Major International Business Headlines Brief::: 20 May 2019

Mon May 20 05:15:15 CAT 2019

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Major International Business Headlines Brief::: 20 May 2019

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*  Saudi Arabia says deposits $250 million into Sudan's central bank -statement

*  Nigeria hopes oil supply cut deal would be extended -minister

*  S.Africa power utility Eskom raises $361 million through loan drawdowns

*  Zambia's president insists on tax changes opposed by mining firms

*  MTN Nigeria signs 200 bln naira loan after Lagos listing

*  Palladium boom gives South African miners only temporary reprieve

*  Total CEO says planned buy of Anadarko's Africa assets 'perfectly fitting'

*  MTN Nigeria quoted up 10% in pre-market bids after debut $6.5 bln listing

*  IMF: Mozambique debt talks with VTB almost finalized, cyclone hits growth

*  Google restricts Huawei's use of Android

*  Warning over 'new eurozone crisis'

*  US lifts steel and aluminium tariffs on Canada

*  US supercomputer maker Cray Inc bought in £1bn deal

*  Amazon invests in Deliveroo food courier

*  Pound slides to four-month low after Brexit talks end

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Saudi Arabia says deposits $250 million into Sudan's central bank -statement

DUBAI (Reuters) - Saudi Arabia said on Sunday it deposited $250 million with the Sudanese central bank, according to a statement from the kingdom’s ministry of finance.

Saudi Arabia and the United Arab Emirates pledged to send $3 billion worth of aid to Sudan, after mass protests led to the ouster of president Omar al-Bashir last month.

The move will strengthen Sudan’s “financial position, alleviate pressure on the Sudanese pound and achieve more stability in the exchange rate,’ the statement said.

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Nigeria hopes oil supply cut deal would be extended -minister

JEDDAH, Saudi Arabia (Reuters) - Nigeria’s oil minister said on Sunday he hoped the supply cut agreement between OPEC and non-OPEC members would be extended until year-end.

“I’m hoping so,” Emmanuel Ibe Kachikwu said when asked if the deal needs to be extended. “I’m not so much worried about wars. I don’t think that will happen... I don’t think anybody’s going to push to the point of war,” Kachikwu said when asked about a risk of war in the region.

S.Africa power utility Eskom raises $361 million through loan drawdowns

JOHANNESBURG (Reuters) - South Africa’s power utility Eskom said on Friday it had raised 5.2 billion rand ($361 million) through drawdowns against a portion of committed loans, 4 billion rand of which was received from China Development Bank (CDB), and the issuance of domestic bonds.

The struggling utility supplies more than 90 percent of the electricity in Africa’s most industrialised economy but has a 420 billion rand debt which it struggles to service, poses a threat to the country’s credit rating.

Eskom said it had secured 52% of its plan to borrow 46 billion rand during the 2019/20 financial year.

Eskom had expected to draw down 7 billion rand ($481 million) from a $2.5 billion CDB loan facility by late March, but South Africa’s finance ministry said last month that the drawdown had been delayed, meaning a planned bailout had to be brought forward.

The company said its liquidity stood at 7.7 billion rand at April 30, 2019.

President Cyril Ramaphosa has prioritised fixing the ailing utility in his new five-year term with government having pledged a 23 billion rand ($1.6 billion) a year bailout for Eskom over the next three years.

($1 = 14.4150 rand)

Zambia's president insists on tax changes opposed by mining firms

LUSAKA (Reuters) - Zambia’s President Edgar Lungu said on Friday that he will go ahead with a new non-refundable sales tax in place of Value Added Tax (VAT), despite criticism from mining companies.

Africa’s second-biggest copper producer is introducing the tax change as part of a plan to keep a greater share of mineral resource profits for the country and tackle its debt despite criticism that it is deterring new investment.

Lungu said companies that don’t like the tax regime should leave the country. He said companies such as Vedanta Resources’ Konkola Copper Mines (KCM) and Glencore’s Mopani Copper Mines (MCM) were laying off workers and blaming the tax changes.

Mopani plans to close two shafts at its Nkana mine in Kitwe, the company said last week, a move that union sources said could affect more than 2,000 workers.

“It is a sovereign state and when we decide how to manage our tax regime, we decide on our own,” Lungu told supporters at Simon Mwansa Kapwepwe international airport in Ndola, about 330 km north of Lusaka.

The new sales tax was meant to have been introduced on April 1, but has been postponed until July to allow more consultation.

Lungu said the government was consulting its lawyers to ensure that everything is done within the law in the event that Zambia decides to bring in new investors.

“I know people who are willing to come and invest in the mines. Immediately we kick out these people, others will come and re-open the mines,” Lungu said.

Other mining companies operating in Zambia include Canada’s First Quantum Minerals and Barrick Gold Corp.

Finance Minister Margaret Mwanakatwe said last week the government was accruing about 1.8 billion kwacha ($140 million) in VAT refunds every month.

The International Monetary Fund has repeatedly warned Zambia is struggling with high debts and shrinking foreign currency reserves.

MTN Nigeria signs 200 bln naira loan after Lagos listing

ABUJA (Reuters) - MTN Nigeria said on Friday it has signed a 200 billion naira ($653 million) loan with seven local banks, a day after it floated its shares on the Lagos stock market.

The seven-year loan deal coordinated by Citibank was signed with a consortium of Access Bank, Guaranty Trust Bank, Zenith Bank, Fidelity Bank, FCMB, United Bank for Africa and First Bank.

MTN Nigeria, majority owned by South Africa’s MTN Group, floated its shares in a $6.5 billion listing on Thursday turning into the second-largest company on the exchange after Dangote Cement.

The Lagos-listed shares gained a further 10% on Friday, its second day of trading. The shares, which listed at 90 naira, closed 10% higher at 99 naira on Thursday.

“Am delighted that, so soon after our successful listing on the Nigerian Stock Exchange, we are able to complement it with such an important addition to our portfolio of debt,” Fredi Moolman, MTN Nigeria’s Chief Executive, said.

The MTN unit has 52.3 million users in Nigeria in 2017 and accounts for a third of the Johannesburg-based parent’s profit. However, it has had fraught relations with the Nigerian authorities, including rows over SIM cards and tax payments.

It listing follows MTN Group’s agreement with Nigerian regulators to settle most of those disputes.

MTN Nigeria on Friday said the new debt is part of a programme to raise debt in Nigeria, aimed at mitigating exchange rate volatility. The telecoms firm said it raised a loan of 200 billion naira in 2018.

It plans to use the funds to finance capital expenditure and working capital, MTN said.

($1 = 306.45 naira)

Palladium boom gives South African miners only temporary reprieve

LONDON (Reuters) - A surge in palladium prices has thrown struggling South African mining companies a lifeline. But it may not be enough.

Besides patchy power supplies and high labour costs, South African miners are saddled with ore that typically produces twice as much platinum as palladium - just at a time a global platinum surplus is weighing on prices.

Russia’s Norilsk Nickel (Nornickel), the world’s biggest palladium producer, meanwhile, has emerged as the winner from the reversal of platinum’s long-standing premium over palladium, because the ore it mines is far richer in the latter.

Unlike South African mines, Nornickel’s ore produces four times as much palladium as platinum and the company has lower extraction costs, leaving it in prime position to benefit from palladium’s bull run and reinforce its dominance.

Nornickel said in November it would spend $10.5 billion to $11.5 billion in the coming years to boost its metals output. It plans to raise production of platinum group metals (PGMs) from its Arctic mines by 25% from 2017 levels by 2025 - an increase of about 860,000 ounces.

Platinum and palladium are both mainly used in autocatalysts to reduce car exhaust pollution. But while palladium goes into gasoline cars, platinum is mainly used in diesel vehicles and it has fallen out of favour since the emissions cheating scandal.

“We see the current palladium premium over platinum as sustainable in the mid-term as it is justified by higher fair value-in-use in the automotive industry,” said a Nornickel spokeswoman.

Palladium hit a record $1,620 an ounce in March, a surge of nearly 100 percent since August. It has slipped back to around $1,335, but is still more expensive than gold.

Platinum, meanwhile, sank to a 10-year low of $751 an ounce in August, a far cry from a peak of $2,290 in 2008. Platinum prices are now around $850, partly supported by bets from some investors who believe the price has sunk too low.

“Norilsk is benefiting handsomely from the higher palladium price and most of South African mining can’t keep up,” said Nedbank analyst Arnold Van Graan.

‘DEEP TROUBLE’

Spending more to crank up production and take advantage of record palladium prices just leaves South African miners with even more platinum when the market is expected to have a surplus for the fourth year in a row. For Nornickel, investing to expand makes more sense given the market dynamics.

“Palladium is now the largest revenue source for Nornickel, followed by nickel and copper and therefore investors like the purer exposure to key industrial metals,” said Roger Jones, a fund manager and head of equities at London & Capital.

According to consultants Metals Focus, higher car industry demand should leave the palladium market with a deficit of 574,000 ounces in 2019, the eighth year of shortfalls in a row. Platinum is expected to have a surplus of 630,000 ounces.

Overall, the basket price of PGMs in South Africa has risen about 30% over the past year thanks to palladium, but miners are not generating enough returns given the composition of their ore to boost production significantly.

“It’s a tremendous difference from a year ago but we are not out of the woods yet as a sector,” Northam Platinum CEO Paul Dunne said, adding that the PGM basket price would need to rise another 20% for most South African mines to be sustainable.

In 2018, margins for South African platinum miners were negative on average, the industry made an aggregate loss and capital expenditure was less than a billion dollars, said industry group Minerals Council South Africa.

Rising costs, including higher wages and electricity bills, are also eating away at margins.

“The reality is the industry is still in deep, deep trouble,” said James Wellsted, spokesman for Sibanye-Stillwater.

“They might be making a little bit of money now but it’s still not high enough to justify investment in projects that will extend the lives of the operation,” he said.

Sibanye has fared better than its rivals partly thanks to its higher exposure to palladium after its acquisition of U.S. mining company Stillwater in 2017. The addition of Stillwater means it now produces an even split of platinum and palladium.

Higher profits from its PGM operations offset a loss from its gold mines, which were hit by five months of strikes, to give it an adjusted core profit (EBITDA) of $12.5 million in the first three months of 2019.

OUT ON A LIMB

Lonmin, the world’s fifth largest platinum miner, is being bought by Sibanye in an all-share deal to help both weather the markets after a series of strikes in South Africa and low prices battered Lonmin’s balance sheet.

It made an annual pre-tax profit in its 2018 financial year after four years of losses but is sticking to its plan to cut high-cost production and focus on its newer “Generation 2” operations.

“Despite the progress made, this does not provide a long-term solution to the capital structure challenges faced by Lonmin, as it is still inadequate to invest in the new projects necessary to avoid shaft closures and job losses and maintain our production profile,” Chief Executive Ben Magara said.

Anglo American Platinum (Amplats), the top South African palladium producer, resumed dividends in 2017 for the first time since 2011 and raised its dividend payout-ratio this year, but it too is shying away from major spending.

Instead, it is focusing on incremental increases from its palladium-rich Mogalakwena mine. Amplats is studying how to lift PGM output from Mogalakwena by about 500,000 ounces in four to five years from 1.2 million ounces last year.

Mogalakwena sits in the Northern limb of the South African platinum belt where the ore contains relatively more palladium.

But most mines owned by the major miners sit on the Western limb. They contain more platinum, are older and much deeper, making them more expensive and labour intensive to mine.

Impala Platinum, which has seen its profits rise, is closing shafts and cutting thousands of jobs at its Rustenburg mine to try to return it to profitability.

Impala is reviewing an option to raise its stake in a palladium deposit owned by Platinum Group Metals but plans no major expansion itself. It will be cutting platinum output by 230,000 ounces by the end of next year.

“The fact is, we get the metal in the ratio that it was put there and its very difficult mostly in South Africa to change that mix,” said Amplats Chief Executive Chris Griffith.

Total CEO says planned buy of Anadarko's Africa assets 'perfectly fitting'

WASHINGTON (Reuters) - French energy giant Total SA’s planned acquisition of U.S. firm Anadarko’s African assets is “perfectly fitting” with the company’s overall strategy and helps play to its strengths, Chief Executive Patrick Pouyanne said on Thursday.

Total agreed to buy all of Anadarko’s oil-and-gas-producing assets outside the United States, including its biggest future expense, a multibillion-dollar liquefied natural gas project in Mozambique, for $8.8 billion.

The deal is contingent on the wider, $38 billion proposed takeover of Anadarko Petroleum Corp by Occidental Petroleum Corp, which last month outmaneuvered rival Chevron, the No. 2 U.S. oil producer, which had also bid for Anadarko.

Speaking at an event in Washington, Pouyanne said the oil major has had its eyes on Anadarko’s Africa assets, which stretch from Algeria to South Africa, for more than a year.

“What we tell to investors is we play to our strengths. What are the strengths of Total? It is the Middle East, Africa, North Sea, Deep Water. ... It is just fitting exactly and perfectly with what we announced,” Pouyanne said.

Pouyanne’s move to buy Anadarko’s assets, the French firm’s biggest acquisition since taking over Elf almost two decades ago, will bolster his effort to refocus Total on operations in Africa, the North Sea, deep offshore and liquefied natural gas.

“In fact...we have been looking at these assets more than a a year. We have had some discussions before with Anadarko,” Pouyanne said. “It was not a lot of creativity to fix that these assets are not very well fitting for upstream and that there was a potential match between Oxy and Total.”

“So it’s just a matter of sending an email to my colleague, then I was ringing her,” Pouyanne said, in apparent reference to Occidental CEO Vicki Hollub, who put together a strategy that beat Chevron, which is nearly five times larger than Occidental.

Total has built up a strong balance sheet under Pouyanne since the 2014 oil price crash, giving him the firepower to swoop on Anadarko’s assets. The company has made acquisitions worth almost $20 billion in the past five years, under Pouyanne’s leadership.

It took Pouyanne and a small group of advisers just days to line up Total’s bid for Anadarko’s Africa assets and by keeping those in the know to a minimum, the French CEO was able to stay flexible in negotiations, take a swift decision and ensure there were no leaks before the announcement.

MTN Nigeria quoted up 10% in pre-market bids after debut $6.5 bln listing

ABUJA (Reuters) - MTN Nigeria shares rose another 10% to 108.90 naira in pre-market bids on Friday after its debut $6.5 billion stock market listing on the Lagos bourse.

Nigeria’s biggest telecoms firm, owned by South Africa’s MTN Group, listed in Lagos on Thursday in a flotation that made it the second-largest company on the exchange by market value after Dangote Cement.

A total of 150,000 bid orders had been placed for the stock by 0847 GMT. The shares, which listed at 90 naira, closed 10% higher at 99 naira on Thursday.

IMF: Mozambique debt talks with VTB almost finalized, cyclone hits growth

LONDON (Reuters) - Mozambique’s restructuring discussions with Russian lender VTB over a loan to the state-owned Mozambique Asset Management (MAM) are in the final stretch, the International Monetary Fund (IMF) said in its latest country report.

The fund also said the devastation from Cyclone Idai which killed more than 1,000 people across Mozambique, Zimbabwe and Malawi in March, had severely hit agricultural production and disrupted transport, slashing growth projections by half for this year.

Mozambique has been battling to recover from a debt crisis after admitting in 2016 to $1.4 billion of previously undisclosed lending, prompting the IMF to cut off support and triggering a currency collapse and debt default. Much of the funds were supposed to be spent on a tuna fishing fleet. VTB had been the lead arranger for a $535 million loan to MAM.

“The authorities are in good-faith discussions with private creditors to restructure Mozambique’s Eurobond and previously hidden loans,” the IMF wrote in the report. “Restructuring discussions with VTB on the MAM loan are almost finalized.”

VTB declined to comment.

Meanwhile Swiss lender Credit Suisse had arranged another $622 million loan for maritime security projects to state-firm ProIndicus.

“Mozambique’s Attorney-General has filed a lawsuit in the UK to nullify the criminally-obtained government guarantee to the loan contracted by ProIndicus, a state-owned enterprise, with Credit Suisse,” the IMF report stated.

Mozambique’s outstanding Eurobond is also due for restructuring and the Finance Ministry announced in November that it had reached an agreement in principle, hoping to finalize this early this year, though little progress seems to have been made since.

CYCLONE IDAI

Assessing the fallout from March’s cyclone, the IMF said damage to infrastructure had severely impacted productive capacity in key economic sectors in the central region.

The IMF predicted real GDP growth would slow to 1.8-2.8% in 2019 from a pre-cyclone projection of 3.8% due to losses to agricultural production and disruption to transport, communications and services.

Meanwhile food shortages in Beira and surrounding regions are expected to raise price pressures, with inflation forecast to accelerate to 8.5% from 5.5%.

Emergency assistance and reconstruction efforts will also ramp up pressure on a tight budget, the IMF said. It expected the fiscal primary deficit after grants to rise to 2.5% of GDP in 2019, one percentage point of GDP higher than projected.

In a letter from Mozambique’s Finance Ministry on April 10 to the IMF, attached to the lender’s report, the government said most homes, hospitals and schools in Beira, one of the country’s major cities, had suffered large-scale destruction.

“The port of Beira, an important trade hub not only for Mozambique but also for Malawi and Zimbabwe, is not operational,” the letter said.

The port operator could not be reached for comment.

Google restricts Huawei's use of Android

Google has cut phone maker Huawei off from some updates to the Android operating system, dealing a blow to the Chinese firm.

New Huawei smartphones will also lose access to popular Google apps.

The move comes after the Trump administration added Huawei to a list of companies that American firms cannot trade with unless they have a licence.

In a statement, Google said it was "complying with the order and reviewing the implications".

Huawei declined to comment.

The move by Google, first reported by Reuters, means Huawei loses Google's security updates and technical support, and any new devices would no longer have apps such as YouTube and Maps.

Huawei can still use the version of the Android operating system available through an open source licence.

Ben Wood, from the CCS Insight consultancy, said the move by Google would have "big implications for Huawei's consumer business".

Huawei 'blacklisted'

Last Wednesday the Trump administration added Huawei to its "entity list", a move that bans the company from acquiring technology from US firms without government approval.

Huawei faces a growing backlash from Western countries, led by the US, over possible risks posed by using its products in next-generation 5G mobile networks.

Several countries have raised concerns that Huawei gear could be used by China for surveillance, allegations the company has vehemently denied.

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

Still, some countries have blocked telecoms companies from using Huawei products in 5G mobile networks.

So far the UK has held back from any formal ban.

"Huawei has been working hard on developing its own App Gallery and other software assets in a similar manner to its work on chipset solutions. There is little doubt these efforts are part of its desire to control its own destiny," said Mr Wood.

In the short term, this could be very damaging for Huawei in the West.

Smartphone shoppers would not want an Android phone that lacked access to Google's Play Store, its virtual assistant or security updates, assuming these are among the services that would be pulled.

Longer term, though, this might give smartphone vendors in general a reason to seriously consider the need for a viable alternative to Google's operating system, particularly at a time the search giant is trying to push its own Pixel brand at their expense.

As far as Huawei is concerned, it appears to have prepared for the eventuality of being cut off from American know-how.

Its smartphones are already powered by its own proprietary processors, and earlier this year its consumer devices chief told German newspaper Die Welt that "we have prepared our own operating systems - that's our plan B".

Even so, this move could knock its ambition to overtake Samsung and become the bestselling smartphone brand in 2020 seriously off course.--BBC

Warning over 'new eurozone crisis'

A senior adviser to the German government fears another European financial crisis could be brewing.

Dr Lars Feld, one of the German Council of Economic Experts, was one of the first last year to warn of a slowdown in Europe's largest economy.

The German government expects expansion of just 0.5% this year, down from 1.8% just a few months ago as manufacturing struggles with a number of challenges.

Now Dr Feld tells the BBC he is looking further afield, in particular to Italy.

The country is struggling to stay out of recession and grappling with higher government debt and a banking crisis - which Dr Feld thinks could leave it vulnerable.

'Potential contagion'

The spending and tax spending plans of the Italian government there means its deficit and debt are ballooning, and set to breach rules set by the European Commission, further undermining the country's financial credibility.

The eurosceptic government has over £2 trillion worth of debts. Concerns about those could put further pressure on the financial system.

Dr Feld told the BBC: "The banking system in Italy is not as safe as we might hope for. There is the potential for contagion, in particular, from the Italian banking system to other banking systems.

"And in the first place from the Italian government to the entire banking system."

He concludes that "this might look like a new euro crisis".

Seven Italian lenders have already required bailing out in the last three years.

Slower Chinese demand

Dr Feld also remains wary of risks to his own economy.

Tougher emissions standards hit the sales of an underprepared car industry in the second half of last year . Meanwhile, a drought caused severe disruption to the transport of goods on the Rhine.

Those impediments were temporary. But manufacturing - which accounts for about a fifth or Germany's annual income - continues to be weighed down by slower demand from China, and disruption caused by the US-China trade war.

Beyond those challenges, Germany faces a longer-term challenge - how to stay ahead of the pack in the face of intense global competition.

European elections

The government's trying to support industry.

But Professor Feld doesn't feel that effectively equips Germany for the digital age - and says there are other ways to make the country more competitive, such as cutting taxes.

His comments come as voters in 28 countries get ready to take part in the European elections.

The issues affecting Germany and Italy recently prompted the European Commission to reduce its forecast for growth across the EU to 1.4% this year - just a touch above what it expects for the UK.--BBC

US lifts steel and aluminium tariffs on Canada

The US has reached a deal with Canada to lift tariffs on steel and aluminium imports in a move that could lead to approval for a new North American trade deal.

In a joint statement, the US and Canada announced that a 25% tariff on steel imports, and of 10% on aluminium, will end in 48 hours.

It is widely expected the US and Mexico will make a similar announcement soon.

The US implemented the tariffs last year on grounds of "national security".

Under the agreement, there will be no quotas on how much steel or aluminium the three countries buy from overseas.

USMCA trade deal: Who gets what from 'new Nafta'?

A quick guide to the US-China trade war

US tariffs: Steel and aluminium levies slapped on key allies

However, the US and Canada will monitor imports and if a country is determined to be buying in too much, one of the other nations can request a consultation and potentially re-impose tariffs.

What does the agreement mean?

Getting rid of the tariffs is viewed as a key hurdle to approval for the US-Mexico-Canada Agreement (USMCA) trade deal which was signed in 2018. It replaced the North American Free Trade Agreement.

Providing that Washington and Mexico City also announce an agreement to lift levies on steel and aluminium, the US, Mexico and Canada will ask their respective governments to ratify USMCA.

Canada also announced that it would lift tariffs on US imports of steel and aluminium that it implemented last year in retaliation for the Trump administration's levies.

A win awaits for the 'tariff man'

Analysis by Michelle Fleury, New York business correspondent

The spotlight had been on rising trade tensions between the US and China.

So America's decision to lift tariffs on steel and aluminium coming from Canada and Mexico was a surprise bit of good news.

(L-R) Mexico's then President Enrique Pena Nieto, US President Donald Trump, Canada's Prime Minister Justin Trudeau sign the USMCA deal

As it holds the line with China, the US is now pushing forward with a trade deal much closer to home.

Remember the USMCA trade agreement - meant to replace NAFTA? No?

Hardly a surprise. It has been languishing in the background.

For almost a year now these tariffs had been an obstacle to ratification of the deal. Canada and Mexico had vowed not to move ahead as long as they were in place. And several members of Congress had also raised objections.

This now raises the odds of it crossing the finishing line, opening up a new era of trade expansion in North America.

For Mr Trump, who loves tariffs so much he called himself the 'tariff man', this would be a big win.

And who knows, trade peace in North America might even strengthen his hand in negotiations with China.

It also targeted US farm goods as well as items like tomato ketchup and household products.

Canada's Prime Minister Justin Trudeau said on Friday: "These tariffs were harming workers and consumers on both sides of the border. As we look at moving forward with the new NAFTA, it didn't make a lot of sense to continue to have tariffs on steel and aluminium between our countries."

What about other countries hit with US tariffs?

European Union steel and aluminium exports to the US are still subject to the tariffs, but there has been some good news for trade relations between the two - on Friday President Donald Trump delayed a decision on whether to impose levies on cars and car part imports.

The White House has put back the decision by six months to allow more time for trade talks with the European Union and Japan.

Tariffs of up to 25% on imported cars and car parts were under consideration.

A report by the Commerce Department claimed that imports of foreign-made cars and auto parts into the US were a threat to national security.

The report has not been published, but in Friday's announcement Mr Trump cited its findings which conclude that US carmakers are missing out on revenues to invest in research and development (R&D).

It said: "The lag in R&D expenditures by American-owned producers is weakening innovation and, accordingly, threatening to impair our national security."

The president said he agreed with the study's finding that imported cars and trucks were "weakening our internal economy".

How are US relations with major trading partners?

The deal with Canada, as well as the delay in higher tariffs on EU and Japanese cars and auto parts, come at a critical time for the US and China - the world's two biggest economies.

On Monday, Beijing implemented retaliatory tariffs on US imports after Mr Trump imposed levies on a further $200bn of Chinese goods, following a breakdown in trade talks between the two nations.

The US President characterised it as a "little squabble".

However, shortly afterwards, Mr Trump declared a "national emergency" to protect US computer networks from "foreign adversaries".

While the announcement did not name any individual companies, it was widely perceived to be directed at Huawei, the Chinese telecoms equipment maker, which has faced claims its products could be used by China for surveillance.

Huawei has vehemently denied the allegations.--BBC

US supercomputer maker Cray Inc bought in £1bn deal

A Cray supercomputer is used by the Met Office for weather forecasting.

Hewlett Packard Enterprise (HPE) has bought Cray Inc, maker of some of the fastest supercomputers in the world.

Cray Inc's machines are capable of processing trillions of calculations per second and have been used by the UK's Met Office and GCHQ.

Shares in Cray jumped by 18% after announcing the $1.3bn (£1bn) deal.

HPE chief executive Antonio Neri said: "Answers to some of society's most pressing challenges are buried in massive amounts of data."

He added: "Only by processing and analyzing this data will we be able to unlock the answers to critical challenges across medicine, climate change, space and more."

The company predicts that the market for data services and storage from areas such as artificial intelligence is expected to grow from $28bn last year to $35bn by 2021.

Seymour Cray, who helped originate the company in the 1950s, is widely recognised as designing the first commercially successful supercomputer.

Cray computers feature a number of times in the world's top 500 supercomputers, and are used by the likes of the Met Office to improve its weather forecasting and climate modelling.

HPE is paying $35 per share for Cray, which is based in Seattle and employs 1,300 people.--BBC

Amazon invests in Deliveroo food courier

Online giant Amazon has announced a big investment in food courier Deliveroo.

The exact figure was not given, but Amazon is the biggest investor in Deliveroo's latest round of fund raising, which in total raised $575m (£450m).

Deliveroo said it would use the money for international expansion, improving its service and to grow its delivery-only kitchens business.

Several existing US investors also contributed to the fund raising.

The amount of capital invested in Deliveroo since it was founded in 2013 now totals more than $1.5bn, and the firm is one of Europe's fastest growing technology companies.

Deliveroo founder and chief executive Will Shu said he was looking forward to working with "such a customer-obsessed organisation" like Amazon.

Amazon said it was attracted by Deliveroo's "innovative technology service".

The backing from Amazon gives Deliveroo a boost against rivals such as JustEat and Uber Eats.

The online retailer briefly had its own UK food delivery venture, Amazon Restaurants UK, which it started in 2016 but closed just two years later.

"They [Amazon] weren't able to compete within the market so they've gone for the buying option instead. They've got the money behind them to do that," Louise Dudley, fund manager at investment firm Hermes, told the BBC's Today programme.

"It [Deliveroo] is not just a food delivery company it's very much a tech company. They have this tech platform that is seen is very attractive. They are able to expand into new areas and think about how people's tastes are evolving and be able to predict what stores will be successful. That predictive growth is very attractive to Amazon".

Amazon had previously been reported to have made approaches to buy Deliveroo outright. Uber also reportedly had talks with Deliveroo over buying it.

It was already a fierce contest - now the battle to dominate the food delivery business in the UK just moved to a whole new level.

In a rare failure Amazon decided last year to pull its Restaurants food service out of a UK market where Deliveroo, Just Eat and Uber Eats were scrapping to be top dog. Now it's put its firepower behind Deliveroo, which was already confident that its technology platform gave it the edge.

The company will now use some of its extra cash to build more of its "super kitchens" expanding its offering beyond traditional restaurants and invest more in machine learning to speed up delivery times.

Whether the market for food deliveries is quite as big as all the firms believe - and whether it stretches far beyond London twenty-somethings - remains to be seen but they all seem prepared to spend big money to win the lion's share.

The question is why did Amazon not just buy the whole business? Perhaps the ecommerce giant wanted to sample a starter before swallowing the whole three course meal.

Deliveroo now operates in more than 100 towns and cities across the UK, but has a much smaller share of the market than rival Just Eat which dominates the food delivery sector.

Just Eat's shares fell 8% in early trading, but analysts at Liberum said that despite the extra funding, Deliveroo was unlikely to become a serious competitor.

"Just Eat's market leading position will be incredibly difficult to overcome, especially given its strength in smaller towns.

"In the UK, it has an estimated 3-4 times greater share than Uber Eats and Deliveroo combined and, crucially, 60%+ of its customers are in small towns where it is effectively the only option for restaurants and where the Uber Eats/Deliveroo model just doesn't work because of the economics," Liberum said.

Mr Shu came up with the idea for the firm after he moved from New York to London as a banking analyst. He was working long hours and was frustrated by the fact so few restaurants delivered, a service he had used daily in the US.

In the firm's early days, Mr Shu delivered all the food himself on a motorbike, while Greg Orlowski, his co-founder who has since left the business, developed the booking technology from his home in the US. Mr Shu still claims to get on his bike once a week to deliver an order to customers in London, as a way of staying in touch with riders.

As well as the UK, Deliveroo now operates in Australia, Belgium, France, Germany, Hong Kong, Italy, Ireland, Netherlands, Singapore, Spain, the United Arab Emirates and Taiwan.

Global sales at the firm more than doubled in 2017, jumping to £277m, but its losses continued to increase, doubling to nearly £185m as it invested in global expansion.

The firm uses more than 60,000 couriers - mostly using bikes or moped - to deliver food from restaurants to customers.

Deliveroo does not employ its riders directly, but pays them per delivery.

Last year, a group of 50 UK Deliveroo couriers won a six-figure payout after claiming they had been unlawfully denied holiday and minimum wages.--BBC

Pound slides to four-month low after Brexit talks end

The pound has sunk to a four-month low against the dollar after cross-party Brexit talks between the Conservatives and Labour collapsed.

On Friday evening, the pound was 0.52% lower against the dollar at $1.273, having had its worst week in a year.

The pound was 2% lower this week, its steepest decline since February last year when it fell by more than 2%.

Its fall reflects investors pricing a higher chance of the UK leaving the EU without a deal, analysts said.

"While talks with Labour were ongoing, the market was slightly more reassured that an EU customs union or something similar to the status quo would be the outcome," said Eimear Daly, a foreign exchange strategist at Macquarie Bank.

"Now the focus turns to the Prime Minister's ability to retain leadership of the Conservatives, or perhaps a more eurosceptic Tory Party leader," she said.

Pound v Dollar

Against the euro, the pound fell 0.46% to €1.140.

Pound v Euro

Mrs May has promised to set a timetable for the election of her successor after the next Brexit vote in the first week of June.

RBC Capital Markets chief currency strategist Adam Coles said there was growing uncertainty over whether the Brexit bill would pass, as well as doubts over who will replace Theresa May as Prime Minister.

"It looks increasingly likely she will be replaced by a pro-Brexit PM with no election, and that automatically increases the chances of a no-deal Brexit," said Mr Coles.

Since the UK's departure from the EU was delayed in March, the pound has broadly traded above $1.29 against the dollar.

Mrs May will try once again to win the support of MPs for her Brexit deal in the week beginning 3 June, when the Commons votes for the first time on the EU Withdrawal Agreement Bill - the legislation needed to implement her deal with the EU.

Brexit had been due to take place on 29 March - but after MPs voted down on three occasions the deal Mrs May had negotiated with the bloc, the EU gave the UK an extension until 31 October.--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

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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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