Major International Business Headlines Brief::: 16 May 2019

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Major International Business Headlines Brief::: 16 May 2019

 


 

 


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*  MTN Nigeria to list shares in Lagos in $6 bln flotation

*  Tunisia's economic growth slows to 1.1 pct in first quarter

*  Uganda agrees to pay oil firms more to use planned pipeline

*  Kenya shortens tenor of new dual-tranche Eurobond -Refinitiv's IFR

*  Goldman Sachs to sell fixed income products in South Africa, seeks
licence

*  Platinum firms gear up for tough S.Africa wage talks

*  South Africa's retail sales up 0.2% year/year in March

*  Jumia's Nigeria chief stands by sales figures queried by short-seller
Citron

*  South Africa's Spar in final stages of talks to buy controlling stake in
Polish retail chain

*  Trump declares national emergency over IT threats

*  Pilots 'raised Boeing safety fears' months before Ethiopia crash

*  Trump-branded properties 'underperforming'

*  Huawei says willing to sign 'no-spy' agreements

*  Asda could be listed on the stock market after blocked merger

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

                                      


MTN Nigeria to list shares in Lagos in $6 bln flotation

ABUJA (Reuters) - MTN Nigeria announced plans to float its stock in Lagos on
Thursday in a deal valued at $6 billion, following the South African
telecoms group’s agreement with Nigerian regulators to settle a long-running
dispute.

 

Nigeria, MTN’s biggest market with 52.3 million users in 2017, accounts for
a third of the Johannesburg-based company’s annual core profit, but it has
faced problems in the country in recent years.

 

In December, MTN agreed to make a $53 million payment to resolve a dispute
in Nigeria. The move ended a multi-billion dollar dividend repatriation row,
hitting its share prices in Johannesburg.

 

MTN on Wednesday said the listing price was set 90 naira, determined from
private over-the-counter share deal by existing shareholders over the past
six months. It has said it would list 20.4 billion shares on the Nigerian
bourse. The price values the telecoms company at 1.84 trillion naira ($6
billion).

 

MTN, owned 78.8% by South Africa’s MTN Group, has been one of the main
beneficiaries of Nigeria’s push to liberalise its economy over the past two
decades. But it has come under increased pressure from the government to
boost local ownership.

 

MTN Group CFO, Ralph Mupita said the listing was an important step towards
increasing local ownership in MTN Nigeria and building the country’s equity
capital markets. Nigerian investors own 19.4% of MTN Nigeria.

 

The company also said it was relying on local funding in naira to mitigate
exchange rate volatility, adding it was arranging local naira financing.

 

MTN Group said the company has received approval from the Nigerian Stock
Exchange to list its shares on Thursday, giving its existing shareholders
access to trade their shares on the bourse.

 

The company also said the Nigerian unit will raise debt, adding that the
total level rose 44% to 252 billion naira ($823.66 million) in the first
quarter.

 

“This is just the beginning, we still intend to pursue a future public offer
giving more Nigerians greater access to the MTN opportunity,” Ferdi Moolman,
chief executive of MTN Nigeria, said.

 

MTN decided to list its local company in Nigeria in 2016 after agreeing to
pay a $1.7 billion fine to settle a SIM card dispute with the government.
Earlier, the company said it planned to list in the first half of 2019.

 

The company said capital expenditure in the first quarter, rose to 63
billion naira, the bulk of which went to upgrade its network, up from 18
billion naira same period last year.

 

Service revenue grew 13.4% to 282 billion naira in the first quarter, driven
by a rise in voice and data income and the addition of 2.1 million mobile
subscribers.

 

Earnings before interest, taxes, depreciation and amortization (EBITDA), a
measure of operating profit, reached 150.4 billion naira ($492 mln) in the
three months to March 2019, up from 123 billion naira a year earlier, MTN
said.

 

MTN said it targets a dividend payout ratio of at least 80% of its net
income in the medium term.

 

($1 = 305.95 naira)

 

 

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 



Tunisia's economic growth slows to 1.1 pct in first quarter

TUNIS (Reuters) - Tunisia’s economic growth slowed to 1.1 percent
year-on-year in the first quarter of 2019, as agricultural activity
declined, the state statistics institute said on Wednesday.

 

That compared with 2.7 percent in the same quarter last year and 2.1 percent
in the last three months of 2018.

 

Despite the weaker first quarter data, annual growth is expected to reach
about 3 percent this year, compared to 2.5 pct percent in 2018. Tunisia also
aims to cut its budget deficit from 5 pct in 2018 to 3.9 pct in 2019.

 

Tunisia’s economy has been recovering slowly since taking a hit following
the overthrow of autocrat Zine El-Abidine Ben Ali in 2011 and two major
militant attacks in 2015.

 

It is under pressure from foreign lenders to reduce public spending,
including subsidies on basic foods and fuel, and cut its deficit. But social
tensions make cost-cutting sensitive.

 

 

Uganda agrees to pay oil firms more to use planned pipeline

KAMPALA (Reuters) - Uganda said on Wednesday it had agreed to pay a higher
tariff to use a pipeline planned to run through neighbouring Tanzania,
boosting the prospects of a project vital for Uganda’s nascent petroleum
industry.

 

Landlocked Uganda in 2016 picked a route for a pipeline through neighbouring
Tanzania to the Indian Ocean port of Tanga to help export its crude.

 

At a length of 1,445 kilometres, the project will cost $3.5 billion and has
been described as the world’s longest electrically-heated pipeline.

 

Initially, Uganda said it had agreed with investors and Tanzania that it
would pay a tariff of $12.2 for each barrel of crude shipped through the
pipeline.

 

But the investors, which include France’s Total, later demanded a higher
tariff, according to Ugandan officials, stalling negotiations over the
project.

 

The government has agreed to increase the tariff to $12.77 per barrel after
further talks with the investors, Energy Minister Irene Muloni said in a
statement on Wednesday.

 

Total, China’s CNOOC, and Britain’s Tullow Oil jointly own the Ugandan
fields and are also eyeing varying stakes in the pipeline.

 

About two thirds of the project’s cost will be financed by debt and a
Ugandan unit of South Africa’s Standard Bank Group and Japan’s Sumitomo
Mitsui Banking Corp are jointly helping raise the credit.

 

Uganda discovered crude reserves, estimated at 6 billion barrels, more than
ten years ago in fields near the border with Democratic Republic of Congo.

 

The start of commercial production, which has been repeatedly delayed due to
the lack of essential infrastructure such as an export pipeline, is now
expected in 2022.

 

Muloni also said some preliminary surveys in a new basin in Uganda’s
Karamoja region, a semi-arid area on the border with Kenya, had shown traces
of oil.

 

“The ministry is conducting geological, geochemical and geophysical mapping
in Moroto-Kadam basin,” she said. “Work done so far shows evidence of
possible presence of a working petroleum system as demonstrated by the
encountered oil seep.”

 

The emergence of a second oil region could transform Uganda into a
significant player in Africa’s oil industry, currently dominated by Nigeria
and Angola.

 

Investors in Uganda’s planned refinery, including a subsidiary of General
Electric, have embarked on the so called front-end engineering and design
(FEED) for the project and hope to conclude it by the end of this year,
Muloni said.

 

 

Kenya shortens tenor of new dual-tranche Eurobond -Refinitiv's IFR

NAIROBI (Reuters) - Kenya shortened on Wednesday the tenor of its new
dual-tranche Eurobond issue to seven and 12 years from the 12- and 31-year
issues it had previously planned, due to changes in market conditions,
Refinitiv’s capital markets news service IFR said.

 

The East African nation offered guidance of 7.25 percent for the seven-year
bond and 8.25 percent for the 12-year tranche, Refinitiv IFR said, adding
that orders of $6 billion had so far been received.

 

 

 

Goldman Sachs to sell fixed income products in South Africa, seeks licence

JOHANNESBURG (Reuters) - Goldman Sachs is seeking a South African banking
licence as part of plans to offer fixed income products in the country,
sources and the Wall Street investment bank said, beefing up its African
operations as global rivals scale back.

 

The bank, which is in the midst of a sweeping overhaul and drive to win more
clients to counter falling revenue, said on Wednesday the expansion would
see it offer products including foreign exchange and government bonds.

 

“The long-term economic potential of South Africa is unquestionable,” Colin
Coleman, Goldman CEO of sub-Saharan Africa, said in a statement.

 

Other investment banks, including Credit Suisse and Barclays, have slimmed
down or exited their African operations altogether.

 

Credit Suisse closed its South African business last year during the
country’s first recession since 2009. Years of alleged corruption and
mismanagement have knocked confidence in the continent’s most industrialised
economy, which is still struggling for growth.

 

Sources familiar with the matter told Reuters Goldman was seeking a South
African banking licence as part of the move. The bank said its plans were
still subject to certain regulatory approvals.

 

‘TREMENDOUS OPPORTUNITY’

While some international investment banks have shrunk their presence in
Africa, local South African lenders are ramping up their corporate and
investment banking offerings elsewhere on the continent.

 

So has France’s Societe Generale. Richard Gnodde, CEO of the bank’s
international operations, said Africa was a substantial and growing part of
its business, where it saw “tremendous opportunity” to better serve clients.

 

Goldman is grappling with a slump in revenue and has been trying to expand
its client base by selling more of its core banking products.

 

It said its expansion plans include an equity trading cooperation agreement
with Investec, which would see both banks extend their equity trading
capabilities in South Africa and deepen links with African and international
institutional clients looking to invest in the region.

 

The agreement would be launched in the coming weeks and will look to expand
into additional African markets, it said.

 

Goldman also reportedly recently applied for a banking licence in Japan to
offer corporate cash management services.

 

It has also moved into consumer banking, opening an online-only retail bank
called Marcus, and invested in financial technology firms such as UK-based
online wealth manager Nutmeg and South Africa’s Jumo, which helps
individuals and small businesses access credit and savings products via
mobile devices.

 

 

 

Platinum firms gear up for tough S.Africa wage talks

JOHANNESBURG/LONDON (Reuters) - The world’s top platinum miners are bracing
for a fresh round of negotiations with South African workers as a rise in
producer profits is likely to provoke higher wage demands from labour unions
including the militant AMCU.

 

Higher prices for palladium and rhodium and a weaker rand currency have
boosted profits at miners such as Anglo American Platinum (Amplats),
Sibanye-Stillwater, Impala Platinum and Lonmin after several years of
losses.

 

This could embolden the Association of Mineworkers and Construction Union
(AMCU), which last month ended a five-month strike at Sibanye’s gold
operations, to demand increases that outpace inflation. Talks are expected
to begin in June.

 

“We expect another tough round of negotiations,” Amplats spokeswoman Jana
Marais said. “Our employees’ disposable income has been under increasing
pressure.”

 

A five-month strike in 2014 by thousands of AMCU members at the Rustenburg
operations of Amplats, Impala and Lonmin forced the companies to restructure
and cut jobs.

 

But the strike, which cost the industry billions, failed to push platinum
prices higher due to a supply glut that is expected to persist this year.

 

AMCU, which could lose accreditation as a union for allegedly breaking
labour laws, said during a press conference last month it had complied with
rules about how unions should operate and was preparing for the platinum
wage talks.

 

The AMCU is one of the largest unions in South Africa’s mining sector and
the majority worker’s body in platinum.

 

“AMCU will continue its campaign of social justice and economic emancipation
of the working class,” AMCU President Joseph Mathunjwa said at the April
conference.

 

Firms argue that years of above inflation wage rises have eroded profit
margins.

 

“Workers cannot be screaming for minimal profits for their pockets
(otherwise) they will have no jobs in five years,” Lonmin chief executive
Ben Magara told Reuters in London.

 

AMCU, Solidarity and National Union of Mineworkers could not immediately
comment.

 

Platinum firms paid around 48 billion rand ($3.4 billion) in wages to
employees in 2018, according to data from the Minerals Council, but are
facing headwinds from a carbon tax and higher electricity prices and power
supply disruptions.

 

The sector, the largest mining employer, has seen a 16 percent decline in
the number of workers to 167,835 in 2018 from a peak of 199,948 a decade
ago.

 

Layoffs in the mining sector are a sensitive issue in a country where
unemployment is running at 27%, but they are common in the industry, where
some mines are unprofitable.

 

The rise in profits is due to record high palladium prices and firmer
rhodium prices. But the industry in South Africa produces less palladium
than platinum.

 

Platinum prices around $850 an ounce are down nearly two-thirds since 2008,
partly due to the Volkswagen emissions scandal in 2015.

 

“A strike is a big risk for PGM producers, especially those who have a
majority AMCU membership. That remains a challenge, despite the higher
basket price,” said Nedbank equity analyst Arnold Van Graan.

 

($1 = 14.2195 rand)

 

 

 

South Africa's retail sales up 0.2% year/year in March

JOHANNESBURG (Reuters) - South African retail sales rose 0.2% year-on-year
in March after rising by a revised 1.4% in February, Statistics South Africa
said on Wednesday.

 

On a month-on-month basis, sales fell 0.7%. They rose 1.0% in the three
months to March compared with the same period last year, the statistics body
said.

 

 

 

Jumia's Nigeria chief stands by sales figures queried by short-seller Citron

AMSTERDAM (Reuters) - African ecommerce company Jumia is trying to encourage
more prepayment to discourage returns or cancellations, the head of its
Nigerian business said after a report last week by Citron Research
questioned some of Jumia’s sales figures.

 

Jumia became the first African tech stock to list on Wall Street on April
12. Its shares initially soared, but fell sharply on Friday after the
publication of the report by Citron Research, run by short-seller Andrew
Left.

 

“We stand by what we disclosed... the way GMV (gross merchandise value) is
calculated in the industry is gross of cancellations and returns,” Juliet
Anammah, chief executive of Jumia Nigeria, told Reuters by telephone after
cancelling a trip to address a retail event in Amsterdam at short notice.

 

She said many customers in Nigeria, Jumia’s biggest market, still only pay
by cash when they receive their orders, but Jumia was trying to move
customers to its Jumia Pay solution to pay in advance when they check out
online.

 

Loss-making Jumia was making progress towards reaching its goal of breakeven
by the end of 2022, Anammah added.

 

It plans to make its marketing spending more efficient, charge merchants for
storing their goods in its warehouses, boost sales of advertising on is site
and charge sellers to create content, such as images of their products, she
said.

 

“We are going to monetise value-added services such as Jumia Express and add
on more advertising. We have just started a whole lot of opportunities,” she
said.

 

Jumia shares were trading 3.5 percent higher at $27.52 by 1658 GMT after two
brokerages raised their ratings.

 

 

 

South Africa's Spar in final stages of talks to buy controlling stake in
Polish retail chain

JOHANNESBURG (Reuters) - SPAR Group Ltd is in final stages of talks to buy a
controlling stake in Polish retail chain Piotr i Pawel group, the South
African retailer said on Wednesday, as it seeks to boost its European
operations.

 

“The SPAR group has been awarded the SPAR Licence to operate the brand in
Poland,” it said in its interim result statement.

 

SPAR, a grocery chain which also sells building materials and medicines in
southern Africa, also has operations in Ireland and Switzerland.

 

 

 

Trump declares national emergency over IT threats

President Donald Trump has declared a national emergency to protect US
computer networks from "foreign adversaries".

 

He signed an executive order which effectively bars US companies from using
foreign telecoms believed to pose national security risks.

 

The order does not name any company, but is believed to target Huawei.

 

The Chinese tech giant said restricting its business in the US would only
hurt American consumers and companies.

 

Several countries, led by the US, have raised concerns in recent months that
Huawei products could be used by China for surveillance

 

The US cannot crush us, says Huawei boss

Huawei: The world's most controversial company?

The next US-China battleground

The US has been pressuring allies to shun Huawei in their next generation 5G
networks.

 

In a separate move, the US commerce department added Huawei to its "entity
list" - a move that bans the company from acquiring technology from US firms
without government approval.

 

Correspondents say the moves are likely to worsen tensions between the US
and China, which had already escalated this week with tariff hikes in a
trade war.

 

Huawei has been at the epicentre of the US-China power struggle that has
dominated global politics over the past year.

 

What does the order say?

According to a White House statement, Mr Trump's order aims to "protect
America from foreign adversaries who are actively and increasingly creating
and exploiting vulnerabilities in information and communications technology
infrastructure and services".

 

It gives the secretary of commerce the power to "prohibit transactions
posing an unacceptable risk to the national security", the statement adds.

 

The move was instantly welcomed by Federal Communications Commission
Chairman Ajit Pai, who said in a statement it was "a significant step toward
securing America's networks".

 

The US had already restricted federal agencies from using Huawei products
and has encouraged allies to shun them, while Australia and New Zealand have
both blocked the use of Huawei gear in next-generation 5G mobile networks.

 

How has Huawei responded?

Huawei has said its work does not pose any threats and says it is
independent from the Chinese government.

 

In a statement issued on Thursday the company said: "Restricting Huawei from
doing business in the US will not make the US more secure or stronger.

 

"Instead, this will only serve to limit the US to inferior yet more
expensive alternatives, leaving the US lagging behind in 5G deployment, and
eventually harming the interests of US companies and consumers."

 

The statement also said "unreasonable restrictions" on Huawei raised "other
serious legal issues". Huawei has vehemently denied the allegations.

 

On Tuesday, its chairman Liang Hua said it was "willing to sign no-spy
agreements with governments" during a meeting in London, as concerns over
the security of its products used in next-generation 5G mobile networks
continued to grow.

 

What about the trade war?

Mr Trump's latest move is also likely to inflame relations with China, which
are already under strain because of the trade war.

 

The US president has complained about China's trading practices since before
he took office in 2016.

 

The US more than doubled tariffs on $200bn (£154.9bn) of Chinese goods on
Friday and China retaliated with its own tariff hikes on US products.

 

This escalated the situation which only recently seemed to be nearing a
conclusion.

 

However, stock markets steadied on Wednesday as hopes rose that the two
countries might resume talks next month.

 

Mr Trump said he expected to meet his Chinese counterpart, Xi Jinping, at
the G20 summit in Japan.

 

China's foreign ministry spokesman Geng Shuang also said that the two men
"maintain contact through various means".

 

 

 

 

Pilots 'raised Boeing safety fears' months before Ethiopia crash

American Airlines pilots confronted Boeing about potential safety issues in
its 737 Max planes in a meeting last November, US media are reporting.

 

They urged swift action after the first deadly 737 Max crash off Indonesia
in October, according to audio obtained by CBS and the New York Times.

 

Boeing reportedly resisted their calls but promised a software fix.

 

But this had not been rolled out when an Ethiopian Airlines' 737 Max crashed
four months later, killing 157 people.

 

Currently 737 Max planes are grounded worldwide amid concerns that an
anti-stall system may have contributed to both crashes.

 

Boeing is in the process of updating the system, known as MCAS, but denies
it was solely to blame for the disasters.

 

In a closed door meeting with Boeing executives last November, which was
secretly recorded, American Airlines' pilots can be heard expressing
concerns about the safety of MCAS.

 

Boeing vice-president Mike Sinnett told the pilots: "No one has yet to
conclude that the sole cause of this was this function on the airplane."

 

Later in the meeting, he added: "The worst thing that can ever happen is a
tragedy like this, and the even worse thing would be another one."

 

The pilots also complained they had not been told about MCAS, which was new
to the 737 Max, until after the Lion Air crash off Indonesia, which killed
189.

 

"These guys didn't even know the damn system was on the airplane, nor did
anybody else," said Mike Michaelis, head of safety for the pilots' union.

 

Boeing declined to comment on the November meeting, saying: "We are focused
on working with pilots, airlines and global regulators to certify the
updates on the Max and provide additional training and education to safely
return the planes to flight."

 

American Airlines said it was "confident that the impending software
updates, along with the new training elements Boeing is developing for the
Max, will lead to recertification of the aircraft soon."

 

Following the Lion Air crash, Boeing issued additional instructions to
pilots in case they faced a malfunction of the MCAS.

 

But in a letter obtained by the AFP news agency, Mr Michaelis said the
instructions weren't sufficient to help pilots in the event of malfunction.

 

Mr Michaelis also reportedly asked Boeing executives at the meeting to
consider a software upgrade for the 737 MAX 8 - which probably would have
required the planes be grounded for some time.

 

The executives said they didn't want to rush out a fix, and said they
expected pilots to be able to handle problems, according to the New York
Times.

 

Investigators believe in both deadly crashes a faulty sensor triggered the
plane's MCAS anti-stall system, which repeatedly pushed the nose of the
plane down.

 

Earlier this month Boeing admitted that it knew about another problem with
its 737 Max jets a year before the 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.

 

The feature - an Angle of Attack (AOA) Disagree alert - was designed to let
pilots know when two different sensors were reporting conflicting data.

 

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

 

Boeing has been working on a software fix for its flight system and is
hoping for quick approval from regulators.

 

But it is unclear if the planes will be back in the air before the end of
the critical summer travel season.--BBC

 

 

Trump-branded properties 'underperforming'

US President Donald Trump's Miami golf resort and Manhattan skyscraper,
jewels in the crown of his property empire, are in decline, say US media.

 

The Trump National Doral Miami has reported a steep drop in profit since
2015, according to the Washington Post.

 

Since 2015 net operating income fell by 69%, the paper reported, citing
Trump Organization documents.

 

And owners of units at Trump Tower in New York have been selling at heavy
losses, Bloomberg reports.

 

The 643-room Doral resort - which is Mr Trump's highest-earning hotel - is
"severely underperforming" other resorts in south Florida, a Trump
Organization tax consultant told a Miami-Dade County official last year,
according to the Post.

 

"There is some negative connotation that is associated with the brand," said
the consultant while seeking to lower the property's tax rate.

 

Kimberly Benza, a Trump Organization representative, told BBC News: "The
article is absolute garbage.

 

"2018 is one of the best years in the history of the property."

 

President Trump bragged in 2016 of claiming depreciation on his commercial
real estate as an old property developers' tactic to lower his taxes.

 

Bloomberg News reports that apartment owners in Trump Tower, Manhattan, were
selling for "brutal" losses.

 

Some flats at the skyscraper - where Mr Trump ran his 2016 presidential
campaign and filmed TV show The Apprentice - have been sold at losses as
high as 20%.

 

In Manhattan, only 0.23% of homes over the last two years have sold at a
loss, according to data provider PropertyShark.

 

The tower's occupancy rate is double the average vacancy of most Manhattan
properties, according to Bloomberg.

 

By contrast, the Trump Organization this year reported a 26% increase in
profit from foreign governments.

 

The company said it planned to donate that money to the US Department of
Treasury.

 

The Trump International Hotel in Washington seems to be prospering as
diplomats and lobbyists reportedly splurge there.

 

During the hotel's first full year of operation in 2017, revenues topped
$40m (£31m).--BBC

 

 

 

Huawei says willing to sign 'no-spy' agreements

Huawei is "willing to sign no-spy agreements with governments" including the
UK, its chairman Liang Hua said.

 

It follows concerns from some countries that China could use products made
by the telecoms firm for surveillance.

 

The Chinese company has denied that its work poses any risks of espionage or
sabotage.

 

Huawei has also said it is independent from the Chinese government, but some
countries have blocked it from their 5G networks on national security
grounds.

 

A recent report suggested the UK could allow Huawei's telecoms equipment to
be part of the country's 5G networks, with some limitations.

 

"We are willing to sign no-spy agreements with governments, including the UK
government, to commit ourselves to making our equipment meet the no-spy,
no-backdoors standard," Liang Hua said via an interpreter at a business
conference in London on Tuesday.

 

The US cannot crush us, says Huawei boss

Huawei: The world's most controversial company?

The next US-China battleground

Huawei is the world's largest maker of telecoms equipment. It faces a
growing backlash from Western countries on concerns over the security of its
products used in next-generation 5G mobile networks.

 

Australia and New Zealand have both blocked the use of Huawei gear in their
5G mobile networks.

 

The US has restricted federal agencies from using Huawei products and has
put pressure on allies to shun them.

 

On Wednesday, Reuters reported the US was likely to tighten restrictions on
Huawei with President Donald Trump expected to sign an executive order this
week barring US companies from using telecoms equipment made by firms that
pose a national security risk.

 

The move would come at a time when US-China tensions are already on the
rise.

 

The US more than doubled tariffs on $200bn (£154.9bn) of Chinese goods on
Friday and China retaliated with its own tariff hikes on US products.

 

This escalated a damaging trade war which only recently seemed to be nearing
a conclusion.--BBC

 

 

 

Asda could be listed on the stock market after blocked merger

Asda could be listed on the stock market after its merger with supermarket
rival Sainsbury's was blocked by the competition authorities.

 

Judith McKenna, chief executive of Asda's owner Walmart, has told staff such
a listing is being considered.

 

But, she told managers at an event in Leeds - where Asda is based - any
listing could "take years".

 

It comes after the Competition and Markets Authority blocked its merger with
rival Sainsbury's.

 

The CMA was concerned the tie-up would raise prices for consumers, raise
prices at the supermarkets' petrol stations and lead to longer checkout
queues.

 

It has left the giant US retailer Walmart looking at options for the
supermarket chain it bought 20 years ago.

 

"While we are not rushing into anything, I want you to know that we are
seriously considering a path to an IPO - a public listing - to strengthen
your long-term success," Ms McKenna said.

 

Asda overtakes Sainsbury's to become second largest supermarket

Asda sales growth slows amid 'challenging' trade

Walmart would have kept a 42% stake in the enlarged Sainbury's-Asda business
if the £15bn tie-up had gone ahead.

 

The remarks by Ms McKenna are the first time that Walmart has spoken about
the future of its UK operations since the CMA blocked the deal.

 

Managers at the meeting were also told to prepare staff for the need for
"ongoing change" amid proposals to make changes to contracts that increase
the basic pay of staff and require more flexible working. There have been
warnings that this could leave staff worse off.

 

Asda is traditionally a value supermarket but had come under pressure from
discounters Aldi and Lidl, which have rapidly expanded their market share in
recent years. T

 

Walmart, often described as the world's largest retailer, has already listed
its Mexico operations and has been buying smaller companies, such as online
shopping Jet.com, as well as brands such as Bonobos and Bare Necessities, to
expand into new areas.

 

The GMB union said it had called for an urgent meeting with Walmart bosses
to discuss the flotation plans.

 

GMB national officer Gary Carter said there was "uproar among the workforce"
over plans to change Asda employees' contracts.

 

He called on the supermarket to address that "debacle" before any stock
market listing took place.

 

Price cuts loom

Ms McKenna told the 1,200 managers at the meeting: "Walmart does not have a
one-size-fits-all approach to operating its international markets, but a
consistent focus on strong local businesses powered by Walmart."

 

Even before the CMA formally blocked the deal, there had been reports that
private equity house KKR could consider an offer for Asda and install former
Asda chief executive Tony De Nunzio to run the operation.

 

The current Asda chief executive, Roger Burnley, also spoke to the managers
at the meeting, which took place on Tuesday, and told them that there would
be no change in strategy.

 

Asda, which calls its staff "colleagues", intends to make £80m of price cuts
during the rest of this year and trial new technology.

 

A "scan and go" initiative was launched in 25 stores last week and more
"click and collect" towers will be installed in stores.--BBC

 

 

 

 

 

 


 

 


 

INVESTORS DIARY 2019

 


Company

Event

Venue

Date & Time

 


NMB

AGM

Head Office, 4th Floor, Unity Court

23 May 2019 , 3pm

 


 

Africa Day

 

25 May 2019

 


Dairibord

AGM

Steward Room, Meikles

31 May 2019, 12pm

 


Lafarge

AGM

Manresa Club, Arcturus

05 June 2019 , 12pm

 


CBZ

AGM

Stewart Room, Meikles

05 June 2019 , 3pm

 


 

 

 

 

 


 

 

 

 


 

 

 

 


 <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
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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
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
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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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