Major International Business Headlines Brief::: 13 May 2019

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Major International Business Headlines Brief::: 13 May 2019

 


 

 


 <http://www.nedbank.co.zw/> 

 


 

 


 

 

*  Glencore's Zambian unit to close two mine shafts

*  Sudan delivers fuel to power stations, has enough flour for June

*  South African rand firms as ANC heads for re-election

*  Nigeria stocks at 2-year low after cenbank governor gets second term
nomination

*  Miner Lonmin says delays in Sibanye-Stillwater deal to hurt sales

*  South Africa's competition court to rule on Sibanye and Lonmin merger

*  Nigeria central bank head nominated for second term

*  IMF provisionally agrees three-year loan deal with Congo Republic

*  Acacia Mining hits back at parent Barrick in Tanzania row

*  Arriva sues government over East Midlands franchise

*  Uber shares sink on stock market debut

*  UK economy rebounds in first quarter

*  US states file lawsuit accusing drugs firms of inflating costs

*  US will suffer from tariffs, Trump aide Larry Kudlow admits

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

                                      


Glencore's Zambian unit to close two mine shafts

LUSAKA (Reuters) - Zambia’s Mopani Copper Mines plans to close two shafts at
its Nkana mine in Kitwe, the Glencore-owned company said on Friday, a move
that union sources said could affect more than 2,000 workers.

 

Mopani said in a statement it would cease operations at the Mindola north
and central shafts of the Nkana mine and instead focus on other activities.

 

“We believe this approach will enable us to focus on achieving both safe and
productive outcomes which are essential to position Mopani for a successful
future,” it said.

 

Mopani suspended operations at its Mindola north shaft in February after
three workers were killed in a fire.

 

The company said the shafts had reached the end of their economic life and
their closure had always been planned.

 

However, it added that action was being taken sooner than originally
foreseen because its “limited resources” meant it could no longer afford to
operate “old and inefficient” shafts.

 

“We anticipate that these measures will regrettably result in the loss of
direct employee and contractor jobs,” it said.

 

Mine Workers Union of Zambia (MUZ) President Joseph Chewe said the closure
of the two shafts would affect 600 direct employees.

 

“If these workers are not re-deployed, then they will lose their jobs,”
Chewe told Reuters by phone.

 

Other union sources who spoke on condition of anonymity said 1,500
contractor employees would also lose their jobs because of the closure.

 

The company could not immediately be reached for comment on the exact number
of workers that could be affected.

 

 

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 



Sudan delivers fuel to power stations, has enough flour for June

KHARTOUM (Reuters) - Sudan said on Friday it has delivered fuel supplies to
power stations and is working on solutions to a cash crisis, addressing some
of the main triggers for mass protests that led to the ouster of President
Omar al-Bashir last month.

 

General Ibrahim Jaber, a member of Sudan’s ruling Transitional Military
Council (TMC) also said that flour supplies were sufficient to cover the
needs of the country of 40 million through the end of June.

 

The problems pose challenges to the TMC, set up after generals deposed
Bashir and arrested him on April 11.

 

Concern over the shortages increased ahead of the Muslim fasting month of
Ramadan, which began last week. Consumption rises during Ramadan, when
Muslims fast from dawn to dusk.

 

The TMC is locked in a standoff with protesters over who will control a
proposed joint civilian-military body to oversee the country until elections
can be held. Protests have continued in a bid to push the council to cede
power to civilians.

 

“Fuel supplies have been supplied to all of Sudan,” Jaber said according to
state television. “Fuel has (also) been delivered directly to power stations
and they have started working.”

 

Most residential areas in the capital experience near-daily electricity
outages for hours. The increasing blackouts occurred as Khartoum’s
temperatures soared to 47 Celsius (117 Fahrenheit).

 

Jaber also said the TMC was considering issuing special cards for citizens
to purchase fuel as a way of coping with the cash shortages that had plagued
the country for months.

 

“This is a step that will reduce the transfer of currency outside the
banking system,” he said.

 

Citizens have been queuing for hours at banks or ATM machines to withdraw
cash. The maximum daily withdrawal has long been set at 2,000 Sudanese
pounds ($44.45).

 

Bashir’s government had run up enormous budget deficits by subsidising fuel,
bread and other products. To cover the deficit, it expanded the money
supply.

 

($1 = 44.9902 Sudanese pounds)

 

 

 

South African rand firms as ANC heads for re-election

JOHANNESBURG (Reuters) - South Africa’s rand strengthened more than 1% on
Friday on expectations of political continuity, as the governing African
National Congress (ANC) headed for a national election victory.

 

The ANC held a commanding lead with 94% of voting districts counted,
according to the electoral commission’s website. It had secured 57.7% of the
vote, with the main opposition Democratic Alliance (DA) on 20.6% and the
leftist Economic Freedom Fighters (EFF) on 10.5%.

 

At 1545 GMT, the rand traded at 14.1900 per dollar, 1.08% firmer than
Thursday’s New York close.

 

“The rand has already rallied a couple of percentage points from 14.45, with
its strong run starting just before the vote and consolidating as the
election outcome get clearer and more resilient to surprises,” said TS
Securities in a note.

 

“Preliminary results indicate that (the) ANC has got close enough to allow
further rand strength in the near future.”

 

Also powering the rand were hopes that the U.S. and China will find a middle
ground in their trade dispute, said FXTM Research analyst, Lukman Otunuga in
a note.

 

In fixed income, the yield on the benchmark bond due in 2026 was down 9
basis points at 8.460 percent.

 

Stocks also rose on the election news, tracking gains in other emerging
markets too. The Johannesburg All-share index rose 0.5% to 56,780 points,
while the Top-40 index firmed 0.54% to 50,533 points.

 

Leading blue-chip gainers were financial stocks, with Standard Bank up 4.08%
and FirstRand up 3.72%. Absa Group and Nedbank climbed 3.43% and 3.13
percent respectively.

 

 

 

Nigeria stocks at 2-year low after cenbank governor gets second term
nomination

ABUJA (Reuters) - Nigerian stocks dropped to almost a two-year low on Friday
as investors viewed the nomination of central bank governor for a second
term as a sign that there may be no change to the monetary policy that has
kept liquidity tight, traders said.

 

The main share index fell 0.37% to 28,789 points, a level not seen since May
2017.

 

 

 

Miner Lonmin says delays in Sibanye-Stillwater deal to hurt sales

(Reuters) - Platinum miner Lonmin, which is in the process of being taken
over by Sibanye-Stillwater, expects full-year sales to be at the lower end
of its target range, it said on Friday after reporting a drop in output.

 

The London-based company, which operates in South Africa, said total
platinum production tumbled 10.3 percent to 276,020 ounces for the six
months ended March 31.

 

Lonmin’s first half was hampered by what it called “low morale and high
management turnover” due to delays in closing the Sibanye-Stillwater deal,
as well as safety stoppages and power outages related to South African power
supplier Eskom.

 

Owing to that, Lonmin said full-year sales would be at the lower end of a
target range of 640,000-670,000 platinum ounces, and it raised cost guidance
to 13,600-14,400 rand per ounce produced, from the 12,900-13,400 rand it had
earlier expected.

 

Lonmin has been cutting thousands of jobs and reigning in costs to weather
tough market conditions. In April it agreed to a revised all-stock deal with
Johannesburg-listed Sibanye-Stillwater.

 

However, Lonmin reported an operating profit of $70 million for the first
half compared with an operating loss of $32 million a year earlier, thanks
to a pick-up in prices and a weaker rand-to-dollar exchange rate.

 

The company, which has warned on liquidity earlier this year, said it did
not have adequate capital to invest in the new projects that were needed to
avoid shaft closures and job losses, adding it still lacked a long-term
solution to the capital challenges it faces.

 

“We remain convinced that consolidation through the announced offer from
Sibanye-Stillwater creates the best way forward for our shareholders and all
our stakeholders,” Chief Executive Officer Ben Magara said in a statement.

 

 

 

 

South Africa's competition court to rule on Sibanye and Lonmin merger

JOHANNESBURG (Reuters) - South Africa’s Competition Appeals Court will rule
next week on a union request to block the mining deal in which
Sibanye-Stillwater intends to acquire rival Lonmin, legal counsel said on
Friday.

 

The Association of Mineworkers and Construction Union (AMCU) lodged its
appeal in protest against job cuts related to the deal.

 

 

Nigeria central bank head nominated for second term

ABUJA (Reuters) - Nigeria’s central bank governor Godwin Emefiele has been
nominated for a second five-year term, a move that could comfort bondholders
keen to see the bank’s policy of a stable and strong currency continue.

 

President Muhammadu Buhari, who has backed Emefiele’s monetary policy,
nominated him for another term, according to a letter read on the floor of
the senate on Thursday. The upper house of parliament is expected to confirm
the nomination.

 

Emefiele has overseen an interventionist currency policy at the behest of
the presidency, propping up the local naira by pumping billions of dollars
into the foreign exchange market.

 

He also introduced a multiple exchange rate regime to try to mask pressure
on the naira and avoid a series of devaluations, a step that has kept
liquidity tight in Africa’s biggest economy.

 

The bank cut rates to 13.4 percent in March, its first rate cut since
November 2015. The rate has been held at 14 percent since July 2016 to
support the naira and curb inflation.[nL8N21D4KK]

 

Buhari, who starts his second four-year term on May 29, has pledged to
rejuvenate the Nigerian economy, sub-Saharan Africa’s largest energy
producer. Emefiele has offered affordable credit to boost some industries to
offset curbs on access to foreign exchange for those sectors imposed to
protect local producers.

 

A central bank spokesman said Emefiele’s nomination was in recognition of
his “patriotism and irrepressible commitment to the growth and development
of the Nigerian economy”.

 

Emefiele, whose first term was due to end this month, will be the first
central bank governor to have his tenure extended into a second term since
Nigeria’s return to democracy in 1999.

 

“The idea of continuity might give some comfort to foreign investors who
will expect a policy of naira stability to continue,” said Razia Khan, head
of research for Africa at Standard Chartered Bank in London.

 

“This lessens the risk of any near-term profit-taking.”

 

NO SHIFT IN POLICY

Emefiele’s return could be supportive for bonds as investors hunt for yields
on the debt market while equity players worry about slow growth, expecting
sentiment to remain weak for stocks, analysts say.

 

More than $6 billion has flowed into the local bond market since February’s
presidential election as foreign investors piled into debt to lock in yields
as high as 14 percent, helping to keep the currency stable. [nL8N2182YK]

 

“Governor Emefiele’s nomination means that we will likely not see a major
change in the conduct of monetary policy or a much-needed shift in Nigeria’s
diversification strategy,” said Cobus de Hart, senior economist at South
Africa’s NKC African Economics.

 

Nigeria entered and exited its first recession in a quarter of a century
under Emefiele’s tenure as global oil prices plummeted and then gradually
began to rebound.

 

Some economists have argued that his strong currency policy exacerbated the
downturn.

 

Anthony Simond at Standard Aberdeen Asset Management in London said he
expected a continuation of current monetary policy. “Whether it will be good
for the country in the long run is a different question. But for now, high
carry and stable FX will continue,” he said.

 

Emefiele has said the bank would continue its tight monetary stance in the
near term and sees inflation of 11.3 percent in February rising to 12
percent this year before moderating.

 

“(Buhari) just doesn’t accept that a lot of his policies have been
counter-productive, and sees no reason to change now,” said John Ashbourne,
African economist at Capital Economics.

 

 

 

IMF provisionally agrees three-year loan deal with Congo Republic

DAKAR (Reuters) - An International Monetary Fund mission said on Thursday
that it had agreed a three-year lending programme with Congo Republic
subject to the government’s fulfilment of reforms and approval by the IMF’s
executive board.

 

Negotiations over a bailout for the oil-dependant economy have dragged on
since 2017, as Congolese authorities failed to convince the IMF they were
doing enough to control the national debt or tackle corruption.

 

But Congo’s reduction of its debt load and an agreement struck last month to
restructure some $2 billion in debt to China led the IMF mission to back a
programme.

 

“Once the authorities have implemented the pending actions as agreed during
the mission, the IMF team will submit a report in support of the Republic of
Congo’s request for a three-year arrangement under the Extended Credit
Facility,” the mission said in a statement after a week-long visit.

 

The agreed measures include submitting a report to parliament on notoriously
opaque oil-backed loans that the state petroleum company has taken out with
private lenders.

 

The mission also said that Congo’s economy is expected to grow more than 5
percent in 2019, up from less than 1 percent in 2018, mainly because of a
rise in oil production and prices.

 

The economy was hurt by a sharp drop in oil prices in 2014, causing debt
levels to balloon to 118 percent of GDP in 2017.

 

But global oil prices last month hit their highest level in five months,
helping Congo cut debt levels to less than 85 percent of GDP.

 

 

 

Acacia Mining hits back at parent Barrick in Tanzania row

LONDON (Reuters) - Acacia Mining on Thursday hit back at parent company
Barrick Gold Corp’s allegation the miner was an obstacle to solving a
long-running tax row in Tanzania.

 

Barrick CEO Mark Bristow said in a results presentation on Wednesday that
Acacia was not cooperating, prompting Acacia to demand clarification from
Barrick.

 

Acacia’s interim Chief Executive Officer Peter Geleta said in an interview
that Acacia was “totally committed to achieving a negotiated solution” and
laid out what he said was a series of facts.

 

Acacia had already been in discussion with Tanzania’s government in June
2017 when Barrick intervened without Acacia inviting it, he said.

 

“Barrick’s intervention at such an early stage of the dispute when Acacia
was talking to the government of Tanzania undermined Acacia’s status, put
both Acacia and Barrick into a difficult position and added a level of
complexity that was unhelpful to an expedient resolution to the dispute.
These are the facts and one cannot deny this,” Geleta said.   

 

Acacia has been excluded from the negotiations since Barrick’s intervention,
but Geleta said the company was engaging constructively with local, regional
and national governments and had turned around “a failing business” in
Tanzania.

 

On Thursday, it announced gold output at its North Mara mine in Tanzania had
risen 54 percent from the same time a year ago, helping to drive its share
price 3 percent higher.

 

In its production update, Acacia also said it was seeking clarification from
Barrick on Bristow’s comments, “not all of which are consistent with
Acacia’s own understanding of the position”.

 

Barrick had no immediate response on Thursday.

 

On Wednesday, Bristow said Barrick was “stuck in the middle between Acacia
and the government of Tanzania who are in a stand-off”.

 

“It will be a lot easier if Acacia were more engaging in their discussion,”
he also said, adding Barrick, the majority shareholder, was open to buying
out Acacia’s minority shareholders, but not at a premium.

 

Acacia has been caught up in sweeping changes to Tanzania’s mining industry
spearheaded by President John Magufuli, who believes his country is not
getting its fair share of profits.

 

The government has accused Acacia of evading taxes for years by
under-declaring exports - an allegation dismissed by the company which said
in 2017 it had been hit with a $190 billion tax bill.

 

 

 

Arriva sues government over East Midlands franchise

Rail giant Arriva is suing the government after it lost its bid to run the
East Midlands railway franchise.

 

The firm, owned by Germany's state-backed Deutsche Bahn, said it wanted more
information on how the Department for Transport assessed the bids.

 

The move comes after rival Stagecoach, which was banned from rebidding,
announced it was taking legal action.

 

The Department for Transport (DfT) said it had "total confidence" in its
franchise competition process.

 

The East Midlands line operates a network including routes north to south
between Yorkshire and London, and east to west as far as Norwich and
Liverpool.

 

The DfT said in April that Dutch government-owned firm Abellio would take
over the running of the East Midlands railway franchise for eight years,
starting in August.

 

On Sunday, the DfT said it would "robustly defend decisions that were taken
fairly following a thorough and impartial evaluation process".

 

But Arriva said it was "seeking to obtain more information relating to how
the bids for the East Midlands franchise were assessed".

 

Abellio already operates five other rail franchises, including Scotrail and
Greater Anglia services between Norwich and London.

 

Stagecoach, the current owner of the franchise was disqualified from
re-bidding after the DfT raised concerns about its pension commitments.

 

It was also barred from bidding for the South Eastern and West Coast
Partnership franchises after the DfT said it "knowingly submitted
non-compliant bids on all competitions".

 

Sir Richard, whose Virgin Trains is 49% owned by Stagecoach, said at the
time that he was "devastated" by the disqualification.

 

Martin Griffiths, chief executive of Stagecoach, said on Wednesday that the
company had "no option" but to pursue legal action to examine DfT's "opaque
decision-making".

 

"We remain deeply concerned at [DfT's] procurement of the three most recent
rail franchise competitions and the rationale behind its decisions," he
said.

 

"Despite our continued requests for full transparency around these matters,
many fundamental questions remain unanswered."--BBC

 

 

 

Uber shares sink on stock market debut

Uber shares slid to close 7.6% down on their first day of trading, as the
highly anticipated share market listing failed to win over investors.

 

Boss Dara Khosrowshahi was among those who rang the opening bell of the New
York Stock Exchange to begin trading.

 

By the end of the session shares were at $41.51 below the company's listing
price of $45.

 

On Thursday, Uber sold 180 million shares at $45 each, raising $8.1bn of
cash and valuing it at $82bn (£63bn).

 

Shares in the ride share company got off to a shaky start, opened trading at
$42, and skidded to as low as $41.06 early on.

 

Uber is yet to make a profit and warned recently it may never do so.

 

Would you buy shares in Uber?

What do drivers think of Uber?

Since its foundation in 2009, the company has lost about $9bn.

 

Mr Khosrowshahi tried to reassure investors disappointed by the falling
share price on its market debut.

 

"My reaction (to the share price) is if we build and build well,
shareholders will be rewarded. We're certainly not measuring our success
over a day, it really is over the years," Khosrowshahi said.

 

Uber had originally suggested a price range of $44-$50 for its share price
listing, valuing the company at up to $120bn.

 

Mr Khosrowshahi said the $45-a-share float price was influenced by the
uncertainty in the global economic environment.

 

Shares will now trade under the symbol UBER, after the most anticipated US
debut since Facebook in May 2012.

 

Uber co-founder Travis Kalanick, who departed the chief executive role to
make way for Mr Khosrowshahi after questions were raised about staff culture
at the firm, was also present at the exchange for Uber's debut.

 

Investors are betting on Uber's growth prospects as it diversifies into
several other sectors. As well as the original ride-hailing business, Uber
is developing driverless cars and has a food delivery operation, Uber Eats.

 

Uber's stock price spluttered on its first day as a public company. Of
course, the true test will not come in one trading day but in how it
performs in the weeks ahead.

 

The biggest stock market debut in America in five years has raised questions
about how companies like Uber should price their initial public offerings. A
particular challenge for money losing tech start-ups.

 

Shares in Uber's chief rival, Lyft have disappointed since they made their
stock market debut in March.

 

Keen to avoid that fate, Uber's underwriters priced shares at the low end of
its $44-50 price range. But that was still perhaps not conservative enough.

 

No doubt firms like WeWork and Slack will be taking notes as they prepare to
make their stock market debuts in the coming weeks.--BBC

 

 

 

UK economy rebounds in first quarter

The UK economy picked up in the first three months of the year after
manufacturers' stockpiling ahead of Brexit helped to boost growth.

 

Growth was 0.5% in the quarter, up from 0.2% in the previous three months,
the Office for National Statistics said.

 

The manufacturing sector grew at its fastest rate since 1988 in the period.

 

The ONS said this was driven by manufacturers rushing to deliver orders
before the original Brexit deadline of 29 March.

 

Pharmaceuticals was one of the sectors most affected, expanding 9.4% between
January and March.

 

Previous business surveys had shown manufacturers stockpiling goods for
Brexit in case the UK left the EU without a transition deal, which they
feared could lead to delays at UK borders.

 

What impact has Brexit had on the figures?

As well as manufacturers rushing to deliver orders before the UK was due to
leave the EU, firms also stockpiled parts.

 

This drove a surge in imports, with the total trade deficit - the gap
between what the UK imports and exports - doubling in the first quarter to a
record high, separate data from the ONS showed.

 

The total trade deficit widened from £8.9bn to £18.3bn, driven partly by a
sharp increase in imports of cars and gold.

 

However, the UK's deadline to exit the EU has since been extended until the
end of October after Prime Minister Theresa May asked the EU for more time
to negotiate a deal.

 

Does GDP tell the whole economic story?

Bank warns of 'more frequent' rate rises

Is the economy stabilising?

Chancellor Philip Hammond said the figures showed the economy remained
"robust".

 

"These GDP figures this morning show again that the UK economy is performing
robustly, despite the evidence of slowing global growth and the continued
Brexit uncertainty at home - so it's good news," he told the BBC.

 

But analysts have warned the impact of Brexit could mean the pick-up in
growth is short-lived.

 

Tej Parikh, senior economist at business lobby group the Institute of
Directors, said it could well be just "a flash in the pan".

 

"Some businesses brought activity forward early this year in preparation for
leaving the EU, so higher stocks and earlier orders have artificially bumped
up the growth numbers.

 

"In the second quarter, many firms will be keen to run down their Brexit
caches, which will drag on economic growth," he said.

 

But Ruth Gregory, senior UK Economist at Capital Economics, said the figures
offered some "encouraging signs that underlying growth gained some pace".

 

She said household consumption growth was "solid" and pointed out that
business investment grew "for the first time in four quarters".

 

What do the trade figures tell us about the economy?

There's something upbeat in today's figures and also something downbeat,
quite possibly with the same cause.

 

In spite of all the political fuss, the economy grew better than it has in a
while. At 1.8% for the year, it is almost at pre-financial crisis rates,
when growth of 2-3% a year was normal.

 

The figures can be taken to confirm predictions that there would be a boost
to economic growth from "stockpiling" - firms spending more than usual
building up their stocks of supplies, just in case a no-deal Brexit meant
cross-border trade seized up.

 

Manufacturing enjoyed a boost and more cars were imported than usual. You
can't tell from these figures alone, but that may also be due to
stockpiling: a "buy-now-while-stocks-last" effect in case the pound dropped
(making imported cars more expensive) and tariffs were imposed (ditto).

 

But here's the downer. Partly due to higher imports, the trade deficit
doubled, from £8.9bn to £18.3bn. Because we enjoy a surplus in services,
exporting more than we import, it looks even worse when you strip out
services.

 

The trade in goods deficit in the first quarter widened to a record: £43.3bn
including non-monetary gold, which rose by £6bn.

 

We know from numerous economic studies: people buy gold when they're
worried. It looks like, in the first quarter of the year, economic growth
was lifted - by anxiety. It's small, but you might call it a mini
"worry-boom".--BBC

 

 

US states file lawsuit accusing drugs firms of inflating costs

More than 40 US states have filed a lawsuit accusing pharmaceutical firms of
conspiring to artificially inflate the cost of common medicinal drugs.

 

The lawsuit alleges that as many as 20 companies have been involved in
fixing prices for over 100 drugs, including treatments for diabetes and
cancer.

 

One of the firms accused is Teva Pharmaceuticals, the world's largest
producer of generic medicine.

 

Teva, which has denied any wrongdoing, says it will defend its actions.

 

The legal action, which follows a five-year investigation, accuses drugs
companies of involvement in a scheme to boost prices - in some cases by more
than 1,000% - and was filed on Friday by Connecticut Attorney General
William Tong.

 

"We have hard evidence that shows the generic drug industry perpetrated a
multi-billion dollar fraud on the American people," Mr Tong said.

 

"We have emails, text messages, telephone records and former company
insiders that we believe will prove a multi-year conspiracy to fix prices
and divide market share for huge numbers of generic drugs."

 

A representative of Teva in the US said that the Israeli company "has not
engaged in any conduct that would lead to civil or criminal liability",
Reuters news agency reports.

 

The other 19 firms implicated in the lawsuit have yet to comment on the
allegations.

 

Fifteen individuals were also named as defendants accused of overseeing the
price-fixing scheme on a day-to-day basis.

 

The human cost of insulin in America

The little-known safety net of US healthcare

According to the lawsuit, the drugs companies allegedly conspired to
manipulate prices on dozens of medicines between July 2013 and January 2015.

 

It accuses Teva and others of "embarking on one of the most egregious and
damaging price-fixing conspiracies in the history of the United States".

 

Mr Tong said the investigation had exposed why the cost of healthcare and
prescription drugs was so high in the US.

 

America's healthcare system has been at the forefront of US politics for
years.

 

President Donald Trump has frequently promised to dismantle the Affordable
Care Act (ACA), better known as Obamacare, which was designed to make
medical cover affordable for the many Americans who had been priced out of
the market.

 

States have argued that eliminating Obamacare would harm millions of
Americans who would struggle to meet the costs of medical care.--BBC

 

 

 

US will suffer from tariffs, Trump aide Larry Kudlow admits

One of Donald Trump's top economic advisers has acknowledged the president
was wrong to suggest that China would pay tariffs on its exports to the US.

 

Larry Kudlow, who heads the National Economic Council, accepted it was US
businesses that paid the import tax.

 

He told Fox News that he believed "both sides will suffer" from the
escalating trade dispute.

 

On Friday Mr Trump tweeted that tariffs on $250bn of goods coming into the
US were being paid "by China".

 

The president argued there was "no need to rush" into a trade agreement with
China, as the US Treasury was benefiting from these "massive payments".

 

Report

However, in an interview with Fox News Sunday, Mr Kudlow admitted that it
was American businesses that paid the tariffs on any goods brought in from
China, and that US consumers would also foot the bill if firms passed on the
cost increase.

 

Mr Kudlow said he thought the tariffs would also have an impact on China's
economy, as the higher cost would reduce US demand for Chinese goods.

 

"Both sides will suffer on this," he said.

 

What you asked about US-China trade

The US-China trade war in charts

US-China trade war in 300 words

Last year the US imposed a 10% tariff on $200bn worth of Chinese products -
including fish, handbags, clothing and footwear.

 

The firms paying the additional tariff can choose to absorb it themselves,
pass it on to consumers in the form of higher prices, or ask their suppliers
to reduce their prices.

 

Last week the US said it was increasing tariffs from 10% to 25% on $200bn
(£153.7bn) of goods from China. President Trump said Beijing "broke the
deal" by backtracking on earlier commitments to change its policies.

 

Mr Trump said a process had begun to place the full 25% tariff on a further
$325bn of Chinese goods, causing concern over the impact the ongoing
tit-for-tat trade spat between the world's two largest economies might have
on global growth.

 

China said it deeply regretted the US action and would take "necessary
counter-measures".

 

Despite two days of negotiations in Washington last week there is no
indication that the two sides are any closer to resolving their differences.

 

The US argues that China's trade surplus with the US is the result of unfair
practices, include state support for domestic companies. It also accuses
China of stealing intellectual property from US firms.

 

China has responded saying it will not swallow any "bitter fruit". The
commentary is due for publication on Monday in the ruling Communist Party's
People's Daily.

 

Mr Kudlow said the sticking point was Beijing's reluctance to put agreed
changes into law.

 

Talks are expected to resume in Beijing, and Mr Kudlow said there was a
"strong possibility" that Trump would meet with China's President Xi Jinping
at a G20 summit in Japan in late June.--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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