Major International Business Headlines Brief::: 07 May 2019

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Major International Business Headlines Brief::: 07 May 2019

 


 

 


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*  South Sudan agrees oil exploration deal with South Africa

*  S.Africa's 2019 wine harvest set to hit lowest in more than a decade

*  Nigeria stock exchange receives MTN listing application, regulator says

*  South African rand and equities weaken on U.S.-China trade fears

*  Total enters $8.8 bln deal with Occidental for Anadarko's Africa assets

*  S.Africa's Massmart CEO resigns as retailer eyes Africa expansion

*  Kenya's KCB Group looks to buy banks in Rwanda, DRC -CEO

*  Kenya PMI falls in April, first contraction in 17 months

*  South Sudan says agrees oil exploration deal with South Africa

*  Gold: Gordon Brown's sale remains controversial 20 years on

*  Boeing admits knowing of 737 Max problem

*  Ministers spend extra £160m on Brexit consultant contracts

*  Could your firm move to a four-day week?

 

 


 <mailto:info at bulls.co.zw> 

 


 

                                      


South Sudan agrees oil exploration deal with South Africa

JUBA (Reuters) - South Sudan and South Africa on Monday signed a six-year
production-sharing agreement for an untapped exploration block in the East
African country, where production has been hit by civil war.

 

The Exploration Production Sharing Agreement for Block B2 was signed by
Ezekiel Lol Gatkuoth, South Sudan’s Minister of Petroleum and Jeff Radebe,
South Africa’s Minister of Energy, a Reuters reporter at the ceremony said.

 

Radebe said the South Africans had committed $50 million for exploration.
South Africa was also interested in building a pipeline and refinery, he
said, bringing their total projected investment to $1 billion, according to
memorandum of understanding signed in November.

 

Block B2 was once part of a 120,000 square kilometre area known as Block B,
which was divided into three licences in 2012 and is thought to be rich in
hydrocarbons although very little drilling has been done there.

 

The block lies in greater Jonglei State.

 

South Sudan became the world’s youngest country after it split from Sudan in
2011. It has one of the largest reserves of crude in sub-Saharan Africa,
only a third of which have been explored.

 

But production plummeted when civil war broke out two years after
independence. A September peace deal is largely holding but a plan to form a
unity government by May 12 has been delayed.

 

In April, Awow Daniel Chuang, director general for petroleum at the ministry
of petroleum, said production was expected to reach around 195,000 barrels
per day by the end of the year, from 175,000 at present, and rise to 220,000
bpd by early 2020.

 

The government has said production would reach pre-war levels of 350,000 to
400,000 bpd by mid-2020.

 

More than 400,000 people died in South Sudan’s civil war, which displaced
around a third of the country’s 12 million population and led to famine in
parts of the country.

 

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 



S.Africa's 2019 wine harvest set to hit lowest in more than a decade

JOHANNESBURG (Reuters) - South Africa, the world’s eighth largest wine
producer, is expected to harvest its smallest amount of wine grapes in 14
years this year, as dry conditions and fluctuating weather hit output, an
industry report said on Monday.

 

The report by Vinpro, which represents 2,500 South African wine grape
producers, wineries and wine-related businesses said the crop would be 1.4
percent smaller than 2018’s harvest of 1,238,000 tonnes and the lowest
output since 2005’s 1,171,632 tonnes.

 

Industry body South African Wine Industry Information and Systems (Sawis)
estimates the 2019 wine grape crop at 1,225,620 tonnes.

 

“It has been a trying year for our wine grape producers and wineries,” said
Vinpro’s viticultural consultation service manager Francois Viljoen. “A
decline in area under vines and challenging weather conditions contributed
to the smaller harvest.”

 

The 2018/2019 growing season saw warmer than normal temperatures, weather
fluctuations and wetter conditions during parts of the season.

 

Profitability for producers remains a concern despite the average return on
investment doubling to 2 percent in 2018 from 1 percent the previous year,
Vinpro said in its annual State of the South African Wine Industry report.

 

Aging vineyards and thinner profitability margins for producers have
contributed to a decline in the area planted with wine grapes of around 6
percent over the last five years, Vinpro added.

 

However it’s not all sour grapes for wine lovers, with the 2019 wine quality
expected to be good as smaller grape berries tend to have a greater
concentration of flavours, said Viljoen.

 

The wine industry contributes 36 billion rand ($2.48 billion) to South
Africa’s gross domestic product with the winelands, a major draw for
tourists, located mostly in the coastal Western Cape province.

 

The weaker harvest expected in South Africa comes after global wine output
rose to near-record highs in 2018 after a sharp rebound from a poor harvest
the previous year, though consumption stopped growing, the International
Organisation of Vine and Wine (OIV) said last month. [nL8N21S5AB]

 

($1 = 14.5000 rand)

 

 

 

Nigeria stock exchange receives MTN listing application, regulator says

ABUJA (Reuters) - The Nigerian stock exchange has received South African
telecoms firm MTN’s listing application, the regulator said on Monday.

 

Two people with knowledge of the matter disclosed the application last week,
but the regulator did not confirm the registration until Monday.

 

 

South African rand and equities weaken on U.S.-China trade fears

JOHANNESBURG (Reuters) - The South African rand weakened on Monday as the
country heads for national elections on Wednesday while worries over the
trade war between the United States and China curbed emerging market
currencies and shares.

 

The rand declined by 1.05 percent to 14.4950 against the dollar by 1500 GMT,
having closed on Friday at 14.3450 after a moderate U.S. jobs report.

 

Markets were hit by U.S. President Donald Trump’s announcement on Sunday
that he would raise tariffs this week on $200 billion worth of Chinese
goods.

 

“Trump has threatened to increase tariffs on Chinese exports, which has led
to an [emerging markets] currency sell-off overnight,” said fixed income
analyst at Rand Merchant Bank Michelle Wohlberg in a note.

 

South Africans, meanwhile, are preparing to head to the polls on Wednesday
in what is expected to be the country’s most competitive elections since the
end of apartheid. While victory looks assured for the ruling African
National Congress, its majority is expected to decline.

 

Share trade volumes were relatively thin as investors await results from the
elections, Wohlberg said.

 

In bonds, the government yield on benchmark paper due in 2026 was up 2 basis
points at 8.580 percent.

 

The blue-chip Top-40 share index, meanwhile, shed 1.31 percent to 52,336
points while the broader All-Share index was down a shade more than 1
percent at 58,713 points.

 

Banking stocks fell 1.5 percent, with Absa down 2.6 percent at 168.50 rand
and Standard Bank dropping 2.1 percent to 202.48 rand.

 

“The markets have been looking for the trade war between America and China
to be resolved amicably, and that has not happened,” said Garry McNamara,
portfolio manager at Sanlam Private Wealth.

 

“I think the market has built a bit of that into gains over the last week or
month - and that certainly came to an end today.”

 

 

 

Total enters $8.8 bln deal with Occidental for Anadarko's Africa assets

PARIS (Reuters) - French energy major Total said on Sunday it had reached a
binding agreement with Occidental to acquire Anadarko assets in Algeria,
Ghana, Mozambique and South Africa for a consideration of $8.8 billion.

 

The firm said the transaction was contingent upon Occidental entering into
and completing its proposed acquisition of Anadarko and approval of relevant
authorities. The deal is expected to close in 2020.

 

Total said the assets represented around 1.2 billion barrels of oil
equivalent (boe) of 2P reserves, of which 70 percent is gas, plus 2 billion
boe of long term natural gas resources in Mozambique.

 

It added that despite the capital investment in Mozambique LNG, the
acquisition is expected to be free cashflow positive from 2020 even at a
Brent price of less than $50 per barrel and to generate more than $1 billion
a year of free cashflow from 2025 onwards after start-up of Mozambique LNG.

 

The firm confirmed its previously announced shareholder return policy from
2018 to 2020.

 

 

 

S.Africa's Massmart CEO resigns as retailer eyes Africa expansion

JOHANNESBURG (Reuters) - Massmart Chief Executive Guy Hayward will step down
before the end of the year, the South African retailer said on Monday,
ending five years at the helm of the supermarket group as it plans to expand
further in Africa.

 

The 52-year-old’s departure comes after the group reported a sharp fall in
full-year earnings in February and unveiled plans to add 47 new stores
between 2019 and 2021 with about a third of them outside its home market
where growth has stagnated.

 

Hayward felt that ahead of South Africa’s general elections this week, that
the time was right “to hand over the reins for the next phase of Massmart’s
and the country’s growth”, Group Corporate Affairs Executive Brian Leroni
said in an emailed response to questions. He did not elaborate.

 

“The process to appoint Guy’s successor is underway and the board will make
further announcements in due course,” the retailer, which is majority-owned
by Walmart INc, said in a statement. The exact timing of Hayward’s exit is
still to be confirmed.

 

At 1156 GMT, shares in Massmart were down 2.82 percent at 91.59 rand,
compared with a 1.57 percent decline in the Johannesburg All-Share index.

 

“It’s never good news when a CEO resigns and they haven’t got a replacement
for that person immediately,” said FNB Wealth and Investment Portfolio
Manager Wayne McCurrie.

 

“Although he’s staying until the end of the year to help the new successor -
the mere fact that you haven’t got any sort of contingency plan tells you
that it was a little but unexpected.”

 

Massmart’s share price has declined by more than 32 percent since June 2014,
when Hayward took over as CEO, underperforming rivals Shoprite and Pick n
Pay whose shares rose 11.5 percent and 19 percent, respectively, over the
same period.

 

Like many retailers in South Africa, it is grappling with a squeeze on
margins, higher costs and soft sales compounded by depressed consumer
spending in a low growth economy.

 

But unlike Shoprite, Massmart has expanded into Africa slowly and cautiously
to avoid a hit from commodity producing markets, surprising some investors
who had expected a more aggressive approach after the Walmart deal.

 

The retailer, with presence in 13 countries in sub-Saharan Africa, said the
executive management team along with Haywards’ successor “will continue to
focus on the improvement of Massmart’s high-volume, low-expense business
model”.

 

 

 

Kenya's KCB Group looks to buy banks in Rwanda, DRC -CEO

NAIROBI (Reuters) - Kenya’s biggest lender by assets, KCB Group, plans to
buy a bank in Rwanda and one in the Democratic Republic of the Congo (DRC),
its chief executive said.

 

CEO Joshua Oigara, who was speaking to reporters late on Friday, did not
reveal the identity of the two banks the lender is considering acquiring or
the timeframe.

 

KCB is also planning to open a representative office in China, to take
advantage of growing trade links between East Africa and China, he said.

 

Kenyan banks have announced several deals since the government capped
commercial lending rates in 2016, crimping their profit margins and forcing
them to look for survival strategies, including consolidation.

 

Last month, KCB offered to buy National Bank of Kenya (NBK) in a swap of one
KCB share for 10 NBK shares in a deal seen helping NBK out of its perennial
liquidity challenges.

 

CBA Group, a privately held bank, is in the process of merging with NIC Bank
to form the third biggest bank by assets in East Africa.

 

The second largest bank by assets, Equity Group, said last week it was in
talks with London-listed financial services firm Atlas Mara Limited about
acquiring stakes in banks in Rwanda, Zambia, Mozambique and Tanzania.

 

Smaller transactions have included Diamond Trust Bank’s acquisition of Habib
Bank Kenya in 2017.

 

 

 

Kenya PMI falls in April, first contraction in 17 months

NAIROBI, May 6 (Reuters) - Activity in Kenya’s private sector contracted for
the first time in 17 months in April, hurt by drought and strained cash
flows, a survey showed on Monday.

 

The Markit Stanbic Bank Kenya Purchasing Managers’ Index (PMI) for
manufacturing and services dropped to 49.3 from 51.0 in March. Any reading
above 50 indicates growth.

 

“Given the delays in the long rains, the planting season for majority of
farmers has been negatively impacted,” Jibran Qureishi, regional economist
for East Africa at Stanbic Bank, said.

 

“Granted, the long rains have started now, however private consumption is
always also dragged lower during periods where the weather is poor owing to
the high dependence on the agrarian sector.”

 

April’s figure was the lowest since November 2017, following a turbulent
election period, when the PMI stood at 42.8.

 

The World Bank trimmed its forecast for Kenya’s economic growth in 2019 to
5.7 percent in April from an earlier forecast of 5.8 percent because of the
delay to the rainy season. [nL8N21R2CL]

 

The government expects the economy to grow by 6.3 percent in 2019.
[nL8N21M44H]

 

The survey showed private sector activity was hurt by cash flow problems
arising from late payment of bills, especially by government departments.

 

“Various panelists continue to lament a lack of ‘money circulation’ which is
creating cash flow issues. Clearly, the government isn’t adequately
addressing the arrears issue owed to the private sector,” Qureishi said.

 

Detailed PMI data are only available under licence from IHS Markit and
customers need to apply for a licence.

 

 

 

South Sudan says agrees oil exploration deal with South Africa

JUBA (Reuters) - South Sudan and South Africa will sign a production sharing
agreement for an untapped exploration block in the East African country,
whose production has been hampered by civil war, South Sudan’s petroleum
ministry said on Monday.

 

The Exploration Production Sharing Agreement (EPSA) for Block B2 will be
signed by Ezekiel Lol Gatkuoth, South Sudan’s Minister of Petroleum and Jeff
Radebe, South Africa’s Minister of Energy, the ministry said in a statement.

 

Blocks B2 and another, B1 were once part of a 120,000 square kilometre area
known as Block B, which was divided into three licences in 2012 and is
thought to be rich in hydrocarbons although very little drilling has been
done there.

 

The block lies in greater Jonglei State.

 

The world’s youngest country, which split from Sudan in 2011, has one of the
largest reserves of crude in sub-Saharan Africa, only a third of which have
been explored. The country lost many of its oilfields to a civil war that
broke out two years after its independence. A September peace deal is
largely holding.

 

In April, Awow Daniel Chuang, director general for petroleum at the ministry
of petroleum, said production was expected to reach around 195,000 barrels
per day by the end of the year, from 175,000 at present, and rise to 220,000
bpd by early 2020.

 

The government has said production would reach pre-war levels of 350,000 to
400,000 bpd by mid-2020.

 

More than 400,000 people died in South Sudan’s civil war, which displaced
around a third of the country’s 12 million people population and plunged
parts of the country into famine.

 

 

 

Gold: Gordon Brown's sale remains controversial 20 years on

It was called one of the worst investment decisions of all time.

 

Twenty years ago on Tuesday, then Chancellor of the Exchequer Gordon Brown
said he was selling tonnes of Britain's gold reserves. Trouble was, his
timing could barely have been worse.

 

"It was the bottom of gold's two-decade bear market," says Adrian Ash,
director of research at investment firm BullionVault. Hindsight may be a
wonderful thing, but Mr Ash points out there were plenty of people warning
against the move at the time - including at the Bank of England.

 

Between 1999 and 2002 the Treasury sold 401 tonnes of gold - out of its
715-tonne holding - at an average price of $275 an ounce, generating about
$3.5bn during the period.

 

Mr Ash says the average price since the sales ended has been almost $1,000.
In 2011 the price reached more than $1,900 an ounce, and on Monday stood at
about $1,279.

 

'The final blow'

Despite these headline numbers, at the time it seemed perfectly sensible to
many at the Treasury.

 

Other central banks were also selling gold. Belgium, Canada and the
Netherlands had already sold 1,590 tonnes between them since 1990. In 1997
alone, Argentina and Australia sold a combined 290 tonnes. And in April
1999, Switzerland voted in a referendum to sever the Franc's gold backing,
effectively approving a plan to sell 1,300 tonnes from its 2,590-tonne
hoard.

 

Writing in his 2007 book The Ages of Gold, Timothy Green says: "The erosion
of the gold price during the late 1990s owed much to steady, but
uncoordinated, central bank selling." But he adds: "The final blow, [the
UK's sale] sent a terrible signal to the market."

 

London had been the centre of the gold market for 300 years. The
circumstances of the UK sale fuelled a belief that a modern economy no
longer needed to hold huge gold reserves (an argument that still persists
today).

 

News of the sale emerged during a planted question in the House of Commons
on a Friday afternoon in May 1999. That prompted a 10% fall in the metal's
price. Revelations that the sale would be staggered via auctions telegraphed
to the market that the price was likely to remain depressed.

 

It all gave the impression that for governments, holding bullion as a store
of value and useful hedge against inflation was becoming irrelevant. Says Mr
Ash: "Central banks thought they could manage the world by tweaking interest
rates, switching a few dials. Gold's role as a financial backstop had
diminished."

 

The new backstop

This view that gold no longer glistened was underlined in a New York Times'
editorial in May 1999, headlined: Who Needs Gold When We Have Greenspan.
"Dollarization... amounts to a sort of a gold standard without gold," it
said.

 

In other words, Federal Reserve chairman Alan Greenspan and the US dollar
were the new backstop. (The article did caution, though, that this could all
change "if it turns out that central bankers are not the geniuses they are
now deemed to be").

 

 

There was an end-of-millennium feel that gold was history, says Mr Ash.
Globalisation was re-ordering the financial world; the euro created a new -
and, hoped-for, stronger - monetary system; there were calls for the
International Monetary Fund to sell its gold to help write off Third World
debt; private investors had lost interest in the precious metal, preferring
to help fuel the dotcom bubble.

 

In this context Mr Brown's decision does not necessarily look out of step.
The money raised from the gold sale was put into assets that yielded a
return - bonds and currencies. The sale of what was then regarded as a
legacy asset would make money, not lose it, according to the Treasury.

 

 

Even so, says Mr Ash, other nations baulked at the "ham-fisted" way in which
the UK chancellor went about the sale. He cites the Central Bank Gold
Agreement, signed in September 1999 and designed to prevent the markets
being spooked by another sudden sell-off.

 

The agreement involved 15 central banks promising to cap sales over the
following five years, a move designed to provide clarity to the financial
markets and put a floor under the gold price. "It was," says Mr Ash, "a slap
on the wrist for the UK."

 

Has there been any lasting impact? Rhona O'Connell, head of market analysis
for Europe and Asia at global financial services firm Intl FCStone, says no.
She recalls the shock among the influential bullion banks when the decision
was announced, but this subsided once it was accepted that it was the
Treasury's decision, not the Bank of England's.

 

International credibility

"It was irritating at the time that the Bank of England carried the can
[initially] for a decision made by the then chancellor," she said.

 

The debate continues on the need for governments to hold large reserves of
gold. Critics argue that storing a precautionary asset whose value would
probably fall as you sold it is somewhat purposeless. It remains
anachronistic, they say.

 

But for Ms O'Connell: "Regardless of its price on any date, gold is
negatively correlated with virtually all other asset classes and from a
central banker's point of view it is important in terms of adding
international credibility within the financial sector."

 

Some countries - she cites Vietnam as a good example - have bought gold as
security for raising money on the international financial markets in order
to avoid default.

 

It's clear that for many governments, the demise of gold has been greatly
exaggerated. The World Gold Council (WGC) says that purchases by central
banks in the first three months of 2019 were the highest in six years as
countries diversified away from the dollar. China and Russia were the
biggest buyers.

 

Central banks bought 145.5 tonnes of gold over the January-March period, 68%
more than a year earlier. It followed purchases of 651.5 tonnes in 2018, the
most since 1967.

 

"Given the strategic nature of central bank buying, we expect the momentum
to continue," the WGC's head of market intelligence Alistair Hewitt said,
adding that he expected central banks to buy 500-600 tonnes this year.

 

Gordon Brown may have had many legitimate reasons for selling Britain's
gold, but claims it was because bullion was yesterday's asset probably isn't
one of them.--BBC

 

 

 

Boeing admits knowing of 737 Max problem

Boeing has admitted that it knew about a problem with its 737 Max jets a
year before the aircraft was involved in two fatal accidents, but took no
action.

 

The firm said it had inadvertently made an alarm feature optional instead of
standard, but insisted that this did not jeopardise flight safety.

 

All 737 Max planes were grounded in March after an Ethiopian Airlines flight
crashed, killing 157 people.

 

Five months earlier, 189 people were killed in a Lion Air crash.

 

The worldwide fleet of 737 Max planes totalled 387 aircraft at the time of
the grounding.

 

The feature at issue is known as the Angle of Attack (AOA) Disagree alert
and was designed to let pilots know when two different sensors were
reporting conflicting data.

 

The planemaker said it had intended to provide the feature as standard, but
did not realise until deliveries had begun that it was only available if
airlines purchased an optional indicator.

 

It said it had intended to deal with the problem in a later software update.

 

Boeing maintained that the software problem "did not adversely impact
airplane safety or operation".

 

The US Federal Aviation Administration told Reuters news agency that Boeing
had not informed it of the software issue until November 2018, a month after
the Lion Air crash.

 

The FAA said the issue was "low risk", but said Boeing could have helped to
"eliminate possible confusion" by letting it know earlier.

 

The flight angle of the plane has been identified as a factor in the
disasters. Boeing has said that in both fatal crashes, erroneous AOA data
was fed to the jet's Manoeuvring Characteristics Augmentation System (MCAS),
an anti-stall system which has come under scrutiny since the crashes.

 

Boeing is developing new software for MCAS.

 

Boeing has admitted it was aware of a flaw on board the 737 Max months
before the first accident, involving a Lion Air jet off the coast of
Indonesia.

 

But was that flaw a factor in that accident? Would a working "AOA Disagree"
alert actually have made any difference?

 

It's highly unlikely.

 

All it would have told the pilots was that the two angle-of-attack sensors
aboard the plane were giving very different readings.

 

This mattered, because the MCAS system, which has been implicated in the
crash, relied on data from a single sensor. A fault in that sensor may well
have been the trigger for the crash.

 

But the pilots did not even know MCAS existed. It was a system designed to
improve the handling of the aircraft and to operate in the background.

 

In the second accident, the pilots should at least have been aware of MCAS -
and the sensor information could possibly have been of some use to them.

 

But given that they did in any case apparently follow procedures set out by
Boeing to deal with an MCAS failure, but were still unable to maintain
control, it is unlikely to have been a decisive factor.

 

Nevertheless, this will add to the pressure on Boeing - because despite
being aware of an issue with the 737 Max, it initially chose not to inform
airlines.

 

Yet as one 737 pilot told me: every warning system is there for a reason, so
if you know there's a problem, why would you not fix it?

 

Boeing insists the AOA Disagree alert was not necessary for safe flight.

 

But critics will be asking whether the company was complacent - and whether
there is anything else which the company has chosen not to pass on to its
customers, affecting this type of aircraft or its other models.--BBC

 

 

 

Ministers spend extra £160m on Brexit consultant contracts

The government has signed a round of new Brexit contracts with outside
consultants worth almost £160m.

 

Many of them are due to run until April 2020, six months after the UK's new
scheduled departure date from the European Union.

 

Since the EU referendum, Whitehall has hired companies to carry out
consultancy work to prepare for Brexit.

 

The government said it would continue to "draw on the expert advice" of a
range of specialists.

 

In February, an analysis for the BBC found the government had agreed
contracts worth £104m for outside help on Brexit.

 

Scrapped Brexit ferry deals to cost millions

Ministers spend £100m on Brexit help

At the time, Dave Penman, the general secretary of the FDA, the professional
association for civil servants, called the sum "eye watering".

 

He also said it was "no surprise following almost a decade of austerity that
has seen the civil service shrink by almost a quarter".

 

The Cabinet Office has now published a new round of contracts with
consultants.

 

These could be worth up to a further £159m, according to the data provider
Tussell.

 

Nine companies that were awarded contracts last year - including Deloitte
and Ernst & Young - have had those extended by a year.

 

Another 11 firms, including smaller suppliers, have been given brand new
contracts.

 

'Critical time'

Redacted documents published by the government state they're being paid
between £3m and £6m each for IT, accounting and auditing work and management
services, all related to Brexit.

 

Tamzen Isacsson from the Management Consultancies Association says companies
are supporting the government at a critical time.

 

"What they have brought to the government at this unprecedented period of
huge workload is capacity, insight and skills.

 

"This has enabled the government to set up and plan new systems to cope with
a whole range of changes from border control to trade, border policy,
immigration and other areas."

 

A Cabinet Office spokesman said: "As a responsible government we have, and
will continue to, draw on the expert advice of a range of specialists to
deliver a successful and orderly exit from the EU."--BBC

 

 

 

Could your firm move to a four-day week?

All work and no play makes Jack a dull boy, so the old proverb goes.

 

But does it also make Jack less productive, less efficient, unhappy and more
stressed?

 

That's the view of a growing number of voices, including the UK's trade
union body, the TUC. They want businesses to cut the standard working week
from five days to just four.

 

The idea is that you keep your pay, but work fewer hours; a day off in the
week to pursue your own interests or spend time with the family.

 

It may sound too good to be true, but late last year, one of the UK's
leading charities, the Wellcome Trust, kicked off an organisation-wide
consultation on whether to implement a four-day week.

 

"The exam question for us was, 'Could we improve both the productivity and
well-being of Wellcome staff and at the same time improve the overall impact
we have as a charity?'" says Ed Whiting, director of policy at the Wellcome
Trust.

 

Businesses around the country took note. Several smaller companies have
already made the shift to a four-day week, but for a large and respected
non-profit organisation to go the same way would have set an important,
perhaps even a game-changing, precedent for the UK's business landscape.

 

Except the Wellcome Trust decided against it.

 

The reasons were complex and it wasn't down to a lack of enthusiasm. "We had
some people saying, 'This is the most exciting change, I can really see how
I can do more and better and how I would use this fifth day,'" says Mr
Whiting.

 

But he says other employees worried about their workload being compressed
into four days, while some part-time workers were concerned that a new
working week would mess up their childcare or other arrangements.

 

And perhaps most significantly, there were still others who worried that
ploughing so much energy and time into moving towards a four-day week would
distract the charity from its core work.

 

Mr Whiting says they argued: "Shouldn't we be using those efficiencies we
make, those productivity gains, to do more in five days?"

 

So in the end, it was decided that "some of that core business - funding
researchers and tackling big global problems - we might not be able to do
them as effectively, because of the disruption that this would cause".

 

"It wasn't cost that drove the decision [not to go ahead]," he says. "It's
more the time-cost of how you put this all together and make it work for us
as an organisation."

 

Cost savings

The decision is a blow for those who advocate the move to a four-day week as
a solution to rising stress and health problems linked to work, a way of
boosting the UK's productivity, or even a response to increasing levels of
automation in the workplace.

 

Companies such as Glasgow-based marketing firm Pursuit Marketing switched to
a four-day week three years ago, giving every employee Fridays off without
cutting pay.

 

Unions call for four-day working week

Is a four-day week the future of work?

What would be the impact of a four-day week?

"When we raised it initially, our finance director looked at it as just a
salary cost," says Lorraine Gray, Pursuit Marketing's operations director.

 

But she says that since then, the gains have been obvious.

 

Productivity has increased by about 30%, sickness leave is at an all-time
low and there have been unexpected cost savings too: the company no longer
needs to pay professional recruiters to hire staff, as so many people want
to work for them.

 

Still, the evidence from other parts of the world is mixed. Other countries
with shorter working hours often appear more productive than the UK - the
so-called "productivity puzzle".

 

In New Zealand, an estate management company called Perpetual Guardian tried
a four-day week without any loss in productivity.

 

On the other hand, an experiment with six-hour days at state-run nursing
homes in Gothenburg, Sweden, found that while sick-day and productivity
rates improved, staff costs rose considerably, as more people had to be
hired to fill in the gaps in the rota. The experiment was abandoned.

 

Two-tier workforce?

Asheem Singh, the director of economy at the Royal Society of Arts and head
of its Future Work Centre, says sectors like marketing and finance may find
it easier to move to a four-day week compared with sectors such as
healthcare, where "you have to turn up".

 

His concern is that if some sectors cut their hours but others don't, we'll
end up with a two-tier labour force; an elite of white-collar workers who
get a four-day week, while others working more menial jobs continue with
five days.

 

The decision, he says, needs to be taken at a national level. "The question
is: Are we prepared to make politically tough choices about whether we
valorise leisure and spending time with our families as part of our economy
and society?"

 

The Wellcome Trust says that with the four-day week off the agenda, it's now
looking into alternative working arrangements for its 800 employees,
including more flexible working arrangements.

 

And as for Lorraine Grey at Pursuit Marketing, she says the company hasn't
looked back since it gave its employees an extra day off every week. Just
don't call them on a Friday.--BBC

 

 

 

 

 


 

 


 

INVESTORS DIARY 2019

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


 

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
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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
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contents or otherwise arising in connection therewith. Recipients of this
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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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