Major International Business Headlines Brief::: 15 November 2019

Fri Nov 15 02:31:14 CAT 2019

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Major International Business Headlines Brief::: 15 November 2019

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*  Blow To Bitcoin As Former ECB Boss Makes Dire Warning Over Crypto’s Future

*  Iranian gov reportedly offering bounties to those who rat out illegal Bitcoin miners

*  South Africa's SAA cancels flights, offers striking employees new wage increase

*  Nigerian stocks rise to five-week high as banks rally

*  Mediclinic International reports 4% rise in H1 profit

*  Nedbank to pay for mortgages under new rewards scheme

*  Kenyan shilling firms to near 4-1/2 month high, helped by remittances

*  China-backed consortium wins $14 bln Guinea iron ore deal, pipping Australia's Fortescue

*  Egypt issues dollar-denominated eurobonds worth $2 billion

*  Australia and others ask for Brexit trade compensation

*  European Investment Bank drops fossil fuel funding

*  Mercedes-Benz to cut jobs amid tougher emissions rules

*  Nike to stop direct sales through Amazon

*  Google set to offer banking current accounts

*  Fed Not Focused on Daily Ups, Downs of Trade Deal: Williams

 <mailto:info at bulls.co.zw> 

Blow To Bitcoin As Former ECB Boss Makes Dire Warning Over Crypto’s Future

Bitcoin and cryptocurrencies have attracted strong criticism from the world's central bankers this year–sparked, perhaps, by Facebook's plans for its own bitcoin rival.

The bitcoin price soared in the first six-months of this year only to stall amid concerns lawmakers and regulators could be poised to crackdown on the nascent bitcoin and crypto industry.

Now, former European Central Bank (ECB) president Jean-Claude Trichet has slammed bitcoin and Facebook's libra project, warning bitcoin is "not real" and not the future of money.

bitcoin, bitcoin price, ECB, Jean-Claude Trichet, image

Jean-Claude Trichet, president of the European Central Bank from 2003 to 2011, was speaking at a ... [+]GETTY IMAGES

"I am strongly against bitcoin, and I think we are a little complacent," said Trichet, speaking during a panel discussion at Beijing-based media group Caixin’s annual conference last weekend. His comments were first reported by the South China Morning Post newspaper.

"[Bitcoin] itself is not real, with the characteristics that a currency must have."

Trichet also slammed bitcoin and cryptocurrency speculation, which he branded "not healthy."

"Even if [the cryptocurrency] is supposed to be based on underlying assets, I am observing a lot of speculation. It is not healthy," Trichet said, adding buying a cryptocurrency is "in many respects pure speculation."

Bitcoin and cryptocurrency adoption has failed to live up to sky-high expectations since bitcoin exploded into the public consciousness in 2017.

Bitcoin soared in 2017 from under $1,000 per bitcoin to almost $20,000, sparking a digital gold rush and making many early adopters overnight millionaires.

Trichet's remarks come amid excitement in the bitcoin and cryptocurrency industry that China could be about to relax its strict crypto restrictions following a ban on bitcoin exchanges in 2017.

Last month, some bitcoin and cryptocurrency market analysts pointed to comments made by China's president President Xi Jinping that the country should "seize the opportunity" of bitcoin's blockchain technology as the reason behind bitcoin's sudden rally.

The bitcoin price rallied hard earlier this year after a disastrous 2018 but that rally has stalled. ... [+]COINDESK

"We are already in a domain which has much less physical currency,” he said. "Whether we are in a domain where that will be replaced with crypto? I have doubts there."

Trichet's comments echo remarks made by new ECB president Christine Lagarde earlier this year when she warned cryptocurrencies are "shaking the system"—something that could signal a change in the ECB's approach to bitcoin and crypto and potentially spur adoption.

Elsewhere, the last ECB president, Mario Draghi, has said that bitcoin and crypto "are not designed in ways that make them suitable substitutes for money."--Forbes.com

 <mailto:info at bulls.co.zw> 

Iranian gov reportedly offering bounties to those who rat out illegal Bitcoin miners

The Iranian government is reportedly offering a bounty for anyone that dobs illegal Bitcoin BTC mining businesses to the authorities.

A spokesperson from Iran‘s Energy Ministry reportedly said that anyone who outs those using subsidized electricity for cryptocurrency mining will be rewarded with up to 20 percent of the funds recovered from the miner, PressTV reports. Damages are based on how much electricity the cryptocurrency miners have used.

Energy Ministry spokesperson Mostafa Rajabi made the announcement in an interview with the IRIB News yesterday.

Rajabi said that using the national grid to mine cryptocurrencies during peak hours will be outlawed under new regulations used to calculate electricity prices.

To calculate the financial impact of Bitcoin miners on the grid, Rajabi said a baseline figure of $0.08 per KWh will be used.

According to the report, businesses that set up their own power plants for cryptocurrency miners — and meet the country’s mining regulations — will be given incentives. The national grid will be used to support these farms when renewable energy levels drop.

In June, Iranian authorities seized 1,000 Bitcoin mining machines from two abandoned factories that had been using state subsidized electricity to mine cryptocurrency without a license.

In August of this year, the Iranian government ratified a bill that recognized cryptocurrency mining as a legitimate industry.

While it’s becoming clear that the Iranian government is against using subsidized electricity to mine cryptocurrencies, mining itself is not outlawed.

The practice will be allowed inside Iran but only under certain conditions: if miners get the green light from the country‘s industry ministry, don’t mine coins within a 30-kilometer radius of all provincial centers except for the capital Tehran and the central city of Esfahan.

What a cryptocurrency mining firm must do to obtain the go ahead from the country’s industry ministry remains unclear.

You could always go completely off-grid and hide the mining machines in a skyscraper water park.

H/T – The Block

South Africa's SAA cancels flights, offers striking employees new wage increase

JOHANNESBURG (Reuters) - South African Airways (SAA) has cancelled flights scheduled for Friday and Saturday because of a pending strike by a majority of employees but said on Thursday it hoped its revised wage offer would avert the walkout at the state-run carrier.

SAA has failed to turn a profit since 2011 while relying on state bailouts to fund a growing financing gap.

The airline is also without a permanent chief executive and has yet to file annual results for the two most recent financial years because of concerns about its viability as a business.

Unions representing about 3,000 of its 5,000-member workforce said on Wednesday that cabin crew and other workers would strike over wages and plans to cut more than 900 jobs.

The carrier said on Wednesday it might never recover if the strike went ahead.

Unions are demanding an immediate 8% increase, and after late night negotiations SAA said on Thursday it would offer a 5.9% raise from April when it hopes to have secured the necessary funding.

“The increase is not immediately available. We can only implement it once we have secured funding,” SAA spokesman Tlali Tlali said during a live interview on television news channel eNCA.

“We have a meeting scheduled for today at 2 o’clock and we are hopeful we will be able to resolve the issue ... It will include all the unions ... and if the meeting yields positive results we will then activate some contingency plans that will allow us to reinstate flights,” said Tlali.

Only flights directly operated by SAA would be affected. Flights by subsidiaries Mango, SA Express and SA Air Link, as well as those of private operators, would not be affected, SAA said.

INDEFINITE STRIKE

The airline said it expected unions to respond at an emergency meeting at 1200 GMT.

Unions said the strike would begin at 4 a.m. (0200 GMT) on Friday and go on indefinitely. They are calling on SAA’s check-in, ticket sales, head office, technical staff and ground staff to take part.

Zazi Nsibanyoni-Mugambi, president of the South African Cabin Crew Association (SACCA) that is leading the strike with the National Union of Metalworkers of South Africa (NUMSA), said the new offer was unacceptable.

“They really need to get serious, 5.9% simply won’t cut it. It’s just over 1% more than we are asking for and we think it’s attainable, so last night we asked SAA (negotiators) to go and get a fresh mandate from management,” said Nsibanyoni-Mugambi.

Numsa spokeswoman Phakamile Hlubi-Majola said the union was still consulting its members on whether to accept or reject the revised wage offer.

SAA flies around 6.8 million passengers annually to six continents with routes to New York, London and Hong Kong among its eight international destinations.

Two other unions at South African Airways (SAA) representing about 2,500 employees mostly in technical and mid-management jobs, said they would go to the labour court to block the state airline’s plan to cut jobs.

“The timing was not good at all. How can you issue Section 189 (redundancy) notices while you are busy in a wage dispute. It’s bad faith bargaining for SAA to come with this threat,” said Frank Mackenzie, president of union AUSA.

Nigerian stocks rise to five-week high as banks rally

ABUJA (Reuters) - Nigerian stocks rose 1.84% to a five-week high on Thursday, powered by demand for stocks in the relatively liquid banking sector.

The index, which is down 16% so far this year, rose on Thursday to a level last seen in October, as Nigeria’s top 10 banking shares soared 7.04%.

Access Bank, which completed a takeover of local rival Diamond Bank in April, gained 9.6%. Access is up 43% year to date.

Mediclinic International reports 4% rise in H1 profit

JOHANNESBURG (Reuters) - Mediclinic International Plc reported a 4% rise in half-year core earnings on Thursday as the company’s Swiss business adjusted to regulatory changes and its South African and Middle Eastern operations performed well.

The private healthcare group, listed in London and Johannesburg, said earnings before interest, tax, depreciation and amortisation (EBITDA) rose to 222 million pounds ($284 million) from 213 million a year earlier.

Revenue rose around 9% in the six months ended Sept. 30, as it adapted to stricter regulations in Switzerland that had hobbled growth and put pressure on margins.

“The Group delivered a solid first-half financial performance with all three divisions growing revenue, EBITDA and patient volumes,” said Chief Executive Ronnie van der Merwe.

“I am pleased with the progress we have made in adapting the business to current healthcare trends and changing regulatory environments, especially at Hirslanden in Switzerland.”

Hirslanden, the Swiss business that accounts for 47% of group revenue, reported a 5% rise in revenue. The division has had to adjust to regulatory changes including tariff reductions for outpatients and a less favourable insurance mix.

Revenue from Mediclinic Southern Africa, which comprises South Africa and Namibia, rose 7%, helped by an additional day case clinic opened in Stellenbosch, South Africa, in June.

Revenue at the company’s Middle Eastern unit rose by 8%, helped by the ramp-up of Mediclinic Parkview Hospital in Dubai and improvement in its Abu Dhabi business.

Mediclinic shares were up 0.07% at 72.55 rand as of 0814 GMT.

Founded in South Africa in 1983, Mediclinic runs 78 hospitals, five sub-acute hospitals, 13 day case clinics and 22 outpatient clinics.

($1 = 0.7815 pounds)

Nedbank to pay for mortgages under new rewards scheme

JOHANNESBURG (Reuters) - South Africa’s Nedbank could pay off mortgages or fund holidays for a small number of customers that exhibit good financial behaviour under its revamped rewards programme, its head of loyalty and rewards Dharmesh Bhana told Reuters.

Its Greenbacks programme was overhauled this year as the country’s biggest lenders step up efforts to win and retain customers following the launch of a number of upstart banks.

Around 600,000 people are using Greenbacks and the numbers are growing rapidly, Nedbank said.

The kinds of behaviour it will reward include the use of cards rather than cash, responsible borrowing and saving.

“It’s in our interest to make sure customers manage their money well,” Bhana said, adding the bank wanted to differentiate its programme from the standard, points-based models already widely available.

As well as standard offerings such as deals and vouchers, a small number of customers will receive rewards linked to the specific behaviour encouraged, for instance a refund on a mortgage or other loan which the customer regularly pays on time.

Banks around the world are scrambling to shore up loyalty as new digital lenders and fintech firms threaten their customer bases. HSBC has started offering financial advice, for example.

In South Africa, where a number of upstart lenders have launched in the past year, FirstRand, which runs the country’s biggest retail bank by market share, is also developing a money management offering.

The responsible borrowing element of Nedbank’s programme, which is yet to launch, will cap the amount that can be doled out to customers at 1.5 million rand ($101,000) per quarter, with one customer getting a pay back in each period.

In the future, customers that successfully save under the programme could see Nedbank fund whatever it is they were saving for, such as a holiday, or offer foreign currency for their destination. Though this is still being developed and may work differently.

It is also planning to introduce a part of the programme centred on rewarding customers via interest rates and fees, Bhana said.

($1 = 14.8839 rand)

Kenyan shilling firms to near 4-1/2 month high, helped by remittances

NAIROBI (Reuters) - The Kenyan shilling firmed on Thursday to near a four and a half-month high, helped by remittance inflows, traders said.

At 0718 GMT, commercial banks quoted the shilling at 102.95/103.15 per dollar, compared with 103.10/30 at Wednesday’s close. The last time the shilling traded at its present level was on June 24, Refinitiv data showed.

China-backed consortium wins $14 bln Guinea iron ore deal, pipping Australia's Fortescue

CONAKRY (Reuters) - A consortium representing Chinese, French and Singaporean interests won a $14 billion tender to develop part of Guinea’s Simandou iron ore project, sources familiar with the talks told Reuters, edging out Australia’s Fortescue Metals Group.

The consortium - which includes Société Minière de Boké (SMB) and Singapore’s Winning Shipping as well as Guinean government interests - has committed to develop blocks 1 and 2 of the largest known deposit of its kind, holding more than 2 billion tonnes of high-grade ore.

Guinea has sought to develop the Simandou deposit for decades, but the project has been mired in protracted legal disputes and the high costs have curbed interest.

The government required bidders to build a 650 km (400 mile) railway and deepwater port to transport the ore from the remote southeastern corner of Guinea to the coast for export, deterring some miners from bidding.

SMB-Winning put $14 billion on the table to develop the blocks and build the infrastructure, according to a government source who asked not to be named because they are not authorised to speak on behalf of the mining ministry.

SMB-Winning chairman Fadi Wazni on Wednesday confirmed the figure.

“The Simandou Project will be crucial for Guinea’s future. This mega deposit is an opportunity in terms of employment and wealth creation for the whole country,” said Sun Xiushun, the consortium’s chief executive.

Fortescue had offered $9 billion for the blocks but did not formally promise to build the railway dubbed the “Transguinéen”, two government sources told Reuters on Wednesday.

Transguinéen was pivotal in the decision to grant the blocks to SMB-Winning, mines minister Abdoulaye Magassouba told Reuters.

On Thursday, Fortescue confirmed in a statement that it had lost the bid.

The Australian company said it will focus on its $3.88 billion investment in the Eliwana and Iron Bridge projects in the Pilbara area of northwestern Australia. Pilbara is a key area for miners of the steel-making material.

Eric Humphery-Smith, senior Africa analyst at consultancy Verisk Maplecroft, said the outcome was hardly surprising.

“It was clear from the beginning that SMB was more likely to commit seriously to the Trans-Guinean railway than Fortescue - a deal-breaker for this project,” Humphery-Smith said.

Investors in the relatively little-known winning consortium include Chinese aluminium producer Shandong Weiqiao, a unit of China Hongqiao and Yantai Port Group, as well as Guinea’s government.

The consortium is Guinea’s leading exporter of bauxite, an aluminium ore.

Magassouba said the government would now hash out the technical details of the deal with SMB-Winning and put the resulting agreement to a vote in parliament.

SMB-Winning aims to bring the deposit to production within five years of the agreement being ratified.

Egypt issues dollar-denominated eurobonds worth $2 billion

CAIRO (Reuters) - Egypt has issued dollar-denominated eurobonds worth $2 billion in three tranches to cover part of its $5 billion 2019-2020 budget, the finance ministry said in a statement on Thursday.

The issuance included $500 million of four-year bonds with a 4.55% yield, $1 billion of 12-year bonds with a 7.05% yield, and $500 million of 40-year bonds with a 8.15% yield, it said.

Subscription orders exceeded $14.5 billion within few hours of the issuance announcement, which helped lower the yields by 45 basis points compared with the initial price guidance, the ministry said.

It described the 40-year bond as “the longest international bond in the Middle East and North Africa”.

Egypt has a difficult foreign-debt repayment schedule for the next two years and is trying to expand its investor base, extend its maturity and borrow at lower interest rates.

The country’s foreign debt stood at $108.7 billion at the end of June, up 17.3% year-on-year.

Australia and others ask for Brexit trade compensation

Countries including Australia have asked for trade compensation from the UK and the EU over Brexit disruption.

Fifteen countries, including the US, India and New Zealand, have been setting out Brexit concerns at a World Trade Organization (WTO) meeting in Geneva.

Australian officials said their beef and lamb exporters had already been hit after several Brexit delays.

Brazil said Brexit plans for Northern Ireland could breach WTO rules.

The main issue for the fifteen countries is a system which allows them easier access to the EU's large market for limited quantities of some of their goods, mainly farm produce.

It's a system known as "tariff rate quotas".

World Trade Organization members generally apply tariffs - taxes on imports - to many of the goods they buy from abroad.

For some products they have made commitments to allow specified amounts to be imported with tariffs that are lower than what they usually apply. In some cases the reduced tariff is zero.

It makes it more profitable for Australian farmers to sell beef to Europe, for example.

Brexit complicates this.

The current quotas are for the whole of the EU, the UK included.

Brexit means the UK and the EU have to decide how to divide them up.

Some countries say that could lead to them having less of the favourable access than they currently have to what is a large and wealthy market.

Brexit: What is the 'no deal' WTO option?

WTO warns trade wars threaten living standards and jobs

Australia said that the UK and EU had proposed different ways of allocating the quotas that would add up to less access than Australian exporters currently have.

The US argued that it could end up with no access at reduced tariffs for pizza cheese to the UK or grape juice to the EU.

Another concern is that the UK and EU might themselves end up using part or even all of the other's quota.

The US argued that could severely hit its sales of pork and wine.

Some countries are demanding compensation from the UK and EU. In the WTO that would usually mean reducing tariffs on other goods.

Brexit delays

Australia also argued that it has already been affected by Brexit.

A paper prepared for the meeting said that when Brexit was still scheduled for 31 October, many Australian businesses ceased exports of valuable beef and sheep meat ahead of Christmas because of uncertainty about whether they would be able to make use of these quotas.

The document said similar decisions were taken ahead of a previous possible Brexit dates and will have to be taken again before 31 January.

Demonstrators dressed as customs officials have been protesting against potential Northern Ireland border checks.

Ireland question

Brazil has raised another concern about the plans for customs procedures between Northern Ireland and Great Britain.

Brazilian officials said it could violate the WTO's rules against discrimination.

The documents the BBC has seen don't spell out the reason for this, but it is probably based on the plans to have an open border between Northern Ireland in the UK and the Republic of Ireland in the EU.

Combined with the plans for limited checks on goods between Northern Ireland and the rest of the UK, it might provide an opportunity for goods to travel between the UK and EU without restrictions or possibly tariffs that would apply to similar goods from the rest of the world.

Brazilian officials said it was paramount that the WTO's non-discrimination principle is preserved.

It was not clear, they argued, that the proposed arrangements for Northern Ireland would guarantee that would happen.--BBC

European Investment Bank drops fossil fuel funding

The European Union is to stop funding oil, gas and coal projects at the end of 2021, cutting €2bn (£1.7bn) of yearly investments.

The European Investment Bank (EIB), the EU's financing department, will bar funding for most fossil fuel projects.

The ban will come into effect a year later than originally proposed after lobbying by EU member states.

Since 2013, the EIB has funded €13.4bn of fossil fuel projects.

Last year it funded about €2bn worth of projects.

Under the new policy, energy projects applying for EIB funding will need to show they can produce one kilowatt hour of energy while emitting less than 250 grams of carbon dioxide, a move which excludes traditional gas-burning power plants.

Gas projects are still possible, but would have to be based on what the bank called "new technologies" such as carbon capture and storage, combining heat and power generation, or mixing in renewable gases with the fossil natural gas.

EU should drop oil, gas and coal funding, say ministers

Extinction Rebellion: Granddad risking jail for grandson's future

Andrew McDowell, the EIB's vice-president responsible for energy, said: "This is an important first step - this is not the last step."

Gas projects are fairly common in EU member states as they are seen as a cleaner alternative to coal and oil as countries transition away from using fossil fuels.

Environmental organisations welcomed the EIB decision, but said they were disappointed at the one-year delay.

"Hats off to the European Investment Bank and those countries who fought hard to help it set a global benchmark today," said Sebastien Godinot, an economist at the World Wildlife Fund.

Lobbying

The EIB's decision comes after EU finance ministers last week unanimously backed the phasing out of funding of fossil fuel projects to help combat climate change.

A decision on funding was planned last month, but was postponed due to divisions within the bloc as some countries wanted gas funding to continue.

This prompted Mr McDowell to write a letter to the bank's current 28 shareholders, the EU member states, on 5 November, suggesting pushing back the originally proposed end of fossil fuel lending from the end of 2020 to end of 2021, something the European Commission has lobbied for.

The EIB has ambitious goals on sustainable finance. Mr McDowell said the bank wants to "set the standard" for what it meant for banks to be aligned with the Paris climate agreement.

Protests against fossil fuels have intensified in recent years, with activists from groups such as Extinction Rebellion demanding governments take urgent action to slash carbon emissions and halt biodiversity loss.--BBC

Mercedes-Benz to cut jobs amid tougher emissions rules

Luxury carmaker Mercedes-Benz is to cut jobs with the aim of making more than €1bn (£840m) in savings by the end of 2022, its owner Daimler has said.

The cuts - which reports say will lead to more than 1,000 jobs being lost - come as the carmaker faces challenges from new, tougher emissions targets.

Daimler said that meeting new CO2 targets required "high investments".

It added that "the growing range of plug-in hybrids and all-electric cars is leading to cost increases".

Daimler, which aims to make savings of more than €1.5bn across its group, did not say where the job cuts would fall. But they are expected to be in management and administrative roles.

"The cost burdens of meeting the [carbon dioxide] CO2 targets require comprehensive measures to increase efficiency in all areas of our company," said Ola Källenius, chairman of the board of management of Daimler and Mercedes-Benz.

"This also includes the streamlining of our processes and structures."

He added: "This will weigh on our results in 2020 and 2021. To be successful in the future, we must therefore act now and significantly increase our financial strength."

It's hardly surprising that Daimler is doing some urgent belt-tightening.

Profits have been poor lately, and costs have been high. There's been the small matter of an €870m fine linked to the diesel emissions scandal, for example - not to mention the impact of an extended recall to deal with potentially faulty airbags.

At the same time, the company is bracing itself for the impact of strict new European emissions regulations, which will be phased in from next year. These will effectively force manufacturers to sell far more low or zero-emission cars than they do today - or face steep fines.

But developing electric cars is an expensive process, while selling them is not particularly profitable, at least not yet. So something has to give - and right now chief executive Ola Källenius clearly feels that Daimler needs more investment - and can afford a little bit less management.

New targets

All carmakers are facing the challenge of selling more low or zero-emission models in order to meet new European Union standards.

Under these rules, average CO2 emissions from new cars sold in the EU must fall to 95g of CO2 per kilometre by 2021, a 40% cut from levels in 2007.

In addition, emissions must then be cut by a further 37.5% between 2021 and 2030.

In addition to the cost cuts at Mercedes-Benz cars, Daimler said that the Mercedes-Benz Vans division would seek to cut personnel costs by €100m.

Daimler's truck business is also planning to cut variable costs by €250m and personnel costs by €300m by the end of 2022.--BBC

Nike to stop direct sales through Amazon

Sportswear retailer Nike is to stop sales through Amazon so it can focus on selling directly to customers.

Nike said it would continue to invest in "distinctive" partnerships with other retailers and platforms.

It marks the end of a pilot that Nike began with Amazon in 2017.

According to Bloomberg, Amazon has been preparing for the move, recruiting third-party sellers with Nike products so that the merchandise is still available on the site.

Analysts said it was a sign that Nike was seeking greater control of its brand.

Nike said: "As part of Nike's focus on elevating consumer experiences through more direct, personal relationships, we have made the decision to complete our current pilot with Amazon Retail.

Rare Nike trainers sell for more than £350,000

"We will continue to invest in strong, distinctive partnerships for Nike with other retailers and platforms to seamlessly serve our consumers globally.

"We will continue to partner with Amazon Web Services to power a suite of services on Nike.com and within Nike's ecosystem of apps."

Maureen Hinton, retail research director at Global Data, said: "It's a case of Nike wanting complete control of its brand".

She said customers using Amazon often had the impression they were getting a discounted price.

However, while not many retailers could resist using Amazon, Nike was a "huge global brand and sports brands have a huge amount of power".

Amazon declined to comment.--BBC

Google set to offer banking current accounts

Google has become the latest big tech firm to move into banking by offering current accounts.

The firm said it plans to partner with banks and credit unions in the US to offer the "smart checking" accounts.

It said the service, to be launched via Google Pay, will allow users to add Google's analytic tools to traditional banking products.

The move follows offerings of credit cards, payment systems and loans by Facebook, Uber, Apple and Amazon.

While the products and arrangements differ, the tech giants entering the world of banking share an underlying motive: making themselves indispensable, says Gerard du Toit, a partner at the Bain & Co consulting firm.

"They're all competing for consumer attention and for their ecosystem and platform to win," he says.

Amazon's credit card and business loans are aimed at boosting its e-commerce business, while Uber Money is providing credit cards, debit accounts and money tracking tools to serve the company's taxi operations.

Facebook has said its Facebook Pay service will complement its messaging tools.

And both Google and Apple, which has teamed up with Goldman Sachs' new consumer arm, Marcus, on a credit card as part of its Apple Pay and Wallet service, want to to make iPhones and Androids essential.

Wading into financial services will also provide Google and Facebook information for their advertising business, helping to track what ads lead to purchases, Mr du Toit said.

The moves into banking are likely to add to the debates over the tech giants, which are already facing probes related to competition, data protection and privacy.

Some officials have also expressed worry about gaps in financial oversight as growing activity occurs outside of traditional banking. And in recent days, New York announced it would investigate Apple, after accusations that its credit card relied on "sexist" algorithms.

Mr du Toit said regulatory concerns represent the "fly in the soup" for tech firms.

"They will have to be very careful," he said.

Partnerships

In many cases, the tech firms are working with traditional banks - a sign they are aware of the potential issues, he said.

Google said its US partners, which reportedly include Citigroup, would start to offer the accounts by 2020.

"We believe our partners' regulatory and financial know-how is a great complement to our experience in building helpful tools and technology for our users," it said in a statement.

Amazon has offered small business loans since 2011 and launched its credit card with JP Morgan Chase in 2017.

But in some ways, the flurry of announcements by companies this year, is a sign that the US is late to the party.

In China and some other countries, the tech firms moved quickly into banking, motivated by the need to fill the gaps left by traditional finance industry that created hurdles for their businesses, whether they were e-commerce firms or food delivery companies.

In the US, however, the need was less pressing, thanks in part to the ubiquity of credit cards and other "good enough solutions", Mr du Toit said.

Big tech payment services provided by the likes of Alibaba's Ant Financial and Tencent's WeChat account for roughly 16% of China's GDP, compared to less than 1% in the US, according to the Bank for International Settlements, an organisation backed by 60 of the world's central banks.

Chat and pay: How social media is beating the banks

Is old tech putting banks under threat of extinction?

Tech companies "are now increasingly getting into it because they do believe they can offer a materially better solution to customers," he said.

Last month, Facebook chief executive Mark Zuckerberg evoked the threat of Chinese competition while defending his firm's interest in developing a cryptocurrency before Congress last month.

"I view the financial infrastructure in the US as outdated," he said.

'Darwinian experiment'

As the tech companies start to make use of their massive reach, close customer relationships and giant data sets, banks "have woken up" to the threat, leading to collaborations and other uneasy "frenemy" arrangements, Mr du Toit said.

With tech firms moving beyond credit cards, regional banks will get left behind, while smaller financial technology firms are forced out or acquired, Mr du Toit said.

"I sometimes describe this as a giant Darwinian experiment of different couplings of the banks and the big techs," he says. "There will be some mutations that succeed and others that fail."

While Google's earlier efforts to build up Google Pay failed to gain much traction in the US, the firm has developed significant payment business in India, where a Bain & Co survey found that more than half of respondents had used the platform in the last 12 months.

"I would not count them out," Mr du Toit said.--BBC

Fed Not Focused on Daily Ups, Downs of Trade Deal: Williams

SAN FRANCISCO — The U.S. Federal Reserve will not make policy based on day to day developments in U.S.-China trade policy or on Britain's exit from the European Union, a U.S. central banker said on Thursday, in part because businesses do not make their decisions that way either.

"For me, it's not about the ups and downs on a given day, or even within a given day, around negotiations whether on trade, or on Brexit or anything else, because those tend to move around quite a bit," New York Fed President John Williams said at a conference on monetary policy and global uncertainty at the San Francisco Fed.

Monetary policy can take a year to work its way into the economy, he said, so the Fed has to take a longer view.

"Even if there’s some kind of resolution on a particular issue, I think this uncertainty factor, which we are hearing from everywhere from business people across the country, that’s unlikely to turn on a dime," he said.

"It’s going to require some time of people thinking they have certainty around the trade environment, around the geopolitical environment, so they can make those longer-term business decisions."--newyorktimes

INVESTORS DIARY 2019

Company

Event

Venue

Date & Time

Companies under Cautionary

Bindura Nickel Corporation

Padenga Holdings

Delta Corporation

Meikles Limited

 <mailto:info at bulls.co.zw> 

DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of Faith Capital (Pvt) Ltd for general information purposes only and does not constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities. The information contained in this report has been compiled from sources believed to be reliable, but no representation or warranty is made or guarantee given as to its accuracy or completeness. All opinions expressed and recommendations made are subject to change without notice. Securities or financial instruments mentioned herein may not be suitable for all investors. Securities of emerging and mid-size growth companies typically involve a higher degree of risk and more volatility than the securities of more established companies. Neither Faith Capital nor any other member of Bulls ‘n Bears nor any other person, accepts any liability whatsoever for any loss howsoever arising from any use of this report or its contents or otherwise arising in connection therewith. Recipients of this report shall be solely responsible for making their own independent investigation into the business, financial condition and future prospects of any companies referred to in this report. Other  Indices quoted herein are for guideline purposes only and sourced from third parties.

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