Major International Business Headlines Brief::: 24 May 2019

Fri May 24 05:45:07 CAT 2019

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Major International Business Headlines Brief::: 24 May 2019

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*  Steinhoff to face shareholder class action in Germany

*  South Africa's central bank leaves repo rate unchanged at 6.75 %

*  Zambia's mines minister orders regular audits at all mines

*  AB InBev expects total investment of up to $400 mln in Nigerian brewery

*  South Africa's TFG reports annual sales up almost 20%

*  Egypt's central bank keeps key interest rates unchanged

*  Safaricom, Vodacom plan $13 mln purchase of M-Pesa rights from Vodafone

*  Mediclinic core profit falls on Swiss regulatory changes

*  Kenya's Safaricom CEO Bob Collymore to stay an extra year in post

*  BP nears sale of stake in Egyptian oil firm to Dragon Oil –sources

*  Facebook plans to launch 'GlobalCoin' currency in 2020

*  Trump says Huawei could be part of trade deal

*  US regulators defend 737 Max actions

*  Huawei: China warns of investment blow to UK over 5G ban

*  Body Shop owner Natura to buy Avon for £1.6bn

*  Sky Bet boss: 'Industry should consider funding treatment centres'

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Steinhoff to face shareholder class action in Germany

BERLIN (Reuters) - Steinhoff will face a class action before a German regional court, dragging shares in the South African furniture retailer down by as much as 10 percent on Thursday, as the fallout from its billion-euro accounting scandal continues.

Steinhoff already faces around 6 billion euros ($6.68 billion) worth of legal claims following the fraud, which stunned investors that had bought into a story of a small South African outfit transformed into a discount furniture retailer straddling four continents.

A court in Frankfurt, where the company has a secondary stock-market listing, decided to bundle various cases brought by shareholders against the company and transfer them to a higher regional jurisdiction in the form of a class action, official documents published in Germany’s federal gazette on Wednesday showed.

Shareholders will ask German judges to state that Steinhoff’s balance sheets for 2013, 2014 and 2015 were incorrect in the hope of winning financial compensation for their losses.

A spokeswoman for Steinhoff, which delayed the publication of its 2017 and 2018 accounts following the scandal and has said irregularities could stretch back earlier than 2015, did not reply to requests for comment.

“I am convinced that we will be able to prove various violations of duties and help investors to win,” Maximilian Weiss, one of the lawyers representing shareholders said in a statement.

Steinhoff had failed in its duties to inform the public in a timely manner about the accounting irregularities, he continued, adding that other investors who had not yet brought their cases could now join the class action.

The company, which owns Mattress Firm Inc in the United States, the Fantastic chains in Australia and Conforama in France has been battling for survival since the scandal broke, wiping out shareholder equity and prompting numerous investigations and resignations of its senior leadership.

It has also pitted the company against its shareholders who blame the retailer for their losses, and sparked at least 10 material lawsuits against the company claiming around 6 billion euros in damages in total, according to its 2017 annual report published earlier this month, including a separate class action in the Netherlands.

The company also published its long-delayed results for 2017 earlier this month, reporting a $4 billion operating loss for the year. Its 2018 results are not expected until June.

Its shares fell by 10% in Johannesburg on Thursday before recovering to 1.35 rand per share - a 4.93% decline - by 1253 GMT. Its Frankfurt-listed shares were also down 5.6%.

($1 = 0.8976 euros)

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South Africa's central bank leaves repo rate unchanged at 6.75 %

PRETORIA (Reuters) - South Africa’s central bank kept its benchmark repo rate unchanged at 6.75 % on Thursday, saying while the medium term inflation forecast had moderated, economic growth was set to contract in the first quarter and continue to weaken.

“Recent monthly inflation outcomes have remained around the mid-point of the inflation target range, in part due to weak demand and positive inflation data surprises,” Governor Lesetja Kganyago told reporters in Pretoria.

Of the five members of the Monetary Policy Committee (MPC), three voted in favour of no change while two voted for a 25 basis point decrease.

Zambia's mines minister orders regular audits at all mines

LUSAKA (Reuters) - Zambia will carry out regular audits at all mines to avoid any repeat of the situation at Vedanta unit Konkola Copper Mines (KCM), which has breached the terms of its licence, the mining ministry said on Thursday.

Zambian President Edgar Lungu said on Monday the government planned to strip KCM of its mining licence and bring in a new investor. His spokesman said the move followed a number of breaches of the terms of the licence, without giving details.

A court hearing has been scheduled for Friday, according to documents seen by Reuters, following a high court order this week that named a Zambian law firm as the liquidator to oversee KCM.

Vedanta said it would challenge the order, which was granted after an application by Zambian state-owned ZCCM-IH, which holds a 20.6% stake in KCM.

“Vedanta has serious concerns about the intentions of the applicants and the procedures that were followed by ZCCM-IH as a representative of government to obtain a provisional liquidation order on an ex parte basis against KCM in an apparent misuse of the legal process to date,” it said.

Vedanta said among its concerns were that ZCCM-IH was not a major creditor of KCM and that since the order was granted ex-parte, the company was not able to present its case.

Vedanta also said that ZCCM-IH and the Zambian government were fully aware of the circumstances of the company and major decisions that were taken to manage KCM.

The company called for a meeting with the government “to come to a mutually agreeable solution to the current situation.”

ZCCM-IH officials and Lungu’s spokesman could not be reached for comment.

MINES AUDITS

The government’s action on KCM has added to concerns among the mining community about rising resource nationalism in Africa.

Mining Minister Richard Musukwa said the action at KCM “should not be misconstrued as nationalisation” and followed KCM’s failure to “comply with licence conditions”.

“The government will be undertaking regular audits at all the mines to ensure compliance and avoid the recurrence of the situation at KCM,” he said.

Zambia has already riled miners with tax changes that mining companies say will deter the investment Zambia desperately needs after repeated warnings from the International Monetary Fund about its debts and shrinking foreign currency reserves.

In addition, the country is facing rolling power cuts as water levels in hydroelectric dams have been depleted by drought.

A source at the Zambian power company ZESCO told Reuters it would hold talks with long-term power contract holders, which include miners, on how their needs could be met.

Industry sources say so far the country’s big miners, which include Glencore and First Quantum, as well as KCM, have not experienced power disruptions.

Zambia’s Chamber of Mines said on Thursday that the country, Africa’s second largest copper producer, was at risk of a drastic fall in copper output because of the impact of the tax changes.

AB InBev expects total investment of up to $400 mln in Nigerian brewery

JOHANNESBURG (Reuters) - Anheuser-Busch InBev (AB InBev), the world’s largest beer maker, expects the total investment in its new brewery at Sagamu in Nigeria, to be up to $400 million, Chief Executive Carlos Brito said on Wednesday.

The $250 million brewery has already started operation and capacity will be expanded in phases, Brito told reporters at a media briefing in Johannesburg, without giving a timeline for the next phase.

“Nigeria (is) becoming a more and more important market as we grow in that market,” he said.

“I mean we’re growing double digits, we didn’t grow in the past as fast because we were lacking capacity and now that we have capacity, strong brands and (a) great group of people we’re challenging the status quo there.”

South Africa's TFG reports annual sales up almost 20%

JOHANNESBURG (Reuters) - South African retailer The Foschini Group (TFG) reported a 19.6% rise in retail annual sales on Thursday as all three of its businesses performed well and online turnover jumped by 57.2%.

“Against a backdrop of tough trading conditions and in an environment where the retail sector is facing significant disruption, all three business segments produced strong turnover growth in relation to their respective markets,” Chief Executive Officer Anthony Thunström said in a statement.

Group retail sales for the year ended March 31 rose to 34.1 billion rand ($2.36 billion) from 28.5 billion. Online sales accounted for 8.8% of group turnover.

The retailer, which sells clothes, jewellery, homewares and furniture, declared a final dividend of 450 cents per share, up 7.1%.

($1 = 14.4438 rand)

Egypt's central bank keeps key interest rates unchanged

CAIRO (Reuters) - Egypt’s central bank on Thursday kept its key interest rates unchanged, in line with a Reuters poll of economists.

The central bank held its overnight deposit rate at 15.75 percent and its overnight lending rate at 16.75 percent, a bank statement said.

Safaricom, Vodacom plan $13 mln purchase of M-Pesa rights from Vodafone

NAIROBI (Reuters) - Kenya’s Safaricom will start a joint venture with Vodacom to acquire the intellectual property rights to the popular M-Pesa mobile financial services platform from Britain’s Vodafone, Safaricom’s CEO said on Thursday.

The 12 million euro ($13.4 million) deal will let both purchasers make significant savings in royalties paid to Vodafone and expand the service to new African markets, said Bob Collymore, Safaricom’s CEO.

“We are taking ownership of M-Pesa, the brand and the intellectual property. Joint ownership between us and Vodacom and we then use that as a platform into running into other markets across the continent,” Collymore told Reuters in an interview.

Safaricom, the most profitable company in East Africa, pays 2 percent of its annual M-Pesa revenue to Vodafone. Revenue from M-Pesa stood at 75 billion shillings ($741 million) in Safaricom’s financial year to the end of March.

Vodacom, a South African operator which owns 35 percent of Safaricom, pays 5 percent in an intellectual property fee to Vodafone from its M-Pesa business, which is mainly in Tanzania.

“More important than the significant savings is about us determining the future, the roadmap of M-Pesa because at the moment the roadmap is determined by Vodafone,” Collymore said.

“Given that the bulk of the M-Pesa business is in Africa, between Tanzania and Kenya, it is right for us to be determinants.”

The acquisition of the intellectual property rights by the new joint venture will allow the partners to more easily develop local products, Collymore said, pointing to Fuliza, an M-Pesa overdraft facility launched in Kenya in January.

Fuliza, which is operated jointly with two local banks, has garnered 8.8 million users who have borrowed a combined 45 billion shillings, Safaricom said earlier this month.

Apart from developing new products based on the M-Pesa platform, Safaricom and Vodacom also want to launch into other African markets.

Collymore cited Ethiopia, where economic liberalisation plans put in place by a new prime minister last year have left firms scrambling to position themselves for entry.

“We are watching Ethiopia closely because as we see the liberalisation of the markets, both the mobile payments market, the telecoms market and the banking sector, we think there could be opportunities,” he said.

Vodafone holds a 5% stake in Safaricom.

Safaricom’s plan to form a joint venture with Vodacom and acquire the intellectual property rights to M-Pesa still requires regulatory and shareholder approvals in South Africa. It also requires regulatory approval in Kenya, Collymore said.

“We are putting everything in place just subject to getting the right approvals,” he said, adding the joint venture should be set up and the deal with Vodafone completed this year.

($1 = 0.8976 euros)

($1 = 101.2000 Kenyan shillings)

Mediclinic core profit falls on Swiss regulatory changes

JOHANNESBURG (Reuters) - Mediclinic International Plc, reported a 4% fall in full-year core profit on Thursday, in line with market expectations, hit by regulatory changes for its Swiss business.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for the year ended March 31 fell to 493 million pounds ($623 million) from 515 million a year earlier, in line with estimates in a Refinitiv poll.

Mediclinic, which also has operations in southern Africa and the Middle East, has faced stricter regulations in Switzerland that have hobbled growth and put pressure on margins. These include tariff reductions for outpatients and a less favourable insurance mix.

“The operating performance was impacted by the lower contribution from Hirslanden (Swiss), offset by an improved performance in the second half of the financial year from Mediclinic Southern Africa and Mediclinic Middle East,” the firm said in a statement.

Hirslanden, the Swiss business that accounts for 47% of group revenue, reported a 10% fall in adjusted EBITDA and a 16% EBITDA margin, down from 18.3% a year earlier.

The regulatory changes in Switzerland also led to non-cash impairment charges on Hirslanden property, equipment and vehicles of 186 million pounds and trade names of 55 million pounds, Mediclinic added.

($1 = 0.7911 pounds)

Kenya's Safaricom CEO Bob Collymore to stay an extra year in post

NAIROBI (Reuters) - The chief executive of Safaricom, Bob Collymore, said on Thursday that he will stay on in his role for an extra year at Kenya’s biggest telecoms operator.

“I’m here until the year 2020,” Collymore told reporters on the sidelines of a meeting. He was due to step down in August.

“I kind of owed the company... and the board and I agreed we will stretch that for a year.”

Two company sources said late last month that Collymore had planned to step down in August for health reasons, but the government’s insistence he should be succeeded by a Kenyan had delayed the announcement of a replacement.

Collymore has helped to build Safaricom into East Africa’s most profitable company, thanks to the popular mobile money transfer service M-Pesa and a growing customer base.

Safaricom is 35% owned by South Africa’s Vodacom and controls about 62% of Kenya’s mobile market, with more than 30 million subscribers. Britain’s Vodafone has a 5% stake and the Kenyan government 35%.

Safaricom’s core earnings for the financial year that ended in March rose 13.1 percent to 89.6 billion shillings ($887 million), driven by growth in its M-Pesa digital financial business.

($1 = 101.0000 Kenyan shillings)

BP nears sale of stake in Egyptian oil firm to Dragon Oil -sources

LONDON (Reuters) - BP is nearing the sale of its stake in a major Egyptian oil and gas company to Dubai-based Dragon Oil for over $600 million, industry and banking sources said.

The sale, which is expected to complete in the coming weeks, would mark the end of BP’s 50-year-old partnership in the Gulf of Suez Petroleum Company (GUPCO) as the London-based company focuses on developing Egypt’s large offshore gas reserves.

Dragon Oil, a subsidiary of Dubai’s Emirates National Oil Company (ENOC), has said it plans to expand its international operations and boost its production to 300,000 barrels of oil equivalent per day by 2025.

GUPCO produces over 70,000 barrels per day of oil and 400 million cubic feet per day of gas, the sources said.

A BP spokesman declined to comment. The Egyptian Petroleum Ministry and the Egyptian General Petroleum Corporation (EGPC) had no immediate comment. ENOC could not be reached for comment.

The GUPCO sale has received the initial approval of Egypt’s Petroleum Ministry after it had objected to an agreement BP had reached last year with North African-focused oil and gas company SDX Energy to buy the asset, one of the sources said.

Dragon Oil’s main asset is Turkmenistan’s Cheleken field, where it produces close to 90,000 bpd. In Egypt, it has a 100% interest in the East Zeit Bay block.

The cash raised from the sale will help BP towards its goal of selling more than $5 billion of assets following the $10.5 billion acquisition of BHP’s onshore oil and gas assets in the United States last year.

BP’s total net production in Egypt reached 49,000 bpd of oil and gas liquids and 878 million cubic feet per day of gas in 2018, according to its annual report.

In February, BP launched the Giza/Fayoum field in the West Nile Delta offshore area which is expected to produce around 60,000 boe/d.

Facebook plans to launch 'GlobalCoin' currency in 2020

Facebook is finalising plans to launch its own crypto-currency next year.

It is planning to set up a digital payments system in about a dozen countries by the first quarter of 2020.

The social media giant wants to start testing its crypto-currency, which has been referred to internally as GlobalCoin, by the end of this year.

Facebook is expected to outline plans in more detail this summer, and has already spoken to Bank of England governor Mark Carney.

Founder Mark Zuckerberg met Mr Carney last month to discuss the opportunities and risks involved in launching a crypto-currency.

Facebook has also sought advice on operational and regulatory issues from officials at the US Treasury.

The firm is also in talks with money transfer firms including Western Union as it looks for cheaper and faster ways for people without a bank account to send and receive money.

How will Facebook's crypto-currency work?

Facebook wants to create a digital currency that provides affordable and secure ways of making payments, regardless of whether users have a bank account.

The social networking site, which owns WhatsApp and Instagram, is hoping to disrupt existing networks by breaking down financial barriers, competing with banks and reducing consumer costs.

Nicknamed Project Libra, Facebook's plans for a digital currency network were first reported last December.

The project will see it join forces with banks and brokers that will enable people to change dollars and other international currencies into its digital coins.

A small group of co-founders are expected to launch the Swiss-based association in the coming weeks.

Facebook is also reportedly in talks with a number of online merchants to accept the currency as payment in return for lower transaction fees.

What is crypto-currency?

Virtual currencies can be used to pay for things in the real world, such as a hotel room, food or even a house.

Digital tokens are held in online wallets, and can be sent anonymously between users.

Crypto-currencies run on blockchain technology. A blockchain is a ledger of blocks of information, such as transactions or agreements, that are stored across a network of computers.

This information is stored chronologically, can be viewed by a community of users, and is not usually managed by a central authority such as a bank or a government.

The concept was designed to ensure security and anonymity for users, by preventing tampering or hijacking of the network.

What are the concerns?

Facebook has come under fire in recent years over its handling of users' personal data, and regulators are likely to examine the launch closely.

Earlier this month, the US Senate and Banking committee wrote an open letter to Mr Zuckerberg questioning how the currency will work, what consumer protection will be offered and how data will be secured.

Facebook has also discussed the process of identity checks and how to reduce money laundering risks with the US Treasury.

It is believed that Facebook and its partners want to prevent wild swings in the coin's value by pegging it to a basket of established currencies, including the US dollar, euro and Japanese yen.

Will it be second time lucky?

It's not the first time Facebook has dabbled in digital currencies. A decade ago, it created Facebook Credits, a virtual currency that enabled people to purchase items in apps on the social networking site.

However, Facebook ended the project after less than two years after it failed to gain traction.

The company will also have to navigate a myriad of regulations in the countries it wants to launch in. India, a rumoured target for Facebook, has recently clamped down on digital currencies.

However, the biggest test is likely to be whether people will trust the social networking giant enough to start changing their cash for the digital coin.

Facebook is in the initial phase of engaging with governments, central banks and regulators, and insiders admit that launching any crypto currency network by the start of next year is ambitious.

Facebook, Western Union and the Bank of England declined to comment.

What is the appeal of crypto-currencies?

The biggest attraction of digital currencies to banks and big firms is the technology that underpins them.

Blockchain technology can help to slash the time and cost of sending money across borders by bypassing banking networks.

Lord King, the former Governor of the Bank of England, warned two decades ago that central banks could become "irrelevant" if people started to use digital currencies as pounds and pennies are used today.

Blockchain expert David Gerard said that Facebook would gain access to valuable spending data by creating its own payment system.

However, he questioned why the social media giant needed to mint its own crypto-currency to harvest that data. Instead, he said, Facebook could create a platform like PayPal, which allows users to transfer traditional currencies.

Crypto-currencies are vulnerable to fluctuations in value, which Gerard said could create a barrier to the success of Facebook's so-called GlobalCoin.

"Normal people don't want to deal with a currency that's going up and down all the time," he explained.

But Garrick Hileman, a researcher at London School of Economics, said the GlobalCoin project could be one of the most significant events in the short history of crypto-currencies.

Conservatively, he estimated that around 30 million people use crypto-currencies today. That compares to Facebook's 2.4 billion monthly users.--BBC

Trump says Huawei could be part of trade deal

US President Donald Trump has said Huawei could be part of a trade deal between the US and China, despite branding the telecoms firm "very dangerous".

The US-China trade war has escalated in recent weeks with tariff hikes and threats of more action.

Washington has also targeted Huawei by putting the firm on a trade blacklist.

The US argues Huawei poses a national security risk, while Beijing accuses the US of "bullying" the company.

"Huawei is something that is very dangerous," Mr Trump told reporters at the White House on Thursday.

"You look at what they've done from a security standpoint, a military standpoint. Very dangerous."

Last week, the Trump administration added Huawei - the world's second largest smartphone maker - to its "entity list", which bans the company from acquiring technology from US firms without government approval.

But Mr Trump has said it is "possible" that the company could be part of any trade agreement with Beijing.

"If we made a deal, I could imagine Huawei being possibly included in some form or some part of it," he said.

What are the concerns about Huawei?

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 equipment 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.

The US trade ban on Huawei has already had a ripple effect on the global tech industry, with several companies stepping back from the company.

"The best response to the US bullying is that Chinese firms continue to grow stronger," China's Commerce Ministry spokesman Gao Feng said at a briefing in Beijing on Thursday.

What about trade tariffs?

Mr Trump's latest comments on Huawei came on the heels of an announcement of a $16bn ($12.6bn) aid programme to help US farmers hurt by the trade conflict with China.

Earlier this month the US increased tariffs on $200bn worth of Chinese imports from 10% to 25% after the two sides failed to reach a deal on trade.

China hit back by announcing plans to raise levies on $60bn of US imports from 1 June.

The Trump administration has threatened to impose duties on another $300bn worth of Chinese goods, prompting industry to urge and end to the trade war as it warned of a "catastrophic" effect on consumers.

For now, efforts toward resolving the trade dispute appear to have stalled. No formal discussions have been scheduled since the last talks ended without a deal on 10 May.

China threatens to retaliate over US sanctions

US-China trade war in charts

On Thursday, China's Commerce Ministry's Mr Gao fired a shot at the US, saying if they want to continue trade talks "they should show sincerity and correct their wrong actions".

The world's two largest economies have been engaged in a fractious dispute over trade since the early days of Mr Trump's presidency.

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

Mr Trump also wants to cut America's trade deficit with China, which he says is hurting US manufacturing.--BBC

US regulators defend 737 Max actions

US aviation regulators have defended their response to two fatal Boeing 737 Max plane crashes.

The Federal Aviation Administration (FAA) told the BBC that it didn't have the information needed to ground the 737 Max after the Lion Air crash.

Civil aviation authorities from 33 countries gathered in Texas on Thursday to discuss when the current grounding order should be lifted.

The FAA said it was making sure that the 737 Max was "as safe as possible".

An Ethiopian Airlines flight crashed in March, killing all 157 people on board.

It followed the Lion Air disaster in Indonesia in October, in which 189 people died.

Boeing grounded its entire global fleet of 737 Max aircraft in March after the two crashes.

"After the Lion Air crash, we didn't have the information or data we needed to ground an aircraft," Dan Elwell, the FAA's acting administrator told the BBC.

"The action that we took after the Lion Air accident was sufficient to make sure that the world... if that happened again, could handle it, that the crews and operators could handle it."

Mr Elwell said that he could not comment on the active investigations into the two crashes, and that the FAA, together with international aviation authorities, was examining links found between the interim reports into each plane crash.

FAA says no fixed timetable for grounding to be lifted

Boeing completes 737 Max software upgrade

China's top airlines seek compensation

"I'm confident that, working together, we're going to fix it, and the 737 will go on to be as the 737 varieties before it - the safest planes in the sky."

The FAA has not set out a timetable for when the 737 Max will return to service.

Mr Elwell said if it took a year for the grounding order to be lifted "so be it".

The regulator said that during the meeting, it would provide its "safety analysis that will form the basis for our return to service decision process".

The FAA also said it "will provide safety experts to answer any questions participants have related to their respective decisions to return the fleet to service".

At the same time as the FAA is meeting regulators in Texas, the International Air Transport Association (IATA) is holding a separate meeting in Montreal, Canada, with 737 Max airline operators from across the world.

Earlier, officials for American Airlines, United Airlines and Southwest Airlines told Reuters that once the order is lifted, it would take between 100-150 hours of preparation before the grounded 737 Max planes will be ready for flying.

The Mcas system

Boeing has developed a software update for the Manoeuvring Characteristics Augmentation System (Mcas) on the 737 Max - a new feature on the jet designed to improve the handling of the plane and to stop it pitching up at too high an angle.

Mcas has been linked to both the Ethiopian Airlines crash in March, which killed 157 passengers and crew, and the Lion Air disaster in Indonesia at the end of October, in which 189 people perished.

However, Boeing has not formally submitted the software fix to the FAA.

Mr Elwell said: "We're going to make sure that when the 737 Max flies again, that the Mcas system and the inputs that make the Mcas system activate are refined in a way that makes the aircraft as safe as possible."--BBC

Huawei: China warns of investment blow to UK over 5G ban

A top Chinese diplomat has warned that there could be "substantial" repercussions for her country's investment in the UK, if Huawei were to be banned from Britain's 5G network.

Chen Wen also told the BBC that Beijing had already "witnessed some conscious moves" in that direction.

Last week, the US put Huawei on a list that curbs the ability of US firms to trade with it.

US officials blamed national security concerns over Huawei technology.

The UK is still reviewing its 5G telecoms policy and may allow Huawei to supply "non-core" 5G components, such as antenna masts.

'Welcoming arm?'

Huawei is considered a world-leading provider of next-generation 5G technology, which will provide superfast mobile internet connections.

Speaking to the BBC's World at One programme, Ms Chen, who is the Chinese chargé d'affaires in London, said the UK economy would be damaged by the message any ban on Huawei sent out to international and Chinese companies.

"The message is not going to be very positive," she said.

"Is UK still open? Is UK still extending a welcoming arm to other Chinese investors?"

When asked how large the repercussions would be, the embassy official said: "It's hard to predict at the moment, but I think it's going to be quite substantial."

Ms Chen insisted that her government would never force a Chinese firm operating abroad to provide information to its intelligence agencies.

She went on to claim that there was a bit of "hysteria" in the United States about the rise of Chinese influence and the UK should make decisions based on its own national interest.

She called Huawei's investment in the UK "a vote of confidence in the UK economy".

Chips and phones

Earlier this week, Cambridge-based chip designer ARM told its staff they must halt "all active contracts, support entitlements, and any pending engagements” with Huawei to comply with a recent US trade clampdown.

ARM's designs form the basis of most mobile device processors worldwide.

On the same day, EE confirmed that its range of 5G phones would not include Huawei models.

It followed a decision from Google to bar the smartphone maker from some updates to the Android operating system.--BBC

Body Shop owner Natura to buy Avon for £1.6bn

Brazilian cosmetics group Natura has announced that it is buying UK-based direct-selling cosmetics business Avon.

Natura, which already owns The Body Shop and Aesop, is Brazil's top business in cosmetics, perfumes and toiletries.

Its all-stock offer of about $2bn (£1.6bn) means Natura shareholders will hold 76% of the combined company, which will have annual revenue of over $10bn.

The deal will create the world's fourth-largest cosmetics company.

The new combined company will boast 3,200 stores worldwide with a presence in 100 countries.

Is Avon still calling?

Avon cuts jobs at UK distribution centre

Avon has been struggling to modernise its global business over the last few years, as its door-to-door sales model has become less popular in the internet age.

In 2016, the company said it was moving its headquarters from New York to the UK "over time" while cutting 2,500 jobs worldwide as part of a turnaround plan.

At the same time, Avon sold its US operations to investment fund Cerberus.

In April, LG Household & Health Care agreed to acquire both Avon and Cerberus' stakes in the US business.

According to analysts at Brasil Plural, Natura is "pursuing the goal of becoming a global brand", but warned it would need to significantly invest in Avon's operations in Brazil.

Avon already has 2.2 million direct marketing consultants in Brazil.

Natura has a similar business model and many Avon representatives in Brazil also sell Natura products too.

The Brazilian cosmetics maker purchased The Body Shop in a deal believed to be worth 1bn euros ($1.1bn; £880m) from French beauty group L'Oreal in 2017.

Since then, Natura has been trying to turn The Body Shop around, which has suffered from increased competition and a difficult retail environment.

L'Oreal bought the business for around €940m in 2006 at the height of its success but it has failed to thrive since.--BBC

Sky Bet boss: 'Industry should consider funding treatment centres'

The boss of one of the country's biggest online betting companies says the industry should consider funding a network of gambling treatment centres.

Richard Flint, executive chairman of Sky Bet, told BBC News the industry "hadn't done enough to look after problem gamblers".

The Gambling Commission estimates about 400,000 adults in Great Britain have a gambling problem.

Charity Gambling With Lives described Mr Flint's comments as "insulting".

Its founders said he had underplayed the damage gambling addiction could do to people's lives.

Sky Bet has been at the centre of the growth of the online betting industry and the company last year was valued at more than £3bn.

Reflecting on his time at the company before he leaves his role next month, Mr Flint said: "In the past, the industry has perhaps encouraged people to spend beyond their means."

Sky Bet is one of Leeds's biggest private employers, with 1,500 people based at its city HQ

In 2018 Sky Bet had to pay a £1m fine for "failing to protect vulnerable customers".

Speaking exclusively to BBC News, Mr Flint acknowledged there had been failings.

He said: "The industry hasn't done enough to look after problem gamblers. We need to do more to self-regulate, and if we don't do more there will be more regulation forced upon us."

Charles and Liz Ritchie from Sheffield founded the charity Gambling With Lives after their 24-year-old son Jack ended his life in 2017 after developing a gambling addiction.

"Jack started gambling whilst he was at school," said Mr Ritchie.

"And he took his own life because he never thought he would be free from gambling."

Mrs Ritchie has described her son's gambling addiction as like being addicted to heroin.

"I feel insulted by what Mr Flint has said, it minimises the damage the industry has done to people's lives," she said.

"We have gambling companies saying they want to put money into treating gambling addiction, but they don't want to put money into gambling prevention."

Figures from the Gambling Commission, the body that regulates the industry, suggest the number of adults taking part in online betting each month has nearly doubled, from 1.7 million adults in 2016, to 3.2 million in 2019.

Gambling and betting companies already contribute funding towards the charity Gamble Aware and the industry has recently provided funding for GamStop, a programme designed to allow customers to ban themselves from online betting platforms.

Earlier this month a paper in the British Medical Journal recommended a mandatory tax be introduced on the gambling industry, which could be used to fund gambling treatment centres.

The NHS has one dedicated gambling addiction treatment centre in London, with a second centre due to open this summer in Leeds, where Sky Bet is based.

Mr Flint said the gambling industry itself should now consider funding a national network of treatment centres, without the introduction of a statutory tax.

"I've been to a gambling addiction treatment centre and seen the devastation that gambling addiction has caused people and their families," he said.

"Leeds is opening a treatment centre this summer which is a great step forward, but I do think we need a bigger network of treatment centres going forward."--BBC

INVESTORS DIARY 2019

Company

Event

Venue

Date & Time

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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