not be at a disadvantage by
being the last to act.

"There's been a lot of talk about speed, but actually there aren't the apps
and services there for customers to tap into that in any great way yet,"
said Kester Mann from the consultancy CCS Insight.

"So, these are just the very first steps in a 5G marathon."

Fragmented spectrum

O2's 5G news coincided with the release of its first-half results.

They revealed a 5.1% annual rise in sales, totalling £2.98bn ($3.8bn).

Its number of customers - including those signed to Giffgaff, Tesco Mobile,
Sky Mobile and Lycamobile, which piggyback O2's network - rose by 3.6% to
33.3 million accounts.

Mr Evans also used the opportunity to criticise Ofcom's departing chief,
Sharon White.

He said the regulator should have ensured 5G wave-bands were divided up so
that each operator got a contiguous block of spectrum rather than holding
auctions that are set to leave most firms with fragmented frequency ranges.

The result, he explained, was that 5G's performance might not be as good as
it could have been.

"The regulator hasn't got the balance right for our sector," he added.

"[She] has been very much focused, understandably, on providing customers
value.

"I do believe, though, however, that the regulator should also look at how
they can support or enable the industry to accelerate investment and make
the best use of what we have."

He acknowledged, however, that Ofcom is at least consulting on whether the
spectrum can be "defragmented" by encouraging the networks to trade the
blocks among themselves post-auction.--BBC

Samsung Galaxy Fold 'ready' for launch after screen fix

Samsung's first foldable smartphone will go on sale in September after
problems with the device delayed its initial release.

The April launch of the Galaxy Fold was postponed after early reviewers
reported broken screens.

Samsung said it had made "improvements" to the nearly $2,000 (£1,603) device
which would be sold in "select markets".

The firm has been racing to launch a folding smartphone before its rivals.

"Samsung has taken the time to fully evaluate the product design, make
necessary improvements and run rigorous tests," the company said in a
statement.

Improvements include extending a protective layer to make it clear it is not
meant to be removed, as well as strengthening the hinge area with new
protection caps.

One explanation for the broken screens appears to have been that some
reviewers removed a film which they thought was a typical protective layer
that came with the phone when first bought.

Media captionWATCH: Hands-on with the Samsung Galaxy Fold

The defects with the device proved a source of embarrassment for Samsung
which has seen declining smartphone sales and faces growing competition from
rivals including China's Huawei.

Huawei became the second largest smartphone seller in the world last year
and plans to launch its folding smartphone in September.

The company also pushed back the release of its foldable phone, saying it
wanted to conduct extra tests following the screen problems with Samsung's
Galaxy Fold.

Earlier this year, Chinese technology firm Xiaomi unveiled a prototype of a
folding smartphone that transforms into a tablet.--BBC

INVESTORS DIARY 2019

Company

Event

Venue

Date & Time

Companies under Cautionary

Bindura Nickel Corporation

Padenga Holdings

Delta Corporation

Meikles Limited

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