Major International Business Headlines Brief::: 24 June 2019

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Major International Business Headlines Brief::: 24 June 2019

 


 

 


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*  South Africa's MultiChoice looks to lay off more than 2,000 workers

*  African Bank moves to stem client exodus, safeguard S.African comeback

*  Vodacom reaches deal with Congo over 2G licence

*  S.African rand inches back up in wake of Ramaphosa speech, stocks slide

*  Naspers delays multi-billion euros internet float after admin error

*  South Africa's Reserve Bank expected to cut rates soon

*  Orange sees Ethiopia's telco liberalisation taking shape in 2020

*  Ivory Coast, Ghana proposed cocoa price floor lacks other growers'
support

*  South Africa's Vodacom to sell some operations in five African markets

*  Climate change: Cashing in on CO2

*  Wind power: £100m fund aims to boost UK companies

*  Cannabis-laced beer and dog treats excite big firms

*  Slack: Why is this loss-making tech firm worth $20bn?

*  Walmart uses AI cameras to spot thieves

*  Former Barclays chief John Varley cleared of fraud charges

 


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South Africa's MultiChoice looks to lay off more than 2,000 workers

JOHANNESBURG (Reuters) - South African pay-television firm MultiChoice Group
is planning to lay off more than 2,000 workers in South Africa in a shake-up
of its customer care service, the company said on Friday.

 

MultiChoice, which competes with Netflix in online streaming via Showmax,
said in a statement it is launching a consultation process to cut 2,194
positions in MultiChoice South Africa’s customer care call centres and
walk-in centres.

 

“This has not been an easy decision to make but, in a business driven by
advancing technologies, we must continue to drive efficiencies yet be agile
enough to adapt to evolving customer needs,” MultiChoice Group Chief
Executive Calvo Mawela said.

 

“We must act decisively to align to the change in customer behaviour and
competition from over-the-top services,” he added, referring to video
services that stream directly over the internet.

 

“If we don’t reposition now, we run the risk of being completely misaligned
and we put everyone’s jobs at risk.”

 

Under the Labour Relations Act, the consultation process will take 60 days.

 

Over the past three years, MultiChoice has seen a steady decline in the
number of customer telephone calls and e-mails into its call centres and
walk-ins to its customer service centres, the company said.

 

In contrast, self-service digital channels have continued to grow, now
accounting for 70% of all its customer service contacts.

 

“The company is also in an environment where it will rely more on technology
than people,” it said.

 

Job cuts are politically sensitive in South Africa, where the unemployment
rate is more than 27 percent.

 

In his state of the nation address on Thursday, President Cyril Ramaphosa
called the unemployment rate among the youth a “national crisis” that
demands urgent, innovative and coordinated solutions.

 

MultiChoice said it will make new roles available for multi-skilled workers
with the “expertise, skills and technological prowess to enhance the
customer experience”.

 

As part of a support programme agreed with unions and other employee
representatives, the firm will offer voluntary severance packages, wellness
support and financial planning, it said.

 

It will also continue paying for the current studies of MultiChoice
bursary-funded employees, and some other benefits.

 

However the Information Communication and Technology Union (ICTU) said in a
statement it had not been officially informed of the action, “which makes
the process unlawful”.

 

“The employer has timed Friday to make announcement, which shows some
cowardice tendencies of not dealing with the consequences of their actions,”
it said, adding that it will seek an urgent engagement with MultiChoice.

 

Shares in the company closed nearly 2% stronger at 134 rand prior to the
announcement.

 

 

 

 

 


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African Bank moves to stem client exodus, safeguard S.African comeback

JOHANNESBURG (Reuters) - Small South African lender African Bank, rescued
from failure by the central bank four years ago, plans to offer overdrafts
and expand its insurance business as a drop in customer numbers threatens
its turnaround strategy.

 

The bank is losing clients after it tightened lending criteria following its
re-launch into a competitive banking sector made tougher by under-pressure
consumers in a sluggish economy.

 

The first bank to be placed under South African Reserve Bank (SARB)
curatorship in over a decade after nearly collapsing under the weight of bad
loans in 2014, African Bank says it wants to make a comeback as a safer
institution with a base of retail deposits and less focus on risky unsecured
credit.

 

It has made strides towards a set of ambitious 2021 targets, but its
customer numbers have fallen from 1.25 million in 2016 to 1.04 million in
March, some way from its 2.5 million goal.

 

“That is the one we are concerned about, and I think we do have a very solid
plan in terms of how we can address that,” CEO Basani Maluleke told Reuters.
The bank expects the trend to reverse following the launch of its low-fee
digital account in May, she said.

 

Next year it plans to launch an overdraft facility in a bid to make the new
account, called MyWorld and which it says is already the cheapest on the
market, more attractive.

 

MyWorld has accumulated 20,000 customers so far.

 

There are few overdrafts available to the bank’s low-income target market
where credit card penetration is also low, Chief Finance Officer Gustav
Raubenheimer said.

 

The bank also plans to expand its short-term insurance product beyond
funeral policies and relaunch its credit card.

 

It hopes this will halt the loss of customers, allowing it to earn more
revenue from transaction fees and other products and mine customer data for
cross-selling.

 

MYWORLD

If it struggles, it could push a SARB exit, as well as that of its other
shareholders - six of South Africa’s biggest banks - further into the
future.

 

The SARB has said it wants African Bank to be viable and sustainable before
it exits. It hived the bank off from listed parent, African Bank Investments
Ltd (Abil), when the company started to fail. Abil’s share price tumbled
from 28 rand to 31 cents, before trading was suspended.

 

African Bank retained a portion of its old loan book, which it hoped to use
as a springboard for MyWorld but tighter lending criteria led it to lose
some customers.

 

The bank should capitalise on its access to clients from its former lending
book, Stuart Theobald, chairman of financial consultancy Intellidex, said.
Highly competitive rates have also given it an edge in savings and
investments, where it grew deposits by 119% year-on-year.

 

MyWorld, however, doesn’t stand out against rival offerings, he said. It
launched amid the arrival of an array of new, largely digital-only lenders,
some of which are growing much faster and whose arrival has also forced big
banks to up their game.

 

“The level of competition there is quite aggressive,” Theobald said.

 

In the longer term, Maluleke said African Bank planned to establish a
digital marketplace where customers could buy a wide array of products,
including from third parties. But for the next 18 months, it is focusing on
stemming customer losses.

 

 

 

 

Vodacom reaches deal with Congo over 2G licence

KINSHASA (Reuters) - Vodacom Group has reached an agreement with the
Congolese government to end a standoff over the suspension of its 2G
telecoms licence, the telecommunications ministry said on Friday.

 

The ministry suspended the licence in April, saying Vodacom Congo had not
followed correct procedure when it paid $16 million to renew it in 2015.

 

The company has been negotiating with the authorities after losing the
chance to challenge the suspension for three months as a result of a court
ruling on Monday. [nL8N23O3QD]

 

“An agreement has been reached. Vodacom has committed to comply with the
demands of the state,” said John Aluku, chief of staff to the
telecommunications minister.

 

He declined to give further details. The ministry has previously said that
the cost of renewing the licence was $65 million.

 

Vodacom declined immediate comment. An internal email, seen by Reuters,
announced to staff that an agreement had been reached, but did not mention
the terms of the deal.

 

South Africa’s Vodacom Group holds a 51% stake in Vodacom Congo.

 

The suspension has not affected Vodacom Congo’s 3G or 4G licences in Congo.
It is not clear how many of its 12 million customers only have access to 2G
coverage.

 

 

 

S.African rand inches back up in wake of Ramaphosa speech, stocks slide

JOHANNESBURG (Reuters) - South Africa’s rand firmed up slightly on Friday,
clawing back some of its losses following President Cyril Ramaphosa’s state
of the nation address, which some analysts said lacked detail on how he
plans to fix the flagging economy.

 

At 1600 GMT the rand was 0.07% firmer at 14.3450 per dollar compared to a
session-low of 14.4450.

 

On Thursday evening, in his first state of the nation address since leading
his party to victory in a May 8 election, Ramaphosa pledged to grow the
economy, create jobs and reaffirmed a commitment to land redistribution.

 

Ramaphosa also pledged to speed up 230 billion rand ($16 billion) of support
for struggling power utility Eskom.

 

“The State of the Nation (SONA) address is not usually a forum for detailed
policy announcements. Overall, an encouraging message, but now we need
action and implementation as the country,” by Johann Els, chief economist at
Old Mutual Investment Group.

 

Bonds weakened, with the yield on the benchmark government bond due in 2026
up 7 basis points to 8.12%.

 

On the bourse, stocks fell, dragged lower by the Ramaphosa disappointment
and after the U.S military threatened a strike against Iran, chilling
investors already worried by trade tensions between Washington and Beijing.

 

The Johannesburg Stock Exchange’s benchmark Top-40 Index slipped 0.11% to
52,902.88 while the broader All-Share Index closed 0.05% lower at 58,941.47.

 

Retailer Shoprite and pharmaceuticals specialist Clicks were the biggest
losers on the blue-chip index, with Shoprite down 6.36% to 164.74 rand while
Clicks fell 2.39% to 214.32 rand.

 

Embattled telecommunications company Vodacom Group fell 0.71% to 125.37 rand
after announcing that it had entered into agreements to sell some of its
Business Africa operations, which offer business-managed services to
enterprises.

 

Newly-listed pay-for-TV service Multichoice said on Friday it had notified
workers of plans to lay off 1,790 employees.

 

The company’s profit margins have nosedived in the face of competition from
digital services like Netflix looking to gain traction in the African
market.

 

($1 = 14.3332 rand)

 

 

 

Naspers delays multi-billion euros internet float after admin error

JOHANNESBURG (Reuters) - South Africa’s Naspers has been forced to delay the
multi-billion euro flotation of its international internet assets, including
its lucrative stake in China’s Tencent, after an admin error by a third
party involved in the float.

 

The company said a shareholders’ meeting in Cape Town on June 28 to approve
the flotation on Euronext Amsterdam, with a secondary listing on the
Johannesburg Stock Exchange (JSE), had been cancelled and reconvened for
Aug. 23.

 

The listing of the new company, to be called Prosus, has been moved to
September from July 17.

 

Naspers said the third-party error meant some postal copies of the
resolution for the meeting had been wrongly addressed. It did not name the
provider involved or say if any compensation would be sought.

 

“It was outside our control but still unfortunate”, Naspers Chief Executive
Bob Van Dijk told reporters on a conference call. “We think from a
governance point of view it’s extremely important we treat and inform our
shareholders well, and we felt with this mistake, maybe people are still
informed, but we wanted to take no chance.”

 

The flotation of the business, with assets valued at more than 100 billion
euros ($112 billion), is motivated by the value of its 31.2 percent Tencent
stake, worth around 100 billion Hong Kong dollars, and which has made
Naspers’ valuation account for more than 25 percent of the JSE’s Top 40
share index.

 

That makes it problematic for South African pension funds and other
investors in Africa to buy Naspers shares or South African indexes without
disproportionate exposure to Tencent, one of China’s biggest social media
and gaming groups.

 

E-COMMERCE HOLDINGS

 

Naspers plans to retain a 73% stake in the new company, which will hold
assets also including its OLX classified businesses in India and Brazil, and
its U.S. business letgo.

 

Naspers also on Friday reported a 25% rise in annual core headline earnings
per share, thanks to reduced losses at its e-commerce business.

 

The company, whose e-commerce holdings cover areas such as food delivery,
classified ads and online retail, said core headline earnings per share from
continuing operations reached 694 cents in the year through March, compared
with 553 cents the year before.

 

Core headline EPS is Naspers’ main profit measure that strips out
non-operational and one-off items. Headline earnings rose 26% to $3 billion.

 

Naspers said its e-commerce division which houses assets such as OLX
narrowed its trading loss (at the EBITDA level) by 14%, or 15% in local
currency and adjusted for acquisitions and disposals, to $556 million.

 

“Trading losses in e-commerce reduced significantly with the classifieds
business continuing its margin improvement to become profitable in the
aggregate for the year ended 31 March 2019,” it said in a statement.

 

Other e-commerce assets also continued to expand, with online retail trading
losses almost halving and the Payments and Fintech business narrowing its
trading loss margin to 12% from 22% last year.

 

The internet business, which houses Tencent, saw trading profit rise 11% as
many e-commerce units boosted profitability and Tencent delivered a stable
performance, it said.

 

Shares in Naspers closed 1.1% weaker at 3,441 rand.

 

($1 = 14.3200 rand)

 

($1 = 7.8097 Hong Kong dollars)

 

 

 

 

South Africa's Reserve Bank expected to cut rates soon

JOHANNESBURG (Reuters) - South Africa’s Reserve Bank will probably cut
interest rates next month or in September to boost the country’s economy, a
Reuters poll found on Friday.

 

A median forecast from 24 economists, polled this week, suggests the economy
will grow 0.6% this year, slower than last year’s 0.8% and weaker than the
1.1% predicted in a May poll. Growth is expected to accelerate next year to
1.4%.

 

Economists reckon this year’s slow growth should be enough to convince
authorities to cut interest rates by 25 basis points to 6.50%.

 

Ten of 18 economists predicted rates would be cut in one of next quarter’s
two policy meetings - July or September - a substantial uptick in
expectations for lower rates. Last month, only two people forecast rate
cuts.

 

“Inflation is now well-anchored within the 3% to 6% target range, and the
economy is performing very poorly,” said John Ashbourne, senior emerging
markets economist at Capital Economics. “We’ve pencilled in a cut from 6.75%
to 6.50% at July’s meeting.”

 

On Wednesday, the U.S. Federal Reserve signalled rate cuts may begin as
early as July, in the face of growing global and domestic economic risks.
Central banks in Australia, India, New Zealand and Russia have already cut
rates.

 

The repo rate will probably remain at 6.50% until the end of 2021 at least,
the economists said. Inflation is expected to average 4.5% this year and
5.0% next year.

 

The bank left theft the repo rate unchanged at 6.75% in May, judging that
easing inflation and an economy it believed shrank in the first quarter were
not enough to warrant a cut.

 

Two weeks later, the statistics agency confirmed growth contracted by a
quarterly 3.2% in the first three months of 2019. The bank, along with
President Cyril Ramaphosa’s incoming administration, is under pressure to
revive growth.

 

Monetary policy has taken centre stage recently, with senior officials from
South Africa’s governing party contradicting each other over whether the
party had decided to expand the central bank’s mandate to include growth.

 

The rand has recovered to 14.23 per dollar, almost in line with a Reuters
poll earlier this month that also said emerging-market investors would be
more cautious and selective in making risky bets against a strong dollar in
coming months.

 

 

 

Orange sees Ethiopia's telco liberalisation taking shape in 2020

LONDON (Reuters) - Orange, France’s number one telecoms operator, sees the
planned liberalisation of Ethiopia’s telecoms market taking shape in 2020,
Chief Financial Officer Ramon Fernandez said on Friday.

 

Ethiopia is one of the last countries whose telecoms industry remains in the
hands of the government. Orange is one of the leading contenders seeking to
benefit from the end of state-controlled Ethio Telecom’s monopoly, pushed by
Prime Minister Abiy Ahmed.

 

Sources told Reuters earlier this month that the government aimed to award
telecom licenses by the end of 2019, with the new operators expected to
launch services next year. However some industry executives have expressed
scepticism over the timetable. [nL8N23J39U]

 

“The most likely scenario as of today seems to be the opening of the
incumbent’s capital to a minority shareholder who could play a significant
role within the company,” Fernandez told Reuters in an interview in London.

 

“And, in parallel, the opening of the market through the sale of at least
one license to an operator,” Fernandez added.

 

The Orange executive also said a split of Ethio Telecom between an
infrastructure provider and telecom services provider was unlikely,
contradicting earlier reports. [nL8N23O56V]

 

“I’m not certain this is the main scenario as of today. It’s up to the
Ethiopian authorities to decide, but we’re convinced that a split between
telecoms operators and infrastructure operators is not the best option,”
Fernandez said.

 

Africa and the Middle East is Orange’s fastest-growing region for the
telecoms group, which controls 17 operators on the continent.

 

The group, which competes with other major players such as
Vodafone-controlled Vodacom, Airtel Africa and South Africa’s MTN in the
region, generated 5.2 billion euros ($5.9 billion) in the area last year, up
5% from a year earlier.

 

“This a pace we can keep on the long run, with a profitability performance
at the same level, or even above,” Fernandez said.

 

The group is betting that its financial services provider Orange Money,
which offers money transfers and payment services, will help it in the race
to get into Ethiopia’s market, he added.

 

($1 = 0.8835 euros)

 

 

 

 

Ivory Coast, Ghana proposed cocoa price floor lacks other growers' support

LAGOS (Reuters) - A cocoa price floor of $2,600 per tonne agreed by Ivory
Coast and Ghana with buyers for the 2020/21 season lacks the support of
other producing nations, the vice president of the World Cocoa Producers
Organization said on Friday.

 

Sayina Riman, who doubles as president of the Cocoa Association of Nigeria,
said the decision by the two countries was taken without consulting other
growers. Nigeria is the world’s fourth-biggest cocoa producer.

 

Buyers of Ghana and Ivory Coast cocoa last week agreed to the minimum price
proposed by the two governments to address a perceived imbalance between
farmers’ incomes and money made by big commodities traders.

 

The two West African nations account for nearly two-thirds of global output,
yet they exert limited influence over international cocoa prices, which have
stayed low in recent years due to overproduction.

 

Riman said in a statement $2,600 per tonne was better than price swings
which could sometimes go below $1,500 but that the agreed floor was still
lower than where the benchmark should be based on production cost.

 

“We have been in talks with buyers to get a reasonable price for cocoa
beans, but this is not to be done without inputs from other stakeholders in
the value chain,” Riman said.

 

Representatives from across the industry met in Ghana’s capital Accra last
week to discuss a common floor price for cocoa beans produced in Ghana and
Ivory Coast that would protect farmers’ livelihoods.

 

Traders, manufacturers and processors agreed to the proposed floor price of
$2,600 per tonne, but requested a technical meeting on July 3 to address
details of its implementation, the Ghanaian and Ivorian agriculture
ministries said.

 

Farmgate prices in Nigeria have been declining this year. They fell to
around 720,000 naira ($2,353) per tonne from 850,000 naira in January.
Though prices are expected to recover following the new price floor, the
outlook for output has been dampened by heavy rains.

 

Riman said other growers were consulting and would come up with a uniform
position on the development in a few days. The issue is also due to be
tabled at the next meeting of the International Cocoa Organisation (ICCO) in
September in Ivory Coast.

 

 

 

South Africa's Vodacom to sell some operations in five African markets

(Reuters) - South African mobile phone operator Vodacom Group Ltd said on
Friday it had entered into agreements to sell some of its Business Africa
operations, which offer business-managed services to enterprises.

 

Vodacom, which is majority-owned by Vodafone Group Plc, said it had agreed
to sell the Angolan assets of its Business Africa unit to Internet
Technologies Angola.

 

It has also agreed to sell Business Africa’s operations in Nigeria, Zambia
and Ivory Coast to Synergy Communications and to Vodafone Ghana in Ghana, it
said.

 

Through Vodacom Business Africa, the company said it offers business-managed
services to enterprises in 50 countries.

 

“In each of the five Vodacom Business Africa markets, the respective
partners will acquire all of the operations and assets held by Vodacom,” the
company said in a statement, adding that the financial terms were
confidential.

 

Vodacom said it would no longer directly service global enterprise customers
in the five markets covered in the agreements, but would continue to operate
as a telecommunications network provider through local service provider
agreements.

 

“The transactions support Vodacom Group’s enterprise strategy in Africa,
which has been refocused to grow and strengthen its core business,” the
company said.

 

A Vodacom spokeswoman could not immediately provide more details on the
reasoning behind the disposals of the operations.

 

In the year ended March 31, enterprise service revenue contributed 23% to
group service revenue, with 77% of the revenue coming from consumer service.

 

Vodacom said the agreements were subject to regulatory approvals in all the
relevant markets.

 

 

 

 

Climate change: Cashing in on CO2

Scientists from round the world are meeting in Germany to improve ways of
making money from carbon dioxide.

 

They want to transform some of the CO2 that’s overheating the planet into
products to benefit humanity.

 

They don’t claim the technology will solve climate change, but they say it
will help.

 

Carbon dioxide is already being used in novel ways to create fuels,
polymers, fertilisers, proteins, foams and building blocks.

 

Until recently, it was assumed that energy-intensive firms burning gas to
fuel their processes would need eventually to capture the resulting carbon
emissions and bury them underground.

 

This option is inefficient and costly, so the prospect of utilising some of
the CO2 as a valuable raw material is exciting for business.

 

Katy Armstrong, manager of the Carbon Utilisation Centre at Sheffield
University, put it this way: “We need products for the way we live - and
everything we do has an impact.

 

“We need to manufacture our products without increasing CO2 emissions, and
if we can use waste CO2 to help make them, so much the better.”

 

Many of the young carbon usage firms are actually carbon-negative: that
means they take in more CO2 than they put out.

 

We visited three pioneering businesses in the UK which are already making
money out of CO2.

 

Here are their recipes for success (or at least, the ones they will share
with us).

 

Three success stories

CO2 to fertiliser: CCm Technologies, Swindon

 

Recipe: Put cow dung and maize into a bio-digester, where bacteria break
them down and produce biogas to heat our homes.

 

Mix the left-over sludge with nutrient-rich wastes from the fertiliser
industry, sewage plants, farms or the food industry.

 

Pump in CO2, which helps the nutrients bind to the sludge.

 

Product: High-grade fertiliser pellets that have soaked up more CO2 than
they produced. The technology has already won export orders.

 

CO2 to beer bubbles: Strutt and Parker Farms, Suffolk

 

Recipe: Take horse muck and straw from Newmarket races. Put the smelly mess
through a bio-digester (as above).

 

Extract biogas and CO2. Using advanced membranes, separate out food grade
CO2.

 

Product: Clean CO2 that’s sold to a local brewery to put the fizz into
lemonade and lager.

 

CO2 to building blocks: Carbon 8 Aggregates, Leeds

 

Recipe: Take ash from the chimney of a waste incinerator plant.

 

Mix in water and CO2 - then stand back
 this procedure gets very hot.

 

The CO2 is permanently captured within the waste ash to form artificial
limestone for building blocks and other purposes.

 

The process has the additional benefit of treating the ash that would
otherwise be sent to landfill.

 

Product: blocks that have locked up CO2, whilst also reducing the need for
carbon-intensive cement. The technology is winning exports.

 

These firms are pioneers in what’s known as the Circular Economy, in which
wastes are turned into raw materials. The EU is trying to prompt all
industry to adopt this principle.

 

How much CO2 can products absorb?

The big question is how much of the approximately 37 gigatonnes of CO2
emitted annually from our homes, cars, planes, offices and industries can be
utilised by industry.

 

One report projected that seven gigatonnes a year of CO2 could be locked up
into new products.

 

Katy Armstrong described this figure as hugely optimistic. But she said:
“Every tonne that’s captured is a tonne that doesn't heat the atmosphere, so
let’s hope the industry thrives.”--BBC

 

 

 

Wind power: £100m fund aims to boost UK companies

A £100m fund has been established to help UK firms capitalise on the boom in
offshore wind.

 

With the UK so well suited to exploiting wind power, turbines have been
erected in more than 30 locations from Brighton to the Moray Firth.

 

But trade unions say the boom has not generated enough jobs for UK workers.

 

The Offshore Wind Industry Council says its initiative will help hundreds of
firms "maximise opportunities" in the offshore wind supply chain.

 

"The Offshore Wind Growth Partnership will provide practical help for UK
companies so they can compete successfully for contracts in this thriving
global market," said Benj Sykes, chairman of the OWIC and UK country manager
for the Danish firm Orsted.

 

The OWIC, which is a joint government and industry body, will invest the
privately-raised funds over 10 years to support companies in the supply
chain.

 

Firms that manufacture parts, lay cables and maintain wind farms will
receive support ranging from "expert advice on manufacturing and
commercialisation" to funding for innovation. They will also be given
support to export their products and services.

 

By 2030 the offshore wind power market is expected to be worth £30bn per
year, with the UK expected to be generating a third of its electricity from
wind. The OWIC hopes to raise the participation of UK businesses in the
industry from 48% currently to 60%, under a sector deal agreed between
industry and government.

 

The new fund will bring "investment, thousands of high-quality jobs and huge
economic opportunities for communities across the UK", energy and clean
growth minister Chris Skidmore said.

 

Last month GMB general secretary, Tim Roache said Britain's politicians
needed "to sharpen their elbows in the fight for jobs" when it came to
opportunities in the growing renewables sector.

 

The union says up to 1,000 jobs could be created at two mothballed yards in
Fife if EDF chose local firms to manufacture parts for a huge wind farm
project there, rather than as is expected the work being done in Indonesia,
Belgium and Spain.--BBC

 

 

 

Cannabis-laced beer and dog treats excite big firms

Big companies are scrambling to grab a share of the $150bn (£119bn) global
cannabis market, eyeing products as diverse as beer and dog treats.

 

That's according to a report by Standard & Poor's which predicts further
expansion as legal cannabis becomes acceptable.

 

The report by the ratings agency says growth may be volatile, because of the
changing regulatory framework.

 

But it points to growth in sectors such as healthcare, alcoholic beverages,
soft drinks, tobacco, beauty and healthcare.

 

Indeed, two of the biggest investments in the sector have come from Altria,
owner of Philip Morris cigarettes, and Constellation Brands, owner of Corona
beer, which have each invested more than $1bn in such products.

 

So what's going on?

Cannabis, a family of plants, contains compounds which include
tetrahydrocannabinol (THC) - which affects the mind and mood - and
cannabidiol (CBD), which scientists are investigating as a medical
treatment.

 

Companies are seeking options for growth at a time when their existing
businesses are facing pressure.

 

Take alcohol. Younger drinkers are drinking less, the report says, and
turning instead "to coffee shops and recreational cannabis for an
experience".

 

But it's not just alcohol where growth is possible. "The makers of alcoholic
and non-alcoholic beverages, health and beauty care products and cigarettes
are among companies considering selling cannabis products," the report says.

 

Is it legal?

The report cites Euromonitor data showing a total market of $150bn - some
90% of which is illicit.

 

Euromonitor expects the legal cannabis market to grow to about $166bn by
2025.

 

"Large consumer product companies will attempt to capitalise on this growth,
either through their own branded products or joint ventures with smaller
partners that have the deep expertise with cannabis that they lack," the
report says.

 

But it warns: "Regulatory issues may result in growth being volatile."

 

The outlook for growth assumes legalisation in new markets, notably the US,
where the current illicit market is estimated at close to $50bn annually,
the report says.

 

Most growth is expected in Canada, the US, western Europe and parts of South
America.

 

"Although the push for legalisation so far is less pronounced in western
Europe and South America - where only Uruguay has legalised it - Canada
legalised cannabis in certain forms in October 2018 and will also legalise
edible cannabis," the report said.

 

All but three US states have "okayed some form of medical cannabis use", it
added.

 

But for legal cannabis products to reach their full potential, consumers
will have to "shy away from illicit products".

 

Where will the growth come?

The report estimates that the growth in legal cannabis will outpace other
consumer goods sectors, such as packaged food, soft drinks, tobacco and
alcohol in the coming years.

 

For instance, it says that in the cigarette sector - where Altria paid
$1.8bn for a 45% stake in Cronos Group, a Canadian cannabis company - there
could be expansion.

 

Sales of traditional cigarettes are expected to fall in the US by up to 4.5%
annually as the new generation of products, such as e-cigarettes, becomes
more popular.

 

While these products may be the target for growth for cigarette companies
initially, the report expects more of a focus on products from the cannabis
family.

 

In anticipation of changes in the beer and spirits market, Constellation
Brands has taken a stake in Canopy, another Canadian cannabis producer,
which S&P's analysts say will provide growth opportunities for the company
as beer and spirits sales slow.

 

Lawn and garden company Scotts Miracle Grow has invested $1bn buying
companies that help users grow plants with little soil. "While hydroponics
products are not solely dedicated to growing cannabis, we believe this is
the primary purpose," the S&P analysts say.

 

The also point to the revenue-sharing arrangement that Authentic Brands
Group - owner of clothing company Aeropostale and Spyder ski brand - has
with medical marijuana company Tilray to market consumer cannabis products.

 

Who will be the winners?

"The early stages of wide cannabis use in consumer products is likely to
produce many losers because of, to be blunt, the greed factor," the report
says.

 

"Cannabis is still in the start-up phase of the industry life-cycle, with
growth, shakeout, maturity and eventual decline to follow," it adds.

 

It gives the example of e-cigarettes where, they say, one of the first
brands, blu, did not win because Juul developed a more appealing product.

 

Some companies are standing back at present, such as those in the soft
drinks sector.

 

This is because they are finding scope for growth in areas such as flavoured
and carbonated water and energy drinks.

 

The other issue at play is reputation risk. "Brand strength remains
important to beverage giants like Coca-Cola and Pepsi and associating
cannabis with a global brand could destroy brand equity if a negative social
stigma were to attach to the core brands," the report adds.--BBC

 

 

 

Slack: Why is this loss-making tech firm worth $20bn?

Another tech start-up made a blockbuster debut on the US stock market last
week, with shares in Slack ending the week more than 40% higher.

 

That values the Silicon Valley-based business at $20bn, not bad for a
messaging app that was only publicly released in 2014 and has never turned a
profit.

 

So why were investors so keen?

Basically, workplace communication based around email is ripe for a shake-up
- and many believe Slack will lead the way.

 

Indeed, headline writers would have you believe that Slack is the "Email
Killer". But even boss Stewart Butterfield doesn't go that far.

 

He does, though, think his Searchable Log of All Communication and Knowledge
(Slack) software can revolutionise the way employees communicate.

 

How does it work?

The software funnels office communication around teams, projects or subjects
of common interest. They are called channels.

 

It aims to be a more focused way of messaging, allowing people to converse
in groups and replace email chains that often scatter-gun information to
inboxes that never stop filling up.

 

Channels are labelled with a hashtag: if you're working on a new marketing
pitch, the channel could be called #pitch. For office workers with a common
love of Game of Thrones, it could be labelled #thrones.

 

Overlaying this is a suite of other applications and functions, such as
automatic notifications when other users send you a message, or the ability
to have relevant tweets posted directly to the chat channel. And it works
across all platforms, including Android, iOS and Windows.

 

Slack shares surge in latest tech flotation

How to cope with email overload

Mr Butterfield, the entrepreneur behind the Flickr photo app that he sold to
Yahoo, is sympathetic if people struggle to get their heads around this new
way of communication.

 

One of his biggest challenges, he said recently, was explaining how it works
to non-users.

 

Still, the company has 100,000 paying customers, plus many more using a free
basic service, with the number of active daily users put at 10 million.

 

The biggest corporate customers pay at least $100,000 (£78,570) a year for
the service. But Slack has never made a profit. Although revenue rose 80% to
$400m in 2018, losses were $144m.

 

Another master to serve

It might sound crazy to have to pay to use an instant messenger, but Slack
offers a lot of functions for corporate customers:

 

Ryan Ozawa, who uses Slack at the Hawaii Information Service, said: "The
great thing about channels is I know which ones are going to be important
and need checking frequently. Email is not like that.

 

"It has improved productivity. It has cut down on the number of meetings and
the people who need to be at those meetings," he said. Staff in different
parts of the organisation can work across projects in real-time.

 

It won't kill email, he says: "But Slack does fit between email and
meetings."

 

The danger is that it becomes just another tool to keep across. "I already
have to check Twitter, Facebook and so on. I don't need another master to
serve," Mr Ozawa said.

 

Kim Hillyer, part of the team rolling out Slack across international
investment and trading firm TD Ameritrade, estimates that the number of
internal emails has fallen 30% since they began using it six months ago.

 

Preparing the firm's quarterly profits statement would normally take about
three weeks and require 10 meetings each lasting 90 minutes or so. With the
introduction of Slack, went down to a few days and just three meetings,
according to Ms Hillyer. "Slack is a sort of virtual office," she said.

 

Returning from a recent two-week holiday, she was relieved not to have to
filter through hundreds of emails to identify important messages: "It took
me 20 minutes to get up to speed on what was urgent. That was a bit of a
light bulb moment of the benefits."

 

Essential tool

She acknowledges push-back from some staff. Not all people like working
with, perhaps, 50 channels, on top of all the other platforms and social
media. For many, it's just another distraction.

 

And the system also has to be policed so that people are discouraged from
sending irrelevant information in the channels. But it's a learning curve,
and staff are still discovering the potential, Ms Hillyer says.

 

 

Michael Facemire, a Boston-based analyst and technology expert at
consultancy Forrester, says the hurdles facing Slack are high.

 

If companies just need a messaging app and lightweight integration, then the
free version will do. But to drive revenues, Slack needs to embed itself as
an essential corporate tool - just as Microsoft did years ago.

 

"There are many chat apps out there and most of them are free. So they have
to prove that they can be more than that," he said.

 

Competitive threat

Slack's closest competitor is Microsoft Teams, a free chat add-on for
Microsoft Office365 users. Other platforms include Google Hangouts,
Workplace by Facebook and Cisco's Webex Teams.

 

Mr Facemire is not too worried about the competition, though, as each
product has its own drawbacks. "Slack has had a two-year head start," he
said.

 

But one big issue, he says, is that Slack's software can look daunting and
hard to understand, unless you are a power user or IT administrator.

 

"It's a more productive and smarter way to work, but you still have to have
a technologist's lens to see its full value. They have to make the
experience more user-friendly," he said.

 

Will it replace email?

"Every few years an email killer comes along. It's still here," he said.

 

According to tech research firm Radicati the total number of business and
consumer emails sent and received per day will exceed 293 billion in 2019,
and is forecast to grow to over 347 billion by the end of 2023.

 

Still, there is evidence that new messaging tools do improve productivity.

 

The consultancy McKinsey found that workers spend on average 28% of their
week managing email, and nearly 20% looking for information and tracking
down colleagues who can help with specific tasks. Using these new
productivity tools could improve productivity by 20-25%, it found.

 

Slack may not be an email killer. It may, however, offer an answer to the
stress of email overload.--BBC

 

 

 

Walmart uses AI cameras to spot thieves

US supermarket giant Walmart has confirmed it uses image recognition cameras
at checkouts to detect theft.

 

The cameras identify when items are put in a shopping bag without first
being scanned by a cashier, or at the self-service checkout.

 

Walmart told the news site Business Insider than it used the technology in
more than 1,000 stores.

 

The company said that it had made an "investment to ensure the safety of our
customers and associates".

 

The scheme, called Missed Scan Detection by Walmart, uses technology
supplied by Irish company Everseen.

 

The cameras track items rather than people. If an item is spotted being put
in a shopping bag before it has been scanned at the checkout, the system can
call an employee to "help".

 

The retailer said shrinkage - the loss of products due to theft or error -
had decreased since the technology had been deployed.

 

Asda, which is owned by Walmart, and UK supermarket Sainsbury's both told
the BBC they did not use image recognition cameras in their stores.

 

Tesco has not yet replied to a BBC request for comment.--BBC

 

 

 

Former Barclays chief John Varley cleared of fraud charges

The former chief executive of Barclays, John Varley, has been acquitted of
charges of conspiracy to commit fraud.

 

The Court of Appeal declined an application by the Serious Fraud Office to
overturn a decision by Mr Justice Robert Jay that there was insufficient
evidence against Mr Varley.

 

However, the other three defendants, Roger Jenkins, Tom Kalaris and Richard
Boath, will now face a retrial.

 

The three defendants deny any wrongdoing.

 

The SFO accuses them of secretly paying £322m to secure investments from
Qatar during the financial crisis.

 

The funding allowed Barclays to avoid a UK government bailout in 2008.

 

The case against Mr Varley was the only attempt to prosecute a chief
executive of a major bank following the financial crisis.

 

It was seen as an important case for the SFO which had been criticised for
the failure of previous prosecutions, including the collapse last year of a
case against three Tesco executives.--BBC

 

 

 

 

 


 

 


 

INVESTORS DIARY 2019

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


Masimba Holdings

AGM

Head Office, 44 Tilbury Road, Willowvale

21 June 2019, 12:30pm

 


RioZim

AGM

1 Kenilworth Road, Highlands

24 June 2019, 10:30am

 


Proplastics

AGM

Palm Court, Meikles

25 June  2019, 10am

 


Fidelity Life

AGM

Great Indaba Room, Crowne Plaza Monomotapa

26 June 2019, 10am

 


GB Holdings

AGM

Cernol Chemicals Boardroom,  111 Dagenham Road, Willowvale

26 June 2019, 11:30am

 


Dawn Properties

AGM

Ophir Room, Monomotapa Hotel

27 June 2019, 10am

 


Unifreight

AGM

Royal Harare Golf Club

27 June 2019, 10am

 


African Sun

AGM

Ophir Room, Monomotapa Hotel

27 June 2019, 12pm

 


FMP

AGM

Palm Court, Meikles

27 June 2019, 12pm

 


MedTech

AGM

Boardroom, Stand 619, corner Shumba/Hacha Roads, Ruwa

27 June 2019, 2pm

 


FML

AGM

Palm Court, Meikles)

27 June 2019, 2:30pm

 


FBC

AGM

Royal Harare Golf Club

27 June 2019, 3pm

 


BAT

AGM

Head office, 1 Manchester Road, Southerton

28 June 2019, 10am

 


ZBFH

AGM

Boardroom, Ground Floor, 21 Natal Road, Avondale

28 June 2019, 10:30am

 


ZPI

AGM

206 Samora Machel Avenue East

28 June 2019, 2pm

 


 

 

 

 

 


ZHL

AGM

Aquarium Room, Crowne Plaza Monomotapa Hotel

30 June 2019, 10am

 


Edg Edgars

AGM

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

11 July 2019, 9am

 


Companies under Cautionary

 

 

 


 

 

 

 


Bindura Nickel Corporation

 

 

 


Padenga Holdings

 

 

 


Delta Corporation

 

 

 


Meikles Limited

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 


DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of
Faith Capital (Pvt) Ltd for general information purposes only and does not
constitute an offer to sell or the solicitation of an offer to buy or
subscribe for any securities. The information contained in this report has
been compiled from sources believed to be reliable, but no representation or
warranty is made or guarantee given as to its accuracy or completeness. All
opinions expressed and recommendations made are subject to change without
notice. Securities or financial instruments mentioned herein may not be
suitable for all investors. Securities of emerging and mid-size growth
companies typically involve a higher degree of risk and more volatility than
the securities of more established companies. Neither Faith Capital nor any
other member of Bulls ‘n Bears nor any other person, accepts any liability
whatsoever for any loss howsoever arising from any use of this report or its
contents or otherwise arising in connection therewith. Recipients of this
report shall be solely responsible for making their own independent
investigation into the business, financial condition and future prospects of
any companies referred to in this report. Other  Indices quoted herein are
for guideline purposes only and sourced from third parties.

 


 

 


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