Major International Business Headlines Brief::: 30 July 2019

Tue Jul 30 04:19:04 CAT 2019

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Major International Business Headlines Brief::: 30 July 2019

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*  African cattle investing - the new cash cow?

*  South Africa's rand steady; focus on unemployment, trade data

*  Kenyan shilling under pressure from end month dollar demand

*  Nigeria plots course to membership of Africa's planned free trade zone

*  UAE's Dana Gas hires adviser to sell Egypt assets -sources

*  Mining mogul Agarwal made just 6% profit on Anglo investment - Reuters estimate

*  Israel's Spacecom looks to rebound from rough patch with Africa satellite

*  Tanzania's economic growth slows in first quarter as construction softens

*  Africa must boost industrial capacity to benefit from free-trade zone -AfDB

*  Fitch downgrades outlook on South Africa's credit rating

*  Work on production line of Boeing 737 Max ‘not adequately funded’

*  Pound sinks to 28-month low on Brexit fears

*  Dark web criminal bought 'quadrillions of Zimbabwe bank notes'

*  TikTok owner ByteDance developing smartphone

*  US teenager wins $3m as Fortnite world champion

*  Vauxhall owner 'could move Astra production from UK'

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African cattle investing - the new cash cow?

JOHANNESBURG/VRYHEID, South Africa (Reuters) - Cattle have long been considered a measure of wealth across Africa - but it is not just farmers cashing in.

A pioneering app in South Africa lets investors, eager to benefit from rising global beef demand, buy shares in a cow from their mobile phone for as little as 576 rand ($41).

Self-styled “crowd-farming” company Livestock Wealth connects investors with small-scale farmers via its “MyFarmbook” app, where they can buy their own cow and receive interest rates of between 5% and 14% depending on where they put their money.

Launched in 2015 with 26 cows, the project now includes more than 2,000 cows and has taken in 50 million rand, with 10 percent of investors coming from outside South Africa.

Groups of investors can buy a whole cow, while individuals can purchase shares in a pregnant cow or young calf.

A pregnant cow costs 18,730 rand and takes 12 months before the newborn calf can be sold for a return, while investing in a calf costs 11,529 rand and takes six months for it to grow enough to be sold.

“We can link small scale farmers to big markets by introducing private capital into the growing phase,” said 38 year-old Livestock Wealth founder and CEO Ntuthuko Shezi, who was inspired by his grandparents’ farming success.

“The household bank account was a crop,” added Shezi of his family experience, standing among a herd of cattle at a partner farm in Vryheid, a ranching town in northern KwaZulu-Natal province.

“EASIER” THAN REAL FARMING

Livestock contributes around 51% to the agricultural economy in South Africa, with global sheep and beef prices rising after droughts in major producing areas.

“Many people live in urban areas and they have interests in participating in farming but they cannot physically be there and this offers them a platform to do that,” said Wandile Sihlobo, economist with South African agribusiness association Agbiz.

Small business consultant Nontokozo Sabela, 34, was once interested in farming - but found the app a better alternative.

She bought her first cow in 2016 and earned around 6,000 rand from it. “This way it’s easier for me, it’s cheaper, it’s convenient,” said Sabela.

As with any investment, however, risks exist. Both the impact of weather on feed costs and fluctuations in global demand for beef can affect the cow investments.

Shezi now hopes to expand his business into the produce market after launching a vegetable growing system this month that aims to give a 220 rand return per month over five years.

($1 = 14.1696 rand)

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South Africa's rand steady; focus on unemployment, trade data

JOHANNESBURG (Reuters) - South Africa’s rand steadied against the dollar in early trade on Monday, but the currency hovered near a 4-week low hit last week after rating agencies Fitch and Moody’s warned about fiscal pressure.

At 0615 GMT, the rand traded at 14.2975 per dollar, not far off its close of 14.3100 on Friday.

The currency weakened to a 4-week low of 14.3150 on Friday after Fitch downgraded the outlook for South Africa’s sub-investment credit rating, citing increased support for struggling state firms such as the power utility Eskom among other factors.

On Thursday, Moody’s said the government’s proposal to provide additional financial support to Eskom was “credit negative” for the sovereign as it was a further drain on resources.

“Focus will now turn back to the U.S. Federal Reserve’s interest rate announcement due on Wednesday, while the release of local employment figures and trade balance data this week may further add to the rand’s volatility,” Bianca Botes, a Treasury partner at Peregrine Treasury Solutions, said in a note.

Statistics South Africa will release second-quarter unemployment figures on Tuesday, while the revenue service will publish June trade balance numbers on Wednesday.

In fixed income, the yield on the benchmark government bond due in 2026 was flat at 8.36%.

Kenyan shilling under pressure from end month dollar demand

NAIROBI (Reuters) - The Kenyan shilling was under pressure on Monday due to end month dollar demand from the energy and manufacturing sector amid excess liquidity in the local money market, traders said.

At 0755 GMT, commercial banks quoted the shilling at 103.85/104.05 per dollar, compared with 103.75/95 at Friday’s close.

Nigeria plots course to membership of Africa's planned free trade zone

ABUJA (Reuters) - Nigeria is backing its commitment to join Africa’s recently agreed free trade zone by setting up a committee to implement the agreement, and promising new laws where necessary to enact membership of the pact, the presidency said on Sunday.

The African Continental Free Trade Agreement (AfCFTA), launched by African leaders on July 7, will if successful create a $3.4 trillion economic bloc and usher in a new era of development.

Nigeria joined AfCFTA despite initial reluctance due to a desire to ensure it would not open local industries to dumping from countries outside the region, and its decision is an important endorsement as the largest economy on the continent.

The presidency said it would set up a committee made up of government agencies and private sector groups to implement the trade agreement.

In preparing Nigeria for the pact, President Muhammadu Buhari needs to approve a number of measures which would facilitate trade and boost local capacity to produce and export goods and services, among other policies, it said.

“Overall, the implementation of the AfCFTA is going to be a long journey,” it said. “Nigeria is committed to ensuring that Africa achieves a free and fair trade environment ... through increased intra-African trade.”

The African Development Bank president told Reuters on Saturday that African nations will need to boost output of goods and services and integrate payment systems if they are to take advantage of the initiative.

The AfCFTA agreement, which creates a single market for goods and services and movement of persons to increase intra-African trade and deepen African economic integration, would be implemented in phases.

The first phase will be to establish a protocol for trade in goods and services and dispute settlement rules. The second will cover competition, investment and intellectual property rights, with negotiations due to start next year.

The African Development Bank president told Reuters on Saturday that African nations will need to boost output of goods and services and integrate payment systems if they are to take advantage of the initiative.

The AfCFTA agreement, which creates a single market for goods and services and movement of persons to increase intra-African trade and deepen African economic integration, would be implemented in phases.

The first phase will be to establish a protocol for trade in goods and services and dispute settlement rules. The second will cover competition, investment and intellectual property rights, with negotiations due to start next year.

UAE's Dana Gas hires adviser to sell Egypt assets -sources

LONDON/DUBAI (Reuters) - United Arab Emirates’ Dana Gas has hired investment bank Tudor, Pickering, Holt & Co. (TPH) to advise it on the sale of its Egyptian assets, worth over $500 million, two sources familiar with the matter said, as the company shifts its focus to its Kurdistan operations.

The Abu Dhabi-listed energy producer - whose main assets are in Egypt and in the Kurdistan Region of Iraq (KRI) - has been considering an alternative listing in London, and focusing on a single geographical area could be appealing to future investors in the company, said one of the sources. The sources did not wish to be identified because the information has not been made public.

A spokesman for Dana Gas declined to comment while TPH did not immediately respond to a request for comment, sent outside working hours.

Dana’s exploration and production assets in Egypt are onshore the Nile Delta except for Block 6 in the Eastern Mediterranean Sea.

In May Dana began drilling at the offshore Merak well in Block 6, saying it could hold up to 4 trillion cubic feet of gas.

On Sunday Dana said in a bourse filing that the drilling has not found commercial hydrocarbons and that the well is being abandoned. It added its operations in Egypt continue production normally.

The gas producer started marketing its Egyptian assets over the past few weeks and while it has received interest from the market there are no buyers lined up yet, said the first source, who added the assets are worth “well over $500 million.”

The decision to sell in Egypt is “strategic” as Dana wants to focus its resources on investments in KRI, where it has large capital expenditure requirements and sees potential for growth, the source added.

In a second bourse filing on Sunday, Dana said a new independently audited report showed the fields in which it has stakes in KRI could be “the biggest gas fields in the whole of Iraq”.

Pearl Petroleum, a consortium majority-owned by Dana Gas and its affiliate Crescent Petroleum, plans to increase gas production from the KRI’s Khor Mor field to 650 mmscf per day by 2022 and 900 mmscf per day by 2023, Dana said.

The expansion plan, worth some $700 million, will include adding two new production trains as well as drilling new wells to raise output from the current 400 mmscf a day, Dana Gas and Crescent Petroleum said in March, when they announced a 20-year gas sales deal with the Kurdistan Regional Government.

In May, Dana’s Chief Executive said Pearl Petroleum would raise funding for the KRI investments through several types of financing.

Dana’s 2019 capital expenditure for Iraqi Kurdistan was estimated at $70 million-$90 million, while its capex for Egypt this year would have been about $90 million, he said at the time.

Dana Gas, which at the end of this year’s first quarter had a cash balance of $442 million, rocked the world of Islamic finance in 2017, when it halted payments on $700 million in sukuk saying the instruments had become unlawful in the UAE.

After a protracted and complex legal dispute it reached a consensual restructuring agreement with its creditors in May last year.

Mining mogul Agarwal made just 6% profit on Anglo investment - Reuters estimate

LONDON (Reuters) - Mining mogul Anil Agarwal pocketed just 6% profit from his 3.5 billion pound ($4.3 billion) investment in Anglo American, held since 2017, even though the underlying shares rose over 50% since then, according to Reuters estimates.

Agarwal’s family vehicle Volcan Investments, the biggest shareholder in Anglo, said on Thursday it would unwind its almost-20% stake in the South African miner by repaying debt with 247.1 million Anglo shares.

After paying back the loan, Volcan would have been left with a 1.9% stake that was sold in the open market for 519 million pounds on Thursday. This makes up his gross profit from the whole investment, according to a source familiar with the deal.

Once coupon payments and the investment banking fees are accounted for, the sum dwindles to 196.25 million-213.7 million pounds, or 5.7%-6.1% of the original deal size, a Reuters calculation shows.

Under the terms of the original deal, Volcan borrowed 3.5 billion pounds through the issuance of a mandatory convertible bond arranged by U.S. investment bank JPMorgan to fund the acquisition.

The convoluted structure, dubbed “POEMS” (Purchaser of Equity via Mandatory Securities) by JPMorgan, is a variation of the more traditional “exchangeable bond” format, where a borrower issues debt that can be converted into shares of another company.

Volcan Investments and JPMorgan declined to comment.

The first bond would have matured in April 2020, if the Indian billionaire had not cashed out, dashing speculation that he was preparing to take over the 30.8 billion pound diversified miner.

The nature of the convertible bond issuance, however, meant that Agarwal’s profit was just a fraction of the London-listed miner’s massive increase in value of an average 7 pounds per share over the past two years.

Agarwal’s gross profit is the 24.7 million shares, or about 1.9% of Anglo, he was left with after repaying the bond. JP Morgan arranged a sale of those shares for 519 million pounds on Thursday.

On top of that, there is the 4% coupon paid on the debt, which comes at about 280 million pounds over a two-year period, and the fees paid to JPMorgan.

M&A consultancy Freeman Consulting Services said convertible bonds issued by Anglo American typically garner fees of around 0.75%-1.25% of the transaction size.

Assuming JPMorgan charged Volcan a similar fee for this convoluted structure, the total cost to Agarwal is 26.25 million to 43.75 million pounds.

($1 = 0.8065 pounds)

Israel's Spacecom looks to rebound from rough patch with Africa satellite

TEL AVIV (Reuters) - Israel’s Space Communication Ltd plans a satellite launch next weekend which it hopes will mark a rebound from a couple of major setbacks in recent years.

Amos-17, which will provide communication services to Africa, had a total budget including manufacturing, insurance and launch of about $250 million, and will join three others Spacecom operates.

It was manufactured by Boeing Co and has an expected lifespan of about 20 years.

Spacecom hopes a successful launch from Cape Canaveral, Florida, on Aug. 3 will end a rough patch. In 2015 the company lost contact with its Amos-5 satellite and a year later Amos-6 was destroyed days before its scheduled launch when a SpaceX rocket exploded.

“We learned lessons from those catastrophes,” CEO David Pollack told Reuters on Sunday following a news conference. For example, he said Amos-17 would not be combined with the launcher before the latter is fully tested.

“What happened with Amos-5 and Amos-6 was a setback for the company. So we know what to do. We believe we know how to grow. And it’s just a wonderful opportunity that comes with Amos-17, which is the most advanced satellite for the continent most in need,” Pollack said.

Amos-17 is scheduled to launch on a SpaceX Falcon 9 rocket and will orbit 36,000 kilometers above central Africa, providing TV, internet and cellular services as well as services to governments.

The company said it has a sales backlog of $58 million for communication services to Africa and for other services.

Pollack said he expects to recoup Amos-17’s costs in line with industry standards, which is about six to seven years.

Spacecom shares remain well below their peak of 78.30 shekels set in June 2010 but have rallied in recent weeks and closed at 11.60 shekels on Friday.

Tanzania's economic growth slows in first quarter as construction softens

DAR ES SALAAM (Reuters) - Tanzania’s economic growth slowed to 6.6% year-on-year in the first quarter of 2019 from 7.5% in the same period a year earlier, official data showed on Sunday, weighed down by softer construction, agriculture and manufacturing activity.

A leaked report from the International Monetary Fund said earlier this year that Tanzania’s economy has not been expanding as fast as official figures suggest. It said lower growth was partly due to President John Magufuli’s “unpredictable and interventionist” policies.

In the first quarter, construction, the biggest driver of GDP, grew 13.2%, compared with 15.6% a year ago, the state-run National Bureau of Statistics (NBS).

However, growth in the mining sector, which has been the target of repeated government interventions, rebounded to 10.0% from a 5.7% decline during the same period in 2018. Tanzania is Africa’s fourth-largest gold producer.

“The growth (of the mining sector) was mainly due to an increase in production of gold, coal and diamonds,” said NBS.

Magufuli embarked on an ambitious programme of industrialisation after coming to power in late 2015, investing billions of dollars in infrastructure, including a new rail line and a major hydropower plant and reviving the national airline.

But critics say government intervention in mining and agriculture have discouraged investment. Foreign direct investment has slumped and private sector lending growth dropped below 4% in 2018, from an average of 20% between 2013-16.

Agriculture, which accounts for about a third of economic activity, also slowed in the first quarter of this year, with crop production growing 6.0% compared to 8.9% in the same period last year, the statistics bureau said.

Last year the government sent the military to seize the cashew harvest, the main export crop, after complaints by farmers that prices offered by brokers were too low.

Manufacturing, another key GDP contributor, grew 4.8% in the first quarter compared with 5.3% a year earlier.

Tanzania’s economy grew 7% last year, according to the government which has forecast 7.1% growth in 2019.

Earlier this month, however, the World Bank released its own estimates that said Tanzania’s economy grew 5.2% in 2018.

Following the World Bank report, Tanzania said it might revise its 2018 GDP growth rate after meetings in August.

In April, a leaked report from the International Monetary Fund predicted lower growth of around 4-5% in the “medium-term”.

The IMF report said there were serious weaknesses in Tanzania’s official data.

Africa must boost industrial capacity to benefit from free-trade zone -AfDB

ABUJA (Reuters) - African nations will need to boost output of goods and services and integrate payment systems if they are to take advantage of a new $3.4 trillion economic initiative, according to the head of the African Development Bank.

A continental free-trade zone was launched this month in Niger which, if successful, will usher in a new era of development for an area with a population of 1.3 billion people.

It is hoped that the 55-nation African Continental Free Trade Area - the largest bloc since the creation of the World Trade Organization in 1994 - will help unlock Africa’s long-stymied economic potential by boosting intra-regional trade, strengthening supply chains and spreading expertise.

Akinwumi Adesina, president of the AfDB, said he expected industrial manufacturing capacity in Africa to increase, while financial markets would integrate and food production expands.

“Africa has to have its own industrial capacity ... it’s not just about moving raw materials, it’s about value added products,” Adesina told Reuters on the sidelines of an conference in Nigeria’s capital city of Abuja.

The bank chief said African countries need to mobilise more domestic resources, and encourage sovereign wealth and pension funds to invest in infrastructure.

“We brought investors to Africa and in less than 72 hours we mobilised $38.7 billion,” he said. “That tells me that the opportunities are there, if we can get the regulatory and investment environment right.”

He said nations need to provide the right incentives to boost local output while encouraging competition.

Fitch downgrades outlook on South Africa's credit rating

JOHANNESBURG (Reuters) - Ratings agency Fitch downgraded the outlook for South Africa’s sub-investment credit rating on Friday, citing fiscal pressures including increased support for struggling state firms such as the power utility Eskom.

South Africa’s public finances are under huge strain as economic growth has proved weaker than expected while a handful of state companies have needed large government cash injections.

The government this week proposed giving Eskom 59 billion rand ($4.1 billion) of additional financial support over the next two years, on top of an already-promised bailout of 230 billion rand spread over the next decade.

Fitch now rates South Africa’s debt at ‘BB+’, a notch below investment grade, with a negative outlook.

The firm said it forecast the consolidated general government deficit would widen to 6.3% of gross domestic product (GDP) in the current fiscal year, from 4.2% last year.

In a statement that also highlighted political risks, Fitch said: “Continued infighting within the African National Congress is likely to draw attention away from policymaking.”

“Downward revisions to GDP growth in 2019 also raise new questions about South Africa’s GDP growth potential,” it added.

The Finance Ministry said it was aware of the risk that state firms such as Eskom presented and that it was developing a broad strategy for Eskom’s future.

Eskom is expected to publish financial results next week which will show the extent of the crisis at the utility.

($1 = 14.2575 rand)

Work on production line of Boeing 737 Max ‘not adequately funded’

A former Boeing engineer has told the BBC's Panorama programme that work on the production line of the 737 Max plane was not adequately funded.

The aircraft is currently grounded after two crashes which killed 346 people.

The 737 Max is the company's fastest selling plane and has earned the company billions of dollars in sales.

Boeing denies the claims and says it's committed to making the 737 Max one of the safest aircraft ever to fly.

Adam Dickson worked at Boeing for 30 years and led a team of engineers who worked on the 737 Max. He said they were under constant pressure to keep costs down.

"Certainly what I saw was a lack of sufficient resources to do the job in its entirety," he says.

"The culture was very cost centred, incredibly pressurised. Engineers were given targets to get certain amount of cost out of the aeroplane."

Mr Dickson said engineers were under pressure to downplay new features on the 737 Max.

He said by classifying them as minor rather than major changes, Boeing would face less scrutiny from the US regulator, the Federal Aviation Administration.

"The goal was to show that those differences were so similar to the previous design that it would not require a major design classification in the certification process. There was a lot of interest and pressure on the certification and analysis engineers in particular, to look at any changes to the Max as minor changes."

He said that downplaying the changes reduced scrutiny in a way that could impact safety. Now even his own family have fears about the plane's safety.

"My family won't fly on a 737 Max. It's frightening to see such a major incident because of a system that didn't function properly or accurately."

Boeing and the battle over blame

What went wrong inside Boeing's cockpit?

Boeing said its former engineer's comments were incorrect.

"We did not cut corners or push the 737 Max out before it was ready," it said.

"We have always held true to our values of safety, quality and integrity and those values are complementary and mutually reinforcing with productivity and company performance."

Passengers first flew on the 737 Max in 2017, but airlines have been making advance purchases since the plane was first marketed in 2011

Five thousand have been ordered - making it the fastest-selling plane in Boeing's history.

Some of the money from those sales has been used to fund big pay-outs for company executives and shareholders.

'Supercharge'

Since 2013, Boeing has paid $17bn (£13.74bn) in dividends to shareholders and has spent a further $43bn buying its own shares - a spending spree that has helped Boeing treble its share price in just five years.

Chief executive Dennis Muilenburg has also been paid more than $70m.

Critics have accused Boeing of paying more attention to the stock market than the safety of its passengers.

Economist William Lazonick said senior management were too focused on making money.

"If you supercharge the incentives of top executives and tell them that their job is to get the stock price up, they're not going to pay the kind of attention they need to pay to ensuring they produce a safe plane," he said.

Boeing said it "follows a balanced cash deployment strategy that ensures investment in our core businesses and workforce, returns value to shareholders and maintains our strong balance sheet and credit rating".

The 737 Max has been grounded since March and there is currently no sign of regulators allowing the plane back in the skies.

Boeing warns it may halt 737 Max production

Boeing takes $5bn hit to cover 737 Max crisis

Boeing has been trying to fix the software that forced the aircraft in Indonesia and Ethiopia down.

MCAS was designed to operate when the plane was flying at a steep, nose-up angle - and would automatically attempt to move the nose downwards.

It was meant to make the controls feel more predictable and familiar to pilots who were used to older versions of the 737.

Media captionThe MCAS system explained

But pilots didn't know about MCAS because it wasn't included in training materials or the 1,600-page manual for the Max.

Boeing's system also had a fatal flaw - it used a single sensor to work out the angle the plane was flying at.

On both the Indonesian and Ethiopian flights, that sensor stopped working properly. This resulted in MCAS forcing the aircraft downwards even though they were already on the correct course.

The pilots struggled to regain control, because MCAS was designed to kick back in every few seconds. The Indonesian plane was forced down more than 20 times before it crashed.

'Complicated'

Boeing said it wasn't relying on the single sensor, because the pilots were there as back up. It said there was a way to override MCAS - a standard procedure that pilots should have known about from flying the old 737.

The company has said the pilots didn't completely follow the correct operating procedures when things went wrong.

But 737 pilots like Chris Brady say it is wrong to blame the pilots.

"If you're going to design and certify an airliner with such a complicated, obscure failure mode as happened to that crew, it's no wonder that your average crew aren't able to deal with it," he said.

Boeing said it is focusing on implementing the software update, finalising pilot training and rebuilding trust with customers.

"Boeing truly regrets the loss of life and will continue to work with communities, customers and the aviation industry to help with the healing process," it said.

"In any accident we must learn from what happened. It's also important to avoid speculating ahead of the final investigative reports."--bbc

Pound sinks to 28-month low on Brexit fears

The pound sank to a 28-month low against the dollar as Boris Johnson's government toughened its rhetoric on Brexit.

Sterling dipped 1.1% to $1.2242 and €1.1004 respectively.

The currency could fall further, according to analysts at ING Group, as traders appear to have been betting on a last-minute deal being reached.

Many business lobby groups have asked that no-deal be withdrawn as an option to keep investment flowing into the UK.

The pound dropped after "the events over the weekend, where the current stance of the new government became clear", said Petr Krpata, a currency strategist at ING Group.

Michael Gove, who is in charge of planning for no-deal, has said the UK government is currently "working on the assumption" of that very outcome.

He said his team still aimed to come to an agreement with Brussels, but writing in the Sunday Times, he added: "No deal is now a very real prospect."

Mr Krpata says ING Group's assumption is that an early election will take place and that the pound will sink as low as €1.05 and $1.18.

The last low for sterling was $1.2049, reached in January 2017. The record low was $1.0545 from March 1985, just before G7 powers acted to constrain a particularly strong US currency.

Sterling suffered today, at the worst possible time for holidaymakers, as the probability of leaving the EU without a deal rises. It dropped to its lowest level versus the dollar since the Article 50 process began in March 2017, just about staying above $1.22.

It reached a two-year low versus the euro of below €1.10. The weakness is now broad based - there was also a fall against the Yen. It is now a trend, down between 6% and 9% against the major currencies since the beginning of May.

This will mean rising consumer prices. The rough rule of thumb would see this 6% trade-weighted fall add about 1 percentage point to inflation, enough to complicate the decisions of the Bank of England over interest rates.

In theory, a lower pound helps some exporters and, for example, the domestic UK tourism industry. But so much of our manufacturing base needs to import components in order to make those exports, that this effect has not been strong in the years following the significant pound devaluation after the 2016 Brexit vote.

Currencies fluctuate, of course, but the path for the pound has been firmly down, as markets start to calculate that the odds on No Deal are far closer to evens than, as the PM has suggested, "a million to one".

The pound's performance against the dollar

During a visit to Scotland, Mr Johnson said the existing withdrawal agreement negotiated with European leaders was "dead" and had "got to go".

EU member nations have said renegotiating the deal is not an option.

Today's prices mean even fewer euros and dollars at the bureau de change for holidaymakers. At the Post Office, £1 buys €1.0817 or $1.2041, according to its website.

The pound's performance against the euro

Separately, UK government debt prices gained as traders bet on a higher chance that interest rates will be cut.

The country's 10-year bonds, considered the benchmark, are changing hands for a price that yields as low as 0.627%, the lowest in nearly three years. This implies that the cost of borrowing for the government has fallen.--BBC

Dark web criminal bought 'quadrillions of Zimbabwe bank notes'

A drug dealer who used dark web marketplaces to ply his trade apparently used part of the proceeds to buy vast quantities of Zimbabwean cash.

The FBI said Richard Castro, of Florida, had bought the equivalent of "approximately 100 quadrillion [1,000 trillion] Zimbabwe bank notes" in June 2018.

Use of the currency had ended years earlier, following hyperinflation.

The purchase is thought to have been part of a wider money laundering scheme

Castro also bought hundreds of thousands of US dollars worth of vehicles and "luxury automobile [wheel] rims".

The accused initially made his fortune by illegally dealing opioids, including fentanyl and carfentanil - both of which are stronger than heroin.

These were initially sold via AlphaBay and Dream Market, markets on the Tor network accessed via a special web browser only.

However, after the authorities shut AlphaBay down and were rumoured to have compromised Dream Market's platform, Castro told his clients he would accept purchases via encrypted email only and required them to pay the equivalent of a $104 (£85) fee in Bitcoin to be told the address.

An undercover police officer paid the fee and used the address to order several deliveries, which first helped identify one of Castro's associates and then the dealer himself, who had gone by the nickname Chems_usa.

Castro initially claimed to be not guilty before changing his plea last week.

He has since agreed to surrender a sum worth the equivalent of about $4.16m, earned through the criminal venture.

He is due to be sentenced on 25 October and could face decades in jail.--BBC

TikTok owner ByteDance developing smartphone

The creator of a hugely popular video-sharing app has announced it is branching out into making smartphones.

TikTok is the fastest-growing social media app, with about 500 million regular users.

The app, which lets people post 15-second videos, is estimated to have been downloaded more than a billion times on app stores.

TikTok developer ByteDance is making the move after acquiring patents and employees from device-maker Smartisan.

Besides TikTok, ByteDance owns several popular AI-based video and news apps, such as Slack alternative Lark, video-chat app Flipchat, and news aggregator Toutiao, but TikTok is by far its most popular offering.

The app has done so well with both Western and Asian audiences that it recently unseated Uber to become the world's largest privately backed start-up, with a valuation of $75bn (£61.4bn).

According to Chinese financial magazine Caijing, the new phone has been in development for seven months.

ByteDance is not the first developer to capitalise on a popular app. In 2013, Chinese selfie-app-maker Meitu started making phones tailored to consumers who really like to take photos of themselves.

Meitu's phones, promoted by popular Chinese social media influencers, feature dual pixel cameras with faster auto-focus as well as artificial intelligence to select the best customised photo-editing filters for each user.

But China has become a very competitive market for smartphone-makers and there are doubts yet another device will be able to stand out.

"It's extremely difficult for any new entrants to break into the smartphone market profitably, particularly at a time when big brands such as Apple, Samsung and Huawei are carpet-bombing consumers with millions of pounds worth of marketing," Ben Wood, technology analyst at CCS Insight, told BBC News.

"There are always niches that open up in the smartphone market but they tend to be 'firework products', starting with a big bang and quickly disappearing."

Technology giants such as Facebook, Google and Amazon have also branched out beyond their primary businesses but with varying success.

While Facebook is successful in social networks and communication, acquiring popular apps such as Whatsapp and Instagram, it failed to branch out into mobile with its own Android launcher app, Home.

Similarly, Google's Pixel phones have been a winner but its social network, Google+, was finally shut down earlier this year after gradually declining use of the service.

And Amazon's tablets and e-readers have been popular with consumers but its Fire Phone saw a frosty reception after it launched in May 2014.

Within five months, Amazon reported it had suffered a $170m writedown (£110m) due to the product. And it laid off smartphone engineers before pulling the product off the shelves in September 2015.--BBC

US teenager wins $3m as Fortnite world champion

A US teenager has won a record-breaking $3m (£2.4m) to become world champion of the computer game Fortnite.

It is the largest prize pool in the history of e-sports, with $30m shared amongst the winners.

Kyle Giersdorf, 16, won the solo event of the competition in the Arthur Ashe Stadium in New York, which hosts the US Open tennis tournament.

Jaden Ashman - a 15-year-old from Hornchurch, London - won almost £1m for coming second in the duos event.

And another British teenager - 14-year-old Kyle "Mongraal" Jackson from Sidcup, Kent - also walked away with a major prize.

Mr Giersdorf, known online as Bugha, stood laughing and shaking his head as the crowd erupted when his name was announced.

He told the BBC he wants to save most of his prize. "All I want is a new desk and maybe a desk for my trophy," he said.

The final game was described by the commentators as a "ridiculous victory lap" as the winner played with a smile on his face whilst beating his rivals.

The event is seen as a major moment in e-sports, which is estimated to be a billion-dollar industry in 2019.

However, its record for the biggest prize pool is already set to be broken by another event called The International, taking place in August.

The Fortnite finals saw 100 players battling on giant computer screens.

Forty million players attempted to qualify over 10 weeks of online competition.

There are an estimated 32.4 million gamers in the UK.

More than 30 nations were represented with 70 players coming from the US, 14 from France and 11 from the UK.

The game involves 100 players being dropped onto an island where they have to find weapons, build structures and eliminate each other until one player comes out on top.

It has 200 million registered players worldwide and is free to download, but players can spend money on in-game purchases.

Players can play alone, as part of a four-person squad or a 20-member team, either with friends or people they do not know.

Last month its makers were quizzed by MPs on whether game developers Epic Games did enough to verify the age of players or encourage users to take breaks after long periods of gameplay.

In April, the Duke of Sussex called for Fortnite to be banned, saying the game had been "created to addict".

The firm's legal counsel Canon Pence told MPs that Epic Games staff had been "quite taken aback" by Prince Harry's comment.--BBC

Vauxhall owner 'could move Astra production from UK'

The chief executive of Vauxhall-owner PSA says it could move all production from its Ellesmere Port factory if Brexit makes it unprofitable.

Carlos Tavares told the Financial Times that the carmaker has alternatives to the plant which it could use.

The move would probably lead to the closure of the site, the FT said, threatening 1,000 jobs.

That would leave Vauxhall's Luton-based van plant as its last presence in the UK.

"Frankly I would prefer to put it [the Astra car] in Ellesmere Port, but if the conditions are bad and I cannot make it profitable, then I have to protect the rest of the company and I will not do it," Mr Tavares told the paper.

"We have an alternative to Ellesmere Port."

In June, the carmaker announced plans to manufacture the next generation of the Astra, its best selling car, in Ellesmere Port and another factory in Germany. At the time, it warned that its decision would depend on the final Brexit terms.

However, Mr Tavares has now gone further, indicating that the firm has another plant in mind should the UK leave the EU without a deal.

'Catastrophic'

In an official statement on Monday, PSA confirmed the group was still looking to manufacture the next-generation Astra at Russelsheim and Ellesmere Port.

But it warned that the final decision on the role of the Ellesmere Port plant would be conditional on the "final terms of the UK's exit from the European Union".

"PSA Groupe has put in to place a comprehensive 'no-deal' contingency plan that covers human resources, taxation, customs, logistics, production, regulation, supply chain and IT," it added.

The firm said it would closely monitor political developments and engage with politicians to understand the various potential Brexit outcomes.

At the weekend, Michael Gove, who has been charged by Prime Minister Boris Johnson to prepare for leaving the EU with no deal, said the government was now "working on the assumption" of a no-deal Brexit.

Mr Gove said his team still aimed to come to an agreement with Brussels, but writing in the Sunday Times, he added: "No deal is now a very real prospect."

Steve Turner, assistant general secretary of Unite, said the union and PSA had been in positive discussions about a new vehicle agreement and securing new models for the Ellesmere Port plant.

"All that hard work is now hanging by a thread as Boris Johnson and his government of hard Brexiteers play no-deal roulette with the livelihoods of thousands of Vauxhall workers and their colleagues in the supply chain," he added.

"A no-deal Brexit, or a deal that throws up barriers and tariffs, would be catastrophic for Vauxhall's Ellesmere Port workers and the UK car industry and make plants inefficient, components less attractive and cars built in the UK more expensive for export."

A spokesperson for the Department for Business, Energy and Industrial Strategy said: "The UK automotive industry remains one of our great success stories.

"We are at the forefront of designing and manufacturing cutting-edge vehicles, and we continue to talk to industry, including the automotive sector, in the run-up to exit day, to ensure they are prepared to maximise the opportunities of our exit from the EU."

This isn't the first time Carlos Tavares has warned about the impact of a no-deal Brexit on Vauxhall, but it is the most explicit threat he's made so far.

Last year, for example, he told me there could be "dramatic consequences" for the firm's UK plants, but refused to specify what those consequences might be.

Now he is being specific. Production of the next generation Vauxhall Astra could be moved from Ellesmere Port to another plant in southern Europe.

Yet it is only a month since PSA Group first unveiled its plans to build the new car in Cheshire. So what's changed?

In a word, nothing. That decision was always contingent on a suitable Brexit arrangement being reached to safeguard frictionless trade across the Channel. At the time, company insiders said no-deal was not an option.

Now, with a new Prime Minister in office, Mr Tavares is offering him a clear-cut choice. Get a deal, and the future of the plant could be secured. Go for no-deal and - he says - the work will go elsewhere.

'Not an option'

The Confederation of British Industry has warned the government that neither the UK or EU is ready for a no-deal Brexit.

And the car industry lobby group, the Society of Motor Manufacturers and Traders warned on Friday that "no-deal Brexit is simply not an option."

Car production has been falling in the UK over the past year, amid increasing pleas from the industry for a Brexit deal.

The UK's automotive industry has received a series of blows in recent months, with Honda announcing it will close its Swindon plant in 2021.

Ford also said its Bridgend engine plant in south Wales would close in September 2020 with the loss of 1,700 jobs.

Japanese car producers, including Nissan, have said that Brexit uncertainty is not helping them "plan for the future".

Earlier this year, Nissan opted to build the next X-Trail model in Japan, rather than in Sunderland.--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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