Major International Business Headlines Brief::: 02 May 2019

Thu May 2 08:15:38 CAT 2019

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Major International Business Headlines Brief::: 02 May 2019

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*  Dutch court to hear case vs Shell brought by widows of hanged Nigeria activists

*  Gambia signs oil exploration deal with BP for A1 block

*  Zambia's 2018 fiscal deficit above forecast at 7.5 pct of GDP

*  South African Airways agrees debt rollover deal in principle -CEO

*  Kenya Airways likely to stick with Boeing as losses narrow

*  Nigeria's Senate hikes 2019 budget with focus on security

*  South Africa's rand weakens on China manufacturing slip

*  Kenya's Equity Group Holdings in talks over buying African bank stakes - statement

*  Kenya's inflation shoots up to 6.58 pct in April due to food, fuel prices

*  South Sudan says its oil is flowing freely despite Sudan port strike

*  US Fed defies Trump and holds interest rates

*  Global sports sponsorship 'to hit £35bn' in 2019

*  Oyo: India's fast-growing hotel chain expands in Europe

*  Defence Secretary Gavin Williamson sacked over Huawei leak

*  Bank of England inflation report: Five things to watch

*  Apple iPhone sales drop at record pace

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Dutch court to hear case vs Shell brought by widows of hanged Nigeria activists

THE HAGUE (Reuters) - A Dutch court said on Wednesday it has jurisdiction to hear a damages suit brought against Royal Dutch Shell by four widows of activists executed by the Nigerian government in 1995.

In a preliminary decision, judges at the Hague District Court said they would allow the suit to go forward, a rare win in a decades-long legal fight, though the claimants must still prove their case. Shell denies wrongdoing or responsibility.

“The court considers itself capable” of hearing the case, said presiding judge Larissa Alwin, reading the decision of a three-judge panel. “This procedure will continue.”

Dutch courts do not award large punitive damages claims, though the case has the potential to embarrass Shell and provide a measure of comfort for the activists’ families if it finds the company bears responsibility in their deaths.

The men executed were a group that became known as the “Ogoni Nine” - activists who included writer Ken Saro-Wiwa. They had protested against Shell’s exploitation of the Niger Delta until they were arrested and hanged after a trial widely seen as flawed.

Relatives have sought to hold the Anglo-Dutch energy company partially responsible in foreign courts, after exhausting legal possibilities in Nigeria.

Shell, headquartered in the Hague, paid $15.5 million to victims’ families in the United States in a 2009 settlement in which it also denied any responsibility or wrongdoing. The U.S. Supreme Court rejected U.S. jurisdiction in 2013.

“I am glad that the (Dutch) court has found it has jurisdiction,” said lead plaintiff Esther Kiobel, whose husband Barinem Kiobel was among the executed activists.

“My husband was killed like a criminal. I want him to be exonerated.”

Judge Alwin cautioned that the three-judge panel did not agree with assertions by the widows that Shell should have done more to prevent their husbands’ executions.

But she ordered the company to turn over documents that could help the claimants’ case, including any evidence that Shell might have made payments to people who gave false information to Nigerian law-enforcement officials.

“We continue to deny all the allegations in the strongest possible terms,” Shell representative Igo Weli said.

“Shell was not responsible for what happened. Shell actually made an appeal for clemency, but sadly this was not heard.”

Weli, who works for Shell’s Nigerian subsidiary, said the company would give the claimants access to internal documents as ordered.

No date has yet been set for a next hearing.

 <mailto:info at bulls.co.zw> 

Gambia signs oil exploration deal with BP for A1 block

BANJUL (Reuters) - Gambia’s government said on Tuesday it had signed a contract with BP to explore oil and gas off its coast.

Minister of Petroleum and Energy Fafa Sanyang said BP would first carry out an environmental impact assessment at the A1 offshore block.

“After all that they will work on a two-year programme for drilling,” Sanyang told Reuters. “After a specific time, they will work on the financial terms.”

BP did not immediately respond to a request for comment.

The A1 block was one of two that President Adama Barrow’s government stripped from Norwegian-listed African Petroleum Corporation in 2017, saying the licenses had expired.

The company disputed that and launched arbitration proceedings in October 2017. No resolution has been announced in the case.

The two blocks are thought to contain up to 3 billion barrels of oil and lie next to licences in neighbouring Senegal, where big discoveries have been made.

Barrow’s government is trying to build up Gambia’s oil and gas sector as a way of reviving an economy gutted by more than two decades of autocratic rule under former President Yahya Jammeh, who fled the country in 2017.

Barrow’s office said in a brief statement on Tuesday that he had met BP representatives at the presidential palace but provided no further details.

Zambia's 2018 fiscal deficit above forecast at 7.5 pct of GDP

LUSAKA (Reuters) - Zambia’s 2018 fiscal deficit stood at 7.5 percent of gross domestic product (GDP), higher than an earlier government projection of around 7 percent, Finance Minister Margaret Mwanakatwe said on Wednesday.

Mwanakatwe said in a statement after meeting an International Monetary Fund (IMF) delegation that measures to keep the deficit within the 2019 budget target of 6.5 percent of GDP would be undertaken.

“In this regard control measures around debt accumulation and halting arrears build-up will be implemented expeditiously,” she said.

Zambia’s external debt was at $10.05 billion at the end of last year, up from $9.51 billion at the end of the third quarter of the same year, Mwanakatwe said.

The southern African state’s total debt as a percentage of GDP was 73 percent, Mwanakatwe said, adding that the government and IMF delegation agreed on the data’s accuracy.

The IMF rejected Zambia’s borrowing plans in February last year, saying they risked making its debt load harder to sustain.

South African Airways agrees debt rollover deal in principle -CEO

DUBAI (Reuters) - State-owned South African Airways (SAA) has reached an agreement in principle with lenders to roll over $642 million of debt, its CEO said on Tuesday, giving him room to execute a turnaround aimed at weaning the airline off government bailouts.

South African President Cyril Ramaphosa has made a point of supporting ailing state firms like SAA, which survive on government handouts, but the extent of their financial difficulties has meant slow progress.

SAA, which has not made a profit since 2011, has drawn up a five-year turnaround plan that includes slashing costs and cancelling unprofitable routes as it grapples with cost increases that far outstrip revenue growth.

Chief Executive Vuyani Jarana told reporters at a CAPA aviation summit in Dubai that SAA had reached an agreement in principle about extending the maturities of its 9.2 billion rand ($642 million) debt burden. He did not give details of the agreement, saying talks with lenders were ongoing.

“The principle to roll over the debt has been struck but we do need to meet certain conditions,” he said. The debt had been due at the end of March.

Extending debt maturities for the long term would give the executive team led by Jarana, a former executive of mobile phone firm Vodacom, room to focus on the turnaround plan that has pencilled in a return to profitability in 2021.

That forecast is largely dependent on the oil price staying at or below $75 a barrel, and the airline accessing a 4 billion rand injection from the government to fix its capital structure.

As part of the plan, Jarana said SAA was in the process of appointing advisors for the sale of its in-flight catering unit Air Chefs while also looking at turning its no-frills unit Mango into a hybrid rather than a pure low-cost carrier.

($1 = 14.3247 rand)

Kenya Airways likely to stick with Boeing as losses narrow

NAIROBI (Reuters) - Kenya Airways has not considered switching its future plane orders to Airbus following Boeing’s 737-MAX jet crisis, the airline’s chairman said on Tuesday after it posted a rise in last year’s revenue.

The airline, in which Air France-KLM holds a 7.8 percent stake, reported revenue of 114.45 billion shillings ($1.13 billion) for the 12 months to Dec. 31, up from 106.17 billion a year earlier.

The carrier, which narrowed its pretax loss for the period to 7.59 billion shillings from 9.44 billion, needs to boost its fleet of Boeing and Embraer planes to grow its business in the face of stiff competition from rivals like Ethiopian Airlines.

“We have a plan to grow the fleet if we had the means to do that and it is both wide bodies and narrow bodies. That means the 787s, 737s and Embraers,” Michael Joseph told Reuters after an investor briefing.

Airlines and regulators around the world last month grounded the 737-Max planes, a narrow body industry workhorse, after two horror crashes in Indonesia and Ethiopia.

“We haven’t even thought about possibly going to A320-Neo. It is not even in our thoughts at the moment. We need to see where they are going with the 737 Max,” Joseph said.

The airline, whose balance sheet swung back into negative equity territory last year after fuel and fleet ownership costs surged, wants to run the main airport in Nairobi to boost its cash flow and allow it to buy new planes.

The proposal, backed by the cabinet last year, is in the hands of parliament’s transport committee which has to approve it before it is implemented, Joseph said.

It expects to add two Boeing 787 Dreamliner planes back to its fleet later this year. The planes had been leased out to Oman Air, as the then cash-strapped Kenya Airways trimmed its fleet size to stay afloat.

It was forced to restructure $2 billion worth of debt in late 2017 after a slump in Kenyan air travel following several attacks by Islamist militants from Somalia.

It started direct flights to New York last September and plans to run new flights to Rome and Geneva later this year.

“It (New York) is a loss-making route but it is feeding our Africa network,” Sebastian Mikosz, the group CEO, told investors.

The increase in revenue last year was driven by higher income from passengers, the airline said.

Its shares fell 3 percent to trade at 4.70 shillings after the results.

($1 = 101.3000 Kenyan shillings)

Nigeria's Senate hikes 2019 budget with focus on security

ABUJA (Reuters) - Nigeria’s Senate on Tuesday hiked the 2019 budget to 8.91 trillion naira ($29 bln) after boosting its expenditure on security to help the government combat rising militancy and kidnapping across the country.

The upper house of parliament increased the 2019 budget by 80 billion naira, up from the 8.83 trillion naira presented by President Muhammadu Buhari to lawmakers last year.

Buhari needs to sign the budget for it to become law.

“There is a slight increase in the budget deficit. There was also the need to provide more funds for the security and intelligence agencies to deal with additional emerging/unforseen security challenges in the country,” the Senate chairman on appropriation, Senator Mohammed Goje said in a budget paper.

On Saturday, gunmen kidnapped three oil workers from Canada, Scotland and Nigeria at a rig in Nigeria’s Delta region - the second abduction in the area in less than a week.

Two weeks ago, kidnappers in Nigeria killed a British woman and a Nigerian man, and abducted three others in the northern city of Kaduna.

The budget paper showed that funds were also voted as severance pay to outgoing lawmakers that lost re-election during the February national election and for the induction of new Senators.

Parliament said the 2019 budget was aimed at consolidating growth. It approved a budget deficit of 1.9 trillion naira, representing 1.37 percent of GDP.

Nigeria’s economy grew by 1.93 percent last year, its fastest pace since a recession two years earlier, data showed, while inflation which has been in double digits for three years, fell to 11.25 percent in March.

Buhari starts a second term of four years at the end of May. He won re-election pledging to revive the economy, improve security and tackle corruption.

Parliament based its budget approval on estimated crude production of 2.3 million barrels a day, assumed oil price of $60 per barrel and an exchange rate of 305 naira to the dollar.

($1 = 305.95 naira)

South Africa's rand weakens on China manufacturing slip

JOHANNESBURG (Reuters) - South Africa’s rand weakened on Tuesday as an unexpected slowdown in Chinese factory activity dented demand for risk assets, with investors increasingly cautious before local trade and budget data.

At 0640 GMT the rand was 0.1 percent weaker at 14.3550 per dollar from an overnight close of 14.3400.

The rand has see-sawed in a narrow range, with little momentum in either direction, as investors wait for a U.S. Fed policy meeting on Wednesday which is expected to keep lending rates unchanged.

Locally, a Reuters poll of analysts forecast that March trade data, due at 1200 GMT, would show a 4.8 billion rand surplus. The Treasury is also due to publish monthly budget figures.

Traders expect liquidity to be tight with local markets closed for the Worker’s Day holiday before picking up in the run-up to national elections on May 8.

Bonds also weakened, with the yield on the benchmark 10-year paper up 1 basis point to 8.545 percent.

Kenya's Equity Group Holdings in talks over buying African bank stakes - statement

NAIROBI (Reuters) - Kenya’s Equity Group Holdings said on Tuesday it had entered discussions with London-listed financial services firm Atlas Mara Limited about buying stakes in banks in Rwanda, Zambia, Mozambique and Tanzania.

It said it was entering detailed transaction agreements to acquire, via a share swap, 62 percent of the share capital of Rwanda’s Banque Populaire du Rwanda and 100 percent of African Banking Corporation of Zambia, African Banking Corporation Tanzania and African Banking Corporation Mozambique.

Kenya's inflation shoots up to 6.58 pct in April due to food, fuel prices

NAIROBI (Reuters) - Kenya’s inflation shot up in April to its highest level since September 2017 due to rising food, electricity and fuel prices, the statistics office said on Tuesday.

Inflation was 6.58 percent year-on-year in April from 4.35 percent a month earlier, the Kenya National Bureau of Statistics said.

On a month-on-month basis, inflation was 3.51 percent, up from 1.60 percent in March.

The last time inflation was near this levels was in September 2017, when it stood at 7.06 percent year-on-year.

The food and non-alcoholic index rose 6.86 percent month-on-month in April from 3.30 percent the previous month, the bureau said. The index carries a 36.04 percent weight in the basket of goods used to measure inflation.

Kenya’s long rainy season from March till May started late in most of the country, hurting food and other agricultural production. Agriculture accounts for close to a third of Kenya’s annual economic output.

The government’s preferred band for inflation is between 2.5 and 7.5 percent in the medium term.

“While we were expecting food and fuel prices to be a source of pressure on inflation, the magnitude of the rise has taken us by surprise,” Razia Khan, the head of research for Africa at Standard Chartered Bank in London, said.

The Housing, Water, Electricity, Gas and other Fuels Index was up 0.93 percent month-on-month and 5.78 percent year-on-year, the statistics office said.

The World Bank trimmed its forecast for Kenya’s economic growth in 2019 to 5.7 percent this month from an earlier forecast of 5.8 percent because of the delay to the rainy season.

President Uhuru Kenyatta however said this month the government expected the economy to grow by 6.3 percent in 2019.

South Sudan says its oil is flowing freely despite Sudan port strike

PORT SUDAN, Sudan (Reuters) - South Sudan’s oil minister said on Monday that the country’s oil was flowing smoothly and problems with importing chemicals for drilling, due to a strike at a port in neighbouring Sudan, had been resolved.

Landlocked South Sudan’s main oil shipment hub is Port Sudan in neighbouring Sudan. Chemicals due to be imported by South Sudan via the port for oil drilling were stranded late last week after oil workers at the port went on strike.

Oil minister Ezekiel Lol said those chemicals would be shipped to South Sudan on Monday.

I can assure the world and the people of South Sudan that South Sudan oil is flowing smoothly without any difficulties,” Lol said during a visit to Sudan to discuss the issue with Sudanese officials.

The chemicals had been held up at the port for three days, he said.

“The chemicals that are in Port Sudan will be leaving today for South Sudan,” Lol said.

South Sudan’s information minister had said on Friday that the country’s oil exports had been disrupted due to strikes and protests in Port Sudan, but Sudan officials said there had been no disruptions to exports.

South Sudan, which ships its oil through Sudan via a pipeline to Port Sudan, says its current oil production is 135,000 barrels per day.

US Fed defies Trump and holds interest rates

The US Federal Reserve has kept interest rates on hold despite pressure from President Donald Trump to announce a cut.

The central bank said borrowing costs will remain at between 2.25%-2.5%.

The Fed made the decision despite Mr Trump tweeting on Tuesday that it should reduce rates by 1% to help the US economy "go up like a rocket".

The Fed indicated earlier this year that it would not change rates for the rest of 2019.

In his latest attack on the Fed, Mr Trump criticised the central bank for "incessantly" raising rates.

He said that although growth is strong at 3.2% in the first quarter, if the Fed cut interest rates "with our wonderfully low inflation, we could be setting major records".

Commenting on whether comments such as these affect the Fed's decisions, chairman Jerome Powell said: "We are a non-political institution and that means we don't think about short-term political considerations, we don't discuss them and we don't consider them in making our decisions one way or the other."

In a statement explaining its decision, the Federal Open Market Committee (FOMC) maintained its "patient" approach to interest rates.

It said that economic activity rose at a "solid rate" but said that "growth of household spending and business fixed investment slowed in the first quarter".

It also noted that inflation is below the Fed's target of 2%.

Inflation growth slowed to 1.6% in the year to March compared with 1.7% in February,

Mr Powell said the FOMC had "good reasons" to think that lower inflation growth "may wind up being transient".

But he said: "We did see inflation running persistently below, then that's something the committee would be concerned about."

At present, Mr Powell said the Fed is "comfortable" with its current stance.

If you wanted some clear guidance on the Fed's plans you must be disappointed.

Continued patience was what Jerome Powell had to offer. He did not see a strong case for moving interest rates in either direction. Risks to the economic outlook have moderated he said, referring particularly to international developments.

Data from Europe and China have improved, there have been signs of progress in US China trade talks and the possibility of a disorderly Brexit has been pushed off for now he said.

Less risk means less need to hold back from raising interest rates. But the Fed statement also noted that inflation is now running below 2%, the Fed's target. Last time, in March, the statement said price rises remained near that rate.

Lower inflation is a reason for holding off on rate rises and could support the case for cuts if the economy weakens.--BBC

Global sports sponsorship 'to hit £35bn' in 2019

Business spending on sports sponsorship is set to grow by 4% to £35bn globally in 2019, according to a new report.

But rights-holders, such as leagues, teams or tournaments, are under-exploiting sponsorship deals, according to research from agency Two Circles.

It says that there could be an extra £14bn in revenues being unrealised because of outdated rights packaging.

It also says sport has to move beyond backers such as carmakers, financial services, airlines and gambling.

'True value'

"Most rights-holders continue to package and sell sponsorship just as they did 20 years ago - offering brand exposure through linear (TV) broadcast coverage as the main benefit for brands," says Two Circles boss Gareth Balch.

He said the power of digital marketing was still not being fully utilised by sporting bodies.

"Rights-holders are adapting," Mr Blach added, "and we predict a sports sponsorship correction".

"By embracing the power of digital and data to create sponsorship assets that better satisfy the objectives of brands, rights-holders will realise the true value of their sponsorship businesses."

Two Circles predicts spend on sponsorship will increase by 6% on average year-on-year between 2020 and 2024 to hit £48bn overall by the end of the period.

Gambling concerns

The report comes amid concerns in Europe that marketing restrictions on gambling firms, which currently account for 12% of sports sponsorship spend in the UK alone, could have a considerable negative impact on the sports sponsorship market.

In the UK, health bodies, charities, regulators and businesses are being brought together to tackle problem gambling.

The Gambling Commission has drawn up a three-year strategy that focuses on prevention, education and treatment and support for problem gamblers.

GVC Holdings, which owns Gala, Ladbrokes and Coral, has said it is stopping all football shirt sponsorship, as well as stopping perimeter advertising at matches.--BBC

Oyo: India's fast-growing hotel chain expands in Europe

India's fast-growing hotel chain Oyo will expand in Europe with the purchase of an Amsterdam-based vacation rental firm.

Oyo will reportedly pay €369.5m ($415m; £317.9m) for @Leisure.

The Indian firm has grown rapidly since its launch in 2013 and claims it is the world's sixth largest hotel chain.

Founded by Ritesh Agarwal, now 25, Oyo has received funding from Japanese conglomerate Softbank as well as Airbnb.

Last month the firm secured a "strategic investment" from Airbnb, reportedly valued at $100m.

Oyo operates budget hotels as well as rental homes across countries including China, US and UK, as well as India.

The company hopes to expand its reach in the European holiday market with its acquisition of @Leisure - which manages homes, parks and apartments - from German media firm Axel Springer.

Oyo Global Chief Strategy Officer Maninder Gulati said the European market is "spearheading the vacation and urban home rental trend globally".

More than 2.8 million holiday-makers from 118 countries already book their holiday every year with @Leisure Group, he said.

"Through this acquisition, the size and scale of the opportunity can be immediately unlocked for Oyo's homes business," Mr Gulati said.--BBC

Defence Secretary Gavin Williamson sacked over Huawei leak

Gavin Williamson has been sacked as defence secretary following an inquiry into a leak from a top-level National Security Council meeting.

Downing Street said the PM had "lost confidence in his ability to serve" and Penny Mordaunt will take on the role.

The inquiry followed reports over a plan to allow Huawei limited access to help build the UK's new 5G network.

Mr Williamson, who has been defence secretary since 2017, "strenuously" denies leaking the information.

In a meeting with Mr Williamson on Wednesday evening, Theresa May told him she had information that provided "compelling evidence" that he was responsible for the unauthorised disclosure.

In a letter confirming his dismissal, she said: "No other, credible version of events to explain this leak has been identified."

Responding in a letter to the PM, Mr Williamson said he was "confident" that a "thorough and formal inquiry" would have "vindicated" his position.

"I appreciate you offering me the option to resign, but to resign would have been to accept that I, my civil servants, my military advisers or my staff were responsible: this was not the case," he said.

As it happened: Reaction after Williamson sacking

Exchange of letters between May and Williamson

Profile: Gavin Williamson

Kuenssberg: Now Williamson told to 'go away and shut up'

The inquiry into the National Security Council leak began after the Daily Telegraph reported on the Huawei decision and subsequent warnings within cabinet about possible risks to national security over a deal with Huawei.

BBC political editor Laura Kuenssberg said sources close to the former defence secretary had told her Mr Williamson did meet the Daily Telegraph's deputy political editor, Steven Swinford, but, she pointed out "that absolutely does not prove" he leaked the story to him.

According to Sky News defence and security correspondent Alistair Bunkall, Mr Williamson swore on his children's lives that he was not responsible for the leak.

Security correspondent Frank Gardner said the BBC had been told "more than one concerning issue" had been uncovered regarding Mr Williamson during the leak inquiry and not just the Huawei conversation.

Downing Street has made a very serious accusation and is sure enough to carry out this sacking.

For the prime minister's allies, it will show that she is, despite the political turmoil, still strong enough to move some of her ministers around - to hire and fire.

Mr Williamson is strenuously still denying that the leak was anything to do with him at all.

There is nothing fond, or anything conciliatory, in either the letter from the prime minister to him, or his reply back to her.

The National Security Council (NSC) is made up of senior cabinet ministers and its weekly meetings are chaired by the prime minister, with other ministers, officials and senior figures from the armed forces and intelligence agencies invited when needed.

It is a forum where secret intelligence can be shared by GCHQ, MI6 and MI5 with ministers, all of whom have signed the Official Secrets Act.

There has been no formal confirmation of Huawei's role in the 5G network and No 10 said a final decision would be made at the end of spring.

Penny Mordaunt: UK's first female defence secretary

Huawei: The story of a controversial company

Inquiry to be held into Huawei leak

Huawei has denied there is any risk of spying or sabotage, or that it is controlled by the Chinese government.

Mrs May said the leak from the meeting on 23 April was "an extremely serious matter and a deeply disappointing one".

Theresa May's letter to Gavin Williamson

It is vital for the operation of good government and for the UK's national interest in some of the most sensitive and important areas that the members of the NSC - from our armed forces, our security and intelligence agencies, and the most senior level of government - are able to have frank and detailed discussions in full confidence that the advice and analysis provided is not discussed or divulged beyond that trusted environment.

"That is why I commissioned the cabinet secretary to establish an investigation into the unprecedented leak from the NSC meeting last week, and why I expected everyone connected to it - ministers and officials alike - to comply with it fully. You undertook to do so.

"I am therefore concerned by the manner in which you have engaged with this investigation."

Foreign Secretary Jeremy Hunt said the prime minister had no alternative but to sack Mr Williamson, but he said on a personal level he was "very sorry about what happened".

When asked whether there should be a criminal inquiry into the NSC leak, new defence secretary Ms Mordaunt said: "The prime minister has made her decision.

"What I'm focused on is getting on with the job."

Labour's deputy leader Tom Watson has called for a police inquiry to investigate whether or not Mr Williamson breached the Official Secrets Act.

That sentiment was echoed by former national security adviser Lord Ricketts. He told BBC Newsnight that on the face of it, the leak was a breach of the official secrets act and therefore the police ought to be considering an inquiry.

Lib Dems leader Vince Cable said Mr Williamson's sacking was "absolutely extraordinary" and the PM did it in "such a forthright way".

He added that he believed it was "clearly a police matter". His deputy, Jo Swinson, has asked the police to open an investigation.

But Scotland Yard said in a statement that it was a matter for the National Security Council and the Cabinet Office, and it was not carrying out an investigation.

Defence Committee chairman Julian Lewis told the BBC that Mr Williamson's sacking was a "loss" when looked at "purely" from the point of view of defence.

He said he thought "very highly" of Ms Mordaunt - the first woman to take the role of defence secretary.

Rory Stewart has been confirmed as the new international development secretary, taking over from Ms Mordaunt.

Mr Stewart said he believed the prime minister and national security adviser had "made the right decision" in sacking Mr Williamson.--BBC

Bank of England inflation report: Five things to watch

The Bank of England's inflation report is out at noon on Thursday.

It will set out the economic analysis and inflation projections that the Monetary Policy Committee uses to make its interest rate decisions.

In its February report, the Bank of England said it expected growth this year to be the slowest since 2009.

Here's five things to look out for this time round.

1. The economy is doing better

While the UK isn't on the critical list, the Bank was expecting the slowest rate of growth in 2019 since the financial crisis - not least because of Brexit-related uncertainty and slower demand for exports from the likes of China and Germany.

The Bank expected the economy to expand by an unremarkable 0.3% in the first quarter, but the evidence points to a better outturn.

While the list of retail casualties on the High Street grows, some are clearly doing well: consumer spending has defied expectations.

And a rush to stockpile components and finished goods meant a busy few months for manufacturers. Looking to the future, the Bank makes its forecasts by considering the average of a range of Brexit outcomes.

While the prolonged "fog" may continue to suppress investment, the Bank's own research suggests businesses are better prepared for a no-deal, limiting the potential economic fallout from that eventuality.

2. Inflation may be looking up

Like many, the Bank has been surprised by the strength of the jobs market in recent years. Wages are outpacing inflation again - and higher wages mean greater spending power and could ultimately mean the cost of living rises faster.

It's something that the Bank keeps a close eye on.

Add in higher oil prices and the Bank could raise its inflation predictions.

3. 'One and done' for interest rates?

If it's concerned that inflation will be above its 2% target, some in the City have speculated that the Bank may want to get a rate rise in now, while the going is relatively good. But no one is seriously predicting that - yet.

The environment is simply too uncertain.

4. Interest rates: The tortoise approach

Expect the Bank to maintain its mantra that rates will rise slowly and gradually when the hikes do get under way - the tortoise rather than the hare approach.

There's a good reason for the emphasis, to avoid scaring the markets - and consumers.

The Bank's base rate has been below 1% for a decade now, meaning a whole generation of homeowners haven't known variable mortgage rates to be above 5%.

The majority of economists reckon the Bank will hold fire on changing rates until next year, possibly until after the departure of the governor, Mark Carney, in January.

5. A change of boss - not necessarily a change in tactics

The hunt for Mr Carney's successor is under way. Will he or she be a "safe pair of hands", a Bank insider? Or, as the chancellor has hinted, someone with a higher international profile?

And what will that mean for rates?

Much will be made of potential candidates' perceived preferences. But ultimately, does it matter?

Sure, as those at Capital Economics point out, rate decisions are almost universally aligned with the governor's vote. But their analysis also shows those decisions are dictated largely by the strength of economic data.

Still, that won't stop speculation about the identity of the next governor keeping City traders busy over the summer.--BBC

Apple iPhone sales drop at record pace

Sales of Apple's iPhones fell at their steepest-ever rate, according to data for the three months to the end of March.

The firm said revenue from the iPhone dropped by 17%, compared with the same period a year earlier, to $31bn.

However, Apple chief executive Tim Cook said sales were stronger towards the end of March, including in China where it cut iPhone prices to boost demand.

Apple lifted its outlook for the three months to June.

That sent shares more than 5% higher in after-hours trading.

The company had warned of slowing iPhone sales earlier this year, especially in China, where Apple competes with cheaper rivals such as Huawei Technologies and Xiaomi.

When will you next buy a phone?

But Mr Cook said price adjustments in China, lower Chinese taxes on the iPhone and new trade-in and financing deals helped sales start to recover toward the end of the quarter.

He also credited improving demand for products such as the Apple Watch, along with progress in US-China trade talks.

Apple chief executive Tim Cook and Oprah Winfrey at the launch of Apple TV+ in March

"The trade relationship, versus the previous quarter, is better. The tone is better," Mr Cook told Reuters. "The sum of all of this together, it helped us."

Apple has lifted its guidance for its third quarter revenue to between $52.5bn and $54.5bn.

For the three months to March, total sales hit $58bn compared to analysts' estimates of $57.3bn.

However, that is below total sales of $61.1bn in the second quarter last year. And while demand improved in China, sales in the region were still down by 20%.

Profits for the second quarter fell to $11.5bn compared to $13.8bn in the same period a year ago.

Apple is attempting to shift its reliance on the iPhone towards services and last month unveiled its new TV streaming platform, Apple TV+, to take on the likes of more established companies such as Netflix.

Services revenue rose to $11.4bn from $9.8bn in the same quarter last year.

But Yoram Wurmser, principal analyst at eMarketer, said long-term growth in services and, to a less extent, other devices "depend on having as many users as possible in the Apple ecosystem, and that's still primarily about the iPhone".

"The long-term growth of the company still depends directly and indirectly on iPhone sales," he added.--BBC

INVESTORS DIARY 2019

Company

Event

Venue

Date & Time

Workers Day

01 May  2019

Africa Day

25 May 2019

 <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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