Major International Business Headlines Brief::: 09 May 2019

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Major International Business Headlines Brief::: 09 May 2019

 


 

 


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*  MTN Nigeria gets listing approval, securities regulator says

*  Scandal-hit Steinhoff posts $4 bln operating loss for fiscal 2017

*  Kenya to upgrade old rail track to deliver Uganda link

*  Zambia's 2019 maize output expected to fall 16 pct to 2 mln tonnes

*  South Africa's MTN registers Nigerian business shares before listing

*  Kenya house committee opposes Kenya Airways' takeover of main airport

*  Steinhoff set to release 2017 results, shares rise

*  As IPO looms, Uber clings to hard-knuckled tactics in pursuit of growth

*  Trade war: Trump says China 'broke the deal' in trade talks

*  Amazon accused of failing pregnant workers

*  Mike Pompeo warns UK over Huawei 'security risks'

*  Trade war: US-China trade battle in charts

*  Trump: Billion dollar losses were 'for tax purposes'

 

 


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MTN Nigeria gets listing approval, securities regulator says

ABUJA (Reuters) - Nigeria’s securities regulator has approved South African
telecoms firm MTN’s listing application for its $5 billion Nigerian unit.

 

MTN Nigeria registered more than 20 billion shares before the planned
listing in the West African country, MTN’s biggest market with 58 million
users in 2018 and accounting for a third of the group’s annual core profit.

 

“MTN sought to come to the market by way of an introduction and they wrote
to the SEC (Securities and Exchange Commission) last week requesting for
approval to register its existing shares,” the regulator said in a statement
on Wednesday.

 

“That approval has now been granted.”

 

MTN has faced challenges in Nigeria, ranging from a tax demand to a fine
over unregistered SIM cards.

 

It had said in 2016 it planned to list its local unit on the Nigerian Stock
Exchange after agreeing to pay a $1.7 billion fine to settle the SIM card
dispute with the government.

 

MTN previously said it planned to list in the first half of 2019.

 

 

 

 

 

 

 

 

 

 


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Scandal-hit Steinhoff posts $4 bln operating loss for fiscal 2017

JOHANNESBURG (Reuters) - South African retailer Steinhoff on Tuesday
reported a $4 billion operating loss in the 2017 fiscal year, in a
much-delayed earnings report revealing the impact of a $7.4 billion
accounting fraud.

 

Steinhoff, which is also listed in Frankfurt, delayed the results after
finding holes in its accounts, shocking investors who had backed its
reinvention from small South African furniture outfit into a discount
furniture retailer straddling four continents.

 

The owner of Mattress Firm Inc in the United States, the Fantastic chains in
Australia and Conforama in France said operating loss came in at 3.7 billion
euros ($4.14 billion) in the year ended September 2017 compared with profit
of 278 million euros in the restated 2016 figures.

 

The company blamed writedowns for the loss as it cleans up its balance
sheet. The total writedowns have already topped 13 billion euros since
revealing the fraud that left it on the brink of collapse and wiped out more
than 200 billion rand ($13.87 billion) of shareholder equity.

 

“The consequential impact of reversing the accounting irregularities is the
fact that the restatements highlight that several of the group’s operating
entities are unprofitable,” Steinhoff said in a 359-page annual report
posted on its website shortly before midnight.

 

An investigation by auditor PwC released in March found that eight people,
including former Steinhoff executives, were involved in a complex scheme
where potential intercompany transactions worth 6.5 billion euros were
fraudulently recorded as external income to prop up profits and hide costs
in money-losing subsidiaries.

 

The retailer has delayed releasing results several times as it waited for
the findings of the PwC investigation and audit process of its external
auditor Deloitte.

 

The 2018 results are now due on June 18.

 

FALL FROM GRACE

South Africa’s biggest corporate scandal has all but wiped out shareholders’
equity and led to several resignations, including chief executive Markus
Jooste, who was instrumental in putting Steinhoff on investors’ radar
screens.

 

Shares in the company closed 1 percent higher on Tuesday at 2.01 rand,
valuing the company at around 8 billion rand ($554.02 million), a dramatic
fall from grace in terms of market capitalisation, after it fetched more
than 240 billion rand just 17 months ago.

 

Shares in Frankfurt, where the company has a secondary listing, were up 3.5
percent at 0.1314 euros shortly after the market open.

 

The 2017 results also showed the value of Steinhoff assets was around 17.5
billion euros, or nearly half the valuation reported a year earlier. The
2016 figure - 32.2 billion euros - had to restated to 21 billion euros to
reflect the impact of writedowns stemming mainly from the so-called
“goodwill”, the intangible asset generated when one company buys another for
more than the value of its hard assets.

 

Months before Steinhoff uncovered dodgy bookkeeping practices, it had been
on an acquisition spree in Europe, scooping up Poundland in the UK and
paying an eye-popping 115 percent premium to buy Mattress Firm for $4.8
billion.

 

The disclosure of the scandal in 2017 sparked multiple investigations,
including by the elite police unit known as “the Hawks”.

 

The state prosecutor in Oldenburg, Germany, has also been investigating the
company for suspected accounting irregularities since 2015.

 

Numerous lawsuits have been filed against Steinhoff, including a
59-billion-rand claim by former chairman and top shareholder Christo Wiese
and a class action suit from Dutch shareholder rights group VEB.

 

($1 = 0.8954 euro; $1 = 14.4400 rand)

 

 

 

Kenya to upgrade old rail track to deliver Uganda link

NAIROBI (Reuters) - Kenya plans to modernise an old railway track to link a
newer line to neighbouring Uganda at a cost of $210 million, with funding
from an unidentified private backer rather than building another modern one
with Chinese money.

 

The development of Kenya’s railways has been part of China’s “One Belt, One
Road” initiative, a multi-billion dollar series of infrastructure projects
upgrading land and maritime trade routes between China and Europe, Asia and
Africa.

 

Kenya opened a modern railway linking the port of Mombasa with the capital
Nairobi in 2017 at a cost of $3.2 billion. This was then linked with another
new line, costing $1.5 billion and also funded by Chinese loans, to Naivasha
in the Rift Valley.

 

The Nairobi-Naivasha standard gauge rail (SGR) line, will be opened in
August but does not yet extend to Uganda.

 

“We need to make sure that when we commission the SGR in August, we have
connectivity to Uganda from the SGR so we have to rehabilitate that line to
make sure it is properly functional,” Kenyan transport minister James
Macharia told Reuters, adding that the work will take a year to complete.

 

Macharia said that spending $150 million to rehabilitate a decades-old line
from Malaba on the border with Uganda and using the rest to build another
short track connecting the SGR at Naivasha would be a quicker option than
building another SGR.

 

A Chinese loan worth $3.7 billion for the extension of the SGR from Naivasha
to Malaba, which was last month reported by Kenyan media to be imminent, did
not materialise, with neither government offering any explanation.

 

“It is much faster to rehabilitate because the (Naivasha-Malaba) SGR would
take three to four years,” Macharia said, without commenting on the
potential loan that fell through.

 

“Eventually we will do the SGR anyway but for the time being it is good to
have something which is working,” the minister said, adding that the funding
will come from a private firm which will recoup its investments by operating
the line.

 

“We have got a private sector partner who will do this work. And then for
the recovery we have a PPP (Public Private Partnership) arrangement with
them,” he said.

 

Critics say Kenya is saddling future generations with debt from China, while
the government says borrowing to build the infrastructure will spur economic
development.

 

 

Zambia's 2019 maize output expected to fall 16 pct to 2 mln tonnes

LUSAKA (Reuters) - Zambia’s 2019 maize production is expected to fall 16
percent to about 2 million tonnes from 2.39 million tonnes last year, the
country’s Agriculture Minister Michael Katambo said on Wednesday.

 

Katambo said that the reduced maize production was largely due to prolonged
dry weather.

 

Zambia still had enough maize stocks for human and industrial use until the
next harvest next year, Katambo said.

 

The southern African country had carry-over stocks of maize amounting to
474,515 tonnes from the last season, including more than 300,000 tonnes held
in strategic reserves, he said.

 

Zambia had a total of 2.47 million tonnes of maize available, above its
total requirement of 1.96 million tonnes, Katambo said.

 

 

 

South Africa's MTN registers Nigerian business shares before listing

LAGOS (Reuters) - MTN has registered more than 20 billion shares of its $5
billion Nigerian business before its planned listing of the unit in the West
African nation, the South African telecoms firm said on Tuesday.

 

It announced the move shortly after a judge cleared Africa’s biggest
telecoms firm on Tuesday of missing a deadline to file a challenge against a
$2 billion tax demand, the latest row with the authorities to beset MTN’s
Nigerian business.

 

MTN argues that the attorney general exceeded his power when he issued the
backdated tax demand in September. State lawyers had filed a case saying MTN
did not file its challenge in time.

 

MTN Nigeria said after the judge’s ruling it had registered to list 20.4
billion ordinary shares at 0.02 naira ($0.0001) each with Nigeria’s
securities regulator, before listing the business that MTN valued at about
$5 billion last year.

 

“We have achieved another milestone in our listing process,” MTN Nigeria
Chief Executive Ferdi Moolman said in a statement.

 

The company said it had started talks with the stock exchange to complete
the listing and would meet investors to discuss the plans on May 16.

 

It has previously said it did not plan to raise funds from investors
immediately via the listing.

 

Nigeria is MTN’s biggest market, with 58 million users in 2018 and
accounting for a third of the firm’s annual core profit. But the business
has faced challenges in Nigeria, ranging from the tax demand to a fine over
unregistered SIM cards.

 

MTN had said in 2016 it planned to list its local unit on the Nigerian Stock
Exchange after agreeing to pay a $1.7 billion fine to settle the SIM card
dispute with the government.

 

It previously said it planned to list in the first half of 2019.

 

In the tax case, a hearing into whether the auditor general acted within his
rights is scheduled for June 26.

 

“MTN maintains that it is fully compliant with Nigerian tax laws. The
company remains committed to meeting its fiscal responsibilities and
contributing to the social and economic development of Nigeria,” MTN said
after Tuesday’s ruling.

 

In the commercial capital Lagos, lawyers for the opposing sides had argued
over whether or not the telecoms firm responded to the tax bill within the
three-month period stipulated by law. The judge ruled that said MTN had
responded in 19 days.

 

In a separate case, MTN agreed in December to make a $53 million payment to
resolve a dispute over dividend repatriation.

 

MTN shares in Johannesburg were up 0.7 percent at 104.37 rand by 1338 GMT.

 

 

 

Kenya house committee opposes Kenya Airways' takeover of main airport

NAIROBI (Reuters) - The Kenyan parliament’s transport committee has opposed
a proposed takeover of the running of Nairobi’s Jomo Kenyatta International
Airport (JKIA) by struggling carrier Kenya Airways, a lawmaker told Reuters
on Tuesday.

 

The cabinet backed a plan last year to hand over management of the
profitable airport, the largest in the country, to the loss-making national
carrier.

 

The transport committee had instead proposed that the carrier should be
exempt from paying taxes to allow it to recover, said the member of
parliament who did not wish to be named.

 

 

Steinhoff set to release 2017 results, shares rise

JOHANNESBURG (Reuters) - Steinhoff on Tuesday is due to reveal the impact of
South Africa’s biggest corporate scandal on its finances when it publishes
2017 earnings after repeated delays caused by the lengthy process of sorting
out the retailer’s accounts.

 

Steinhoff had to put off the publication of its results after a 6.4 billion
euro ($7.17 billion) accounting fraud that stunned investors in the group
which had been expanding into discount furniture retailing in Europe.

 

The company first disclosed the hole in its accounts in December 2017,
shocking investors who had backed its transformation from a small South
African company to a multinational retailer.

 

An investigation by auditor PwC released in March revealed some of the scale
of the fraud, but shareholders still want more information and an indication
of how much Steinhoff’s remaining assets are worth.

 

Eight people, including former Steinhoff executives, were named in the PwC
investigation, which found a complex scheme where intercompany transactions
worth 6.4 billion euros were fraudulently recorded as external income to
prop up profits and hide costs in underperforming subsidiaries.[nL8N21258L]

 

Shares in Johannesburg-listed Steinhoff opened more than 8 percent higher on
Tuesday before paring gains to stand 4.02 percent up at 2.07 rand at 0914
GMT.

 

“Most of the bad news has already been priced in. They’ve already done most
of the impairments,” said BP Bernstein equity trader Vasili Girasis.

 

“The market is kind of in a ‘buy the bad news’ type of scenario because most
of it is now out and hoping that from here onwards things will be a lot more
stable and clearer.”

 

The company has already written down the value of its assets by more than
$12 billion after PwC provided its initial findings in June last year.

 

The 2017 audited and the 2016 restated results will feature a further
impairment of 1.8 billion euros of the group’s goodwill and intangible
assets as at September 30, 2017, with the value now expected to be 7.2
billion euros, the retailer said on April 30. [nL5N22C8EM]

 

The reduction followed a reassessment of the value of the goodwill and
intangible assets of Mattress Firm, a U.S. bedding retailer for which
Steinhoff paid a 115 percent premium to acquire the company in a $4.8
billion deal in 2016.

 

Mattress Firm filed for voluntary bankruptcy protection in October 2018 and
exited the process less than two months later. [nL4N1XX2O3] [nL8N1WL3C4]

 

The retailer has delayed releasing results several times as it waited for
the findings of the PwC investigation and audit process of its external
auditor Deloitte.

 

The 2018 results are now due on June 18.

 

($1 = 0.8929 euros)

 

 

 

As IPO looms, Uber clings to hard-knuckled tactics in pursuit of growth

SAN FRANCISCO/ CAPE TOWN (Reuters) - Uber co-founder and former CEO Travis
Kalanick used to tell investors he liked to keep his company teetering
between order and chaos.

 

By the time he left, it was chaos. The company was battered by a slew of
scandals, including revelations it had used illicit tactics to handicap
competitors and dodge regulators.

 

Almost two years later, under new leadership and set to debut Friday on Wall
Street in the largest U.S. public stock offering since 2014, Uber
Technologies Inc is still testing the rule of law.

 

With growth slowing, the company continues to spar with local officials
around the world looking to limit Uber cars on their streets.

 

In Cape Town, South Africa, for example, Uber dominates the market with an
estimated 7,000 drivers, most of whom are operating illegally, according to
city officials. Uber blames Cape Town’s “broken” system for approving
ride-hailing licenses.

 

In the United States, Uber has used the courts to try to block what it see
as unreasonable restrictions on its business. And it has successfully
lobbied state legislatures to pass laws preempting local ride-hailing
regulations, much to the frustration of officials in some cities where it
operates.

 

Uber insiders say CEO Dara Khosrowshahi has made strides in cleaning up a
frat-house culture that spawned allegations of sexual harassment and
embarrassing leaks of executives behaving badly.

 

But Uber’s sharp-elbowed business tactics, detailed by lawmakers, city staff
and regulators across the globe, as well as drivers and former employees,
continue to drive the company.

 

“It’s in the DNA,” a former Uber manager said. “Old habits die hard.”

 

Whether its playbook delivers the growth and profitability public market
investors will be seeking remains to be seen. Revenue growth slowed to 2.3%
in the fourth quarter over the previous quarter, a worrisome sign for a
business that lost more than $3 billion last year.

 

Uber’s economics “are not immediately or obviously attractive for
sustainable, long-term investment,” Mark Hargraves, Head of Framlington
Global Equities at AXA Investment Managers, said in a recent note to
clients.

 

An Uber spokesman declined to comment. In its IPO filing, the company said
it is “using a proactive and collaborative approach with regulators” and
“rebuilding and strengthening” its relationships with cities. Where
ride-hailing is banned, Uber is instead offering e-bike services or
partnering with traditional taxi companies.

 

Still the company acknowledged “legal and regulatory obstacles” around the
world that could impede its revenue and growth.

 

CAT AND MOUSE IN CAPE TOWN

Thousands of miles from Wall Street, Uber is pushing the bounds of
regulation.

 

In Chile, which has yet to work out a regulatory framework for ridesharing,
Uber drivers have been known to enlist passengers to help them evade transit
cops. In Mexico City, Uber has protested new safety rules it says would
limit the number of riders who could use the app. In London, Uber is on
probation after it was temporarily banned for flouting safety rules.

 

And in Cape Town, Uber has entered its fifth year of a stalemate with local
officials.

 

Every ride-hailing service in Cape Town is allotted a certain number of
operating licenses for its drivers. As of mid-April, Western Cape Province,
where the city is located, had approved 760 such licenses for Uber. But the
city estimates there are roughly 10 times that many Uber drivers plying its
streets, many of them immigrants or refugees.

 

Foreign-born drivers must also have work permits, paperwork many of them
lack, according to city aldermen and drivers.

 

Uber said it allows drivers to start work while their ride-hailing licenses
are still pending approval but that the company thoroughly vets the drivers.

 

A game of cat and mouse has ensued: drivers alert each other to the
whereabouts of traffic cops through the WhatsApp mobile messaging service.
If their cars are impounded, they pay the fines, start driving anew and wait
for Uber to reimburse them.

 

Those impound fines start at almost $500 and go up with each subsequent
offense, topping out at more than $1,000. Drivers are fined an additional
$173 each time.

 

“It’s just like gangsterism fighting for turf,” said Ivan, a South African
driver who gave only his first name.

 

Uber has spent at least $2.3 million since 2016 to reimburse drivers for the
impound fines, according to Reuters’ estimate based on data from the city.
Uber declined to say how much it had spent, but said it would continue
paying the fines to support its drivers and get them back on the road.

 

South Africa is crucial to Uber’s Africa strategy, boasting the continent’s
most-developed economy.

 

A spokesperson for Uber South Africa said Cape Town’s licensing system “is
effectively broken” and blamed the city for what it says is a backlog that
can stretch for more than two years in some cases.

 

The city estimates there is a market for about 2,100 Uber drivers. Alderman
JP Smith said part of Cape Town’s calculus is to head off violence that
could result if too many taxi drivers are put out of business by new
ride-hailing rivals. In the larger cities of Pretoria and Johannesburg, some
Uber drivers and cabbies have been killed and their cars torched as part of
an ongoing turf war.

 

“In other parts of the world, if there are too many taxis some just stop
being taxis,” Smith said. “Here, disputes between taxis are settled via
assassination and murder.”

 

The face-off may not find a resolution any time soon. Cape Town is expanding
its impound facilities so it can take in nearly twice the number of cars.

 

BAD BLOOD

Big cities concerned about gridlock, air quality and the safety of
passengers and drivers are crafting new policies and demanding more data
from ride-hailing companies to find solutions.

 

Uber is pushing back. The company sued New York City in February over a law
imposing a cap on the number of ride-hailing drivers, a move taken to
address worsening traffic. In its hometown of San Francisco, Uber is
fighting a court order to turn over data the city says would help improve
traffic management and the safety of Uber drivers.

 

As city officials in the United States have gotten scrappier, Uber has
sought out friendlier state legislators to work around them.

 

Over just four years, Uber and rival Lyft helped pass laws in 41 states that
put ride-hailing under the state’s jurisdiction, preempting some or all
local regulations, according to a 2018 study by the National Employment Law
Project.

 

Uber is now pushing legislation in Oregon that would preempt local mandates
on driver caps, permits, data collection and access for passengers in
wheelchairs, among others.

 

Uber’s general manager for Oregon said the bill would create “increased
mobility for rural and urban communities,” by bringing Uber to towns that
currently do not allow it.

 

Officials in Portland say their city is in the crosshairs. After Uber
launched there in late 2014, Portland sued to stop its operation, declaring
it illegal. That suit was later dropped, but Portland regulates Uber
closely.

 

Noah Siegel, interim assistant director at the Portland Bureau of
Transportation, said the proposed legislation would hurt the city’s ability
to manage growth and ensure everyone can get around safely.

 

“We were not really holding a lot of bad blood about what had happened” with
Uber in the past, Siegel said. “But this bill serves as a reference point
that it’s only been four years and they still haven’t turned a profit and
they will do anything to make money.”

 

 

 

Trade war: Trump says China 'broke the deal' in trade talks

US President Donald Trump said China "broke the deal" in trade talks,
ramping up hostilities ahead of negotiations between the two sides.

 

The comments come as Beijing said it would retaliate with "necessary
countermeasures" if the US raises tariffs on Chinese products.

 

Mr Trump has vowed to more than double tariffs on $200bn (£152bn) of Chinese
goods on Friday.

 

Despite that, the two sides are due to hold trade talks in the US on
Thursday.

 

Ahead of the discussions, Mr Trump accused China's leaders of breaking the
deal the US was negotiating on trade.

 

"They broke the deal... They can't do that. So they'll be paying," Mr Trump
told supporters at a campaign rally in Florida.

 

He said if the two sides don't make a deal, there was "nothing wrong with
taking in more than $100bn a year".

 

Only recently, the two sides seemed to be nearing an agreement that would
put an end to the trade war.

 

But on Sunday Mr Trump said on Twitter the US would hike tariffs on $200bn
worth of Chinese goods this week and could introduce fresh tariffs.

 

US Trade Representative Robert Lighthizer later accused China of
backtracking on commitments in trade talks. However, he insisted a deal with
Beijing was still possible.

 

Tariffs are taxes paid by importers on foreign goods, so a 25% tariff
imposed by the US on Chinese goods would be paid by American companies.

 

The escalation of the trade war has sent waves across financial markets.

 

The Hang Seng index was down 1.2% and the Shanghai Composite shed 0.8% in
early trading on Thursday.

 

Report

What will happen on Friday?

Mr Lighthizer released an official notice on Wednesday that duty rates on a
vast array of Chinese-made electrical equipment, machinery, car parts and
furniture would jump to 25% on Friday.

 

Tariffs on $200bn of Chinese goods were supposed to rise to 25% from 10% at
the start of the year but that was postponed as negotiations advanced.

 

If they go ahead, the Chinese have said they will retaliate in kind.

 

"The escalation of trade friction is not in the interests of the people of
the two countries and the people of the world," the Chinese Commerce
Ministry said in a statement.

 

"The Chinese side deeply regrets that if the US tariff measures are
implemented, China will have to take necessary countermeasures."

 

Mr Trump has also said the US could hit another $325bn of Chinese goods with
a 25% tariff "shortly".

 

The two sides have already imposed tariffs on billions of dollars worth of
one another's goods, creating uncertainty for businesses and weighing on the
global economy.

 

The International Monetary Fund has said the escalation of US-China trade
tension was one factor to have contributed to a "significantly weakened
global expansion" late last year as it cut its 2019 global growth
forecast.--BBC

 

 

Amazon accused of failing pregnant workers

A US woman is suing Amazon, alleging that she was sacked because she was
pregnant, raising more questions about working conditions in its warehouses.

 

According to tech news site CNET, the online retailer has been involved in
seven similar legal cases brought by pregnant warehouse workers in the past
eight years.

 

And all of these women allege Amazon failed to accommodate their needs.

 

In response, Amazon said it had never sacked anyone for being pregnant.

 

Amazon told BBC News: "It is absolutely not true that Amazon would fire any
employee for being pregnant.

 

"We are an equal opportunity employer.

 

"We work with our employees to accommodate their medical needs, including
pregnancy-related needs.

 

"We also support new parents by offering various maternity and parental
leave benefits."

 

It did not comment on the cases, most of which were settled out of court.

 

The latest, brought by Beverly Rosales, who worked at Amazon's Golden State
fulfilment centre, is due to be heard in the Superior Court of California in
June.

 

It is not the first time questions have been raised by Amazon warehouse
workers charged with preparing and shipping the millions of orders placed
online every day.

 

Amazon has more than 613,000 employees, with 100,000 temporary workers
employed over the Christmas period.

 

'Told I could not be transferred'

The GMB Union, which represents employees from many employment sectors in
the UK, told the BBC that it had heard from one woman, who asked to remain
anonymous.

 

It said she told them: "When I found out I was pregnant, I asked my manager
to be transferred to a different department.

 

"I was told I could not be transferred and must continue picking, which
involves bending, stretching and moving a heavy cart, and walking miles."

 

In response, Amazon said it could not comment on "anecdotal" cases and had
not been provided with "any evidence that would allow us to investigate".

 

But it added: "Once an employee informs us they are pregnant we work closely
with them and carry out a full risk assessment and, if necessary, consult a
doctor.

 

"If the employee's health or that of the unborn child is at risk due to the
work they are employed to do at Amazon, we will vary the employee's
conditions to alleviate any risk, or find the employee a suitable,
alternative role. We will, as a last option, place the employee on full paid
sick leave."

 

A spokesman for the GMB told the BBC: "We really hoped that Amazon had
learnt its lesson from the report we published in 2014. Sadly that does not
appear to be the case.

 

"Pregnant women telling us they are forced to stand for 10 hours. Companies
like Amazon should be treating staff with respect, not treating them like
robots."--BBC

 

 

 

Mike Pompeo warns UK over Huawei 'security risks'

US Secretary of State Mike Pompeo has urged the UK to prioritise its
security interests and those of its allies when dealing with Chinese firm
Huawei.

 

Speaking in London, he said the US had "made its views well known" on
Huawei's potential role in the UK's 5G network.

 

He said the US must protect its UK operations from "security risks" and
ensure data partners were "trusted".

 

Foreign Secretary Jeremy Hunt said the UK would never "compromise" its
ability to share intelligence with the US.

 

Following talks with his US counterpart, Mr Hunt insisted no decision had
been taken on whether to involve the Chinese firm in the development of the
UK's next generation broadband services, adding that ministers were still
"considering the evidence".

 

Huawei leak not criminal offence, police say

Gavin Williamson sacked over Huawei leak

The issue caused a major political row last week when defence secretary
Gavin Williamson was sacked from cabinet after leaks of discussions from a
National Security Council meeting.

 

This followed media reports suggesting a decision had been taken in
principle to award Huawei contracts for non-core elements of the new
network.

 

The US is alarmed at the growing global reach of Huawei, which its critics
say is an arm of the Chinese Communist Party and is being used a vehicle to
spy on foreign countries.

 

After talks with Theresa May and Mr Hunt, Mr Pompeo warned of Chinese
attempts to "peddle corrupt infrastructure deals in return for political
influence" around the world.

 

Referring to Chinese expansion in East Asia, he urged the UK "to be equally
vigilant and vocal against those other Chinese activities which undermine
the sovereignty of all nations".

 

Huawei and the US: A short, medium and long explanation

Why is the UK at odds with its cyber-allies over Huawei?

While the UK had the sovereign right to take its own commercial decisions,
he indicated the US expected its trusted ally to put security, not financial
interests, first.

 

"I am confident that each of our two nations will choose the path to ensure
the security of our networks," he said.

 

Pressed on the issue, he hinted that the US could re-consider some of its
extensive defence and economic interests in the UK if the Huawei deal went
ahead.

 

"We are making our views very well known.

 

"The US has an obligation to ensure the places where we operate, places
where US information is, places where we have national security risks, that
they operate within trusted networks and that is what we will do."

 

Iran and Venezuela

Mr Pompeo said the so-called special relationship between the two countries
was "not just enduring but thriving".

 

But the talks also exposed differences in the two countries' approach to
Iran, after Tehran announced it was pulling out of key commitments under the
2015 international nuclear deal.

 

Last year, President Trump withdrew the US from the multinational accord
designed to curb Iran's nuclear ambitions, but the UK and other nations
remain signed up to it.

 

Mr Hunt said Tehran's move was "unwelcome" and while the UK remained
committed to a multinational approach to preventing Iran acquiring a nuclear
bomb, he said there would be "consequences" for Tehran if it did not
reconsider.

 

Mr Pompeo's first trip to the UK as Secretary of State comes three weeks
before US President Donald Trump's own state visit next month.

 

He said Mr Trump was eager to begin work on negotiating a trade deal with
the UK and hoped Britain could resolve the current Brexit stalemate.

 

He also criticised what he described as some political leaders' "disgusting"
support for the regime of Venezuelan leader Nicolas Maduro.

 

Labour leader Jeremy Corbyn, who has decided to boycott an official banquet
for Mr Trump next month, has expressed admiration for the Maduro government
in the past.

 

Unlike other UK politicians, he has not joined calls for the socialist
leader to quit following months of social unrest and violence and after the
international community recognised opposition leader Juan Gaido as lawful
president.--BBC

 

 

 

Trade war: US-China trade battle in charts

The trade war between the US and China - which seemed to be nearing an end -
has suddenly escalated with the threat of new tariffs.

 

US President Donald Trump vowed to more than double tariffs on $200bn
(£153bn) of Chinese goods on Friday and to introduce fresh ones "shortly".

 

Despite this, the Chinese are starting two days of negotiations with the US.

 

The US president's threat to raise tariffs comes amid claims Beijing is
trying to row back on a trade deal.

 

The world's two largest economies have already imposed duties on billions of
dollars worth of one another's goods.

 

A further escalation in the trade dispute would create renewed uncertainty
for businesses and consumers, hurting the world economy.

 

Here are some of the central issues in the US-China trade dispute:

 

1) How has the US trade deficit grown?

The US, which accuses China of unfair trading practices, launched a trade
war against China last year.

 

Not only does the US accuse China of stealing intellectual property, but it
wants Beijing to make changes to its economic policies, which it says
unfairly favour domestic companies through subsidies.

 

The US also wants China to buy more US goods to rein in its lofty $419bn
(£321.2bn) trade deficit with China.

 

The trade deficit is the difference between how much the US imports from
other countries and how much it exports. Reducing the gap is a key part of
Mr Trump's trade policies.

 

2) What tariffs have been imposed so far?

The US imposed tariffs on $250bn worth of Chinese products last year.
Beijing has retaliated with duties on $110bn worth of American products.

 

Tariffs on $200bn worth of Chinese goods were due to rise to 25% from 10% at
the start of this year, but this hike was delayed.

 

Now, Mr Trump is saying this increase will go ahead on Friday because talks
with Beijing are progressing "too slowly".

 

On top of that, he has vowed to slap 25% duties on another $325bn of Chinese
goods "shortly".

 

3) What products could be affected?

The Chinese products hit by US tariffs since the beginning of the trade war
have been wide-ranging, from machinery to motorcycles.

 

In the latest round, the US imposed 10% duties on $200bn worth of Chinese
products including fish, handbags, clothing and footwear.

 

Those products will be the ones targeted with a tariff hike from 10% to 25%,
if it goes ahead this week.

 

China accuses the US of starting the biggest trade war in economic history.
It has targeted US goods ranging from chemicals, to vegetables and whiskey.

 

It has also strategically targeted products made in Republican districts,
and goods that can be purchased elsewhere, like soybeans.

 

4) Has the trade war hit the markets?

The US-China trade war has been a great source of uncertainty for financial
markets over the past year. That uncertainty has weighed on investor
confidence around the world, and has contributed to losses.

 

In 2018, Hong Kong's Hang Seng index fell more than 13% and the Shanghai
Composite slumped nearly 25%.

 

Both indices have recovered some ground this year and are up 12% and 16%
respectively so far in 2019.

 

By comparison, the Dow Jones Industrial Average fell nearly 6% in 2018 and
is already up some 11% this year.

 

The yuan fell over 5% against the US dollar last year, before broadly
stabilising in 2019, according to Reuters.

 

5) What other trade battles are going on?

The US-China trade war has had a knock-on effect on other countries, and the
global economy.

 

The International Monetary Fund (IMF) said the escalation of US-China trade
tension was one factor to have contributed to a "significantly weakened
global expansion" late last year as it cut its 2019 global growth forecast.

 

Some countries may also be indirectly impacted - especially those that are
important trading partners for the US or China - or play key roles in their
supply chains.

 

The battle with China is one of a series of trade fights the US has waged
with other countries over the past year.

 

Mr Trump has imposed taxes on imports from Mexico, Canada and the European
Union, to encourage consumers to buy American products. All of these
countries retaliated with tariffs on US goods.--BBC

 

 

Trump: Billion dollar losses were 'for tax purposes'

President Trump has said the losses his business made in the eighties and
nineties were "for tax purposes".

 

He was tweeting in reply to a New York Times (NYT) article claiming that
from 1985-95 he made losses of over $1bn.

 

The newspaper said that Mr Trump's property empire from 1985 "continued to
lose money every year, totalling $1.17bn in losses for the decade".

 

Mr Trump tweeted "You always wanted to show losses... and often re-negotiate
with banks, it was sport."

 

Report

What did the NYT say?

The NYT said that while Mr Trump has always described himself as a
successful property tycoon he was for at least a decade during the eighties
and nineties making huge losses on his core businesses, largely casinos,
hotels and retail space in apartment buildings.

 

It wrote: "Year after year, Mr Trump appears to have lost more money than
nearly any other individual American taxpayer, The Times found when it
compared his results with detailed information the [Internal Revenue Service
or I.R.S.] compiles on an annual sampling of high-income earners.

 

"His core business losses in 1990 and 1991 — more than $250m each year —
were more than double those of the nearest taxpayers in the I.R.S.
information for those years."

 

"Overall, Mr Trump lost so much money that he was able to avoid paying
income taxes for eight of the 10 years."

 

How did Trump respond?

Apart from calling the NYT story old, inaccurate and "Fake News", Mr Trump
claimed that : "Real estate developers in the 1980's & 1990's, more than 30
years ago, were entitled to massive write offs and depreciation which would,
if one was actively building, show losses and tax losses in almost all
cases.

 

"Much was non monetary. Sometimes considered 'tax shelter,' you would get it
by building, or even buying."

 

Plaza casino in Atlantic City, New Jersey, part of Trump's Plaza
Partnership, which had its debts restructured in 1992

Is the president right?

Steve Rosenthal, a tax lawyer and policy analyst, explained that tax relief
for property development in the US was, and still is, very generous.

 

Mr Rosenthal said Mr Trump borrowed heavily and used tax relief available on
income generated by borrowed funds. But when Mr Trump defaulted on those
borrowings and re-negotiated his loans that relief should, in theory, have
ended.

 

Mr Rosenthal wrote a paper called Protecting Trump's $916 Million of NOLs
(net operating losses). In it he said: "Documents filed in the bankruptcy
court suggest that Trump aggressively stretched the law to side-step
hundreds of millions of dollars of taxable income from restructuring his
public debt."

 

Mr Rosenthal tweeted his response to the president: "Sure, Trump operated
his businesses at a spectacular loss. But he borrowed, spent, and deducted
money from other people. And, after he defaulted on the funds he borrowed,
he did not report income."

 

How did the NYT get the information?

The NYT has said it was unable to obtain Mr Trump's tax returns but received
the information contained in them from someone who had legal access to it.

 

The NYT said it "was then able to find matching results in the I.R.S
information on top earners — a publicly available database that each year
comprises a one-third sampling of those taxpayers, with identifying details
removed."

 

President Trump has consistently refused to publish his tax returns and
Treasury Secretary Steven Mnuchin on Tuesday refused a request from
Democratic lawmakers for Mr Trump's more recent returns. Mr Mnuchin said the
request "lacks a legitimate purpose," and raised constitutional questions
and threatened taxpayer privacy.

 

What else has the NYT written about Trump?

The NYT has been unapologetically critical of Mr Trump's presidency and in
June 2017 published an article entitled: "Trump's Lies: The Definitive
List".

 

In September last year, the paper published an anonymous piece called "I am
Part of the Resistance Inside the Trump Administration" which claimed that
there were officials within the President's White House who had "vowed to
thwart parts of his agenda and his worst inclinations".

 

In October last year, the NYT published an article detailing how Mr Trump
had inherited hundreds of millions of dollars from his father's real estate
empire through "dubious tax schemes", contradicting the President's claims
that "I built what I built myself."

 

What does Mr Trump say about the NYT?

Mr Trump calls the NYT The Failing New York Times.

 

After the publication of the "Resistance" piece in the NYT Mr Trump called
for the paper to reveal the identity of the writer which the paper said "is
known to us".

 

Mr Trump described the article in a tweet as "TREASON?"

 

Then in a follow up tweet, he wrote: "If the GUTLESS anonymous person does
indeed exist, the Times must, for National Security purposes, turn him/her
over to government at once."--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
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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