Major International Business Headlines Brief::: 27 November 2019

Tue Nov 26 23:36:16 CAT 2019

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Major International Business Headlines Brief::: 27 November 2019

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*  Nigeria holds rates after border closures spur inflation

*  Kenyan lenders to shun "wild west banditry", central banker says

*  South Africa at risk if economic reforms don't materialise fast - IMF

*  Tanzania secures $1 bln syndicated loan from TDB bank for infrastructure

*  South African farmers expected to harvest slightly more maize than previous estimate

*  Glencore's Mutanda mine in Congo shuts down a month early

*  Vedanta warns it may have to process ore outside South Africa

*  Kenya central bank cuts loan rate for first time in over a year

*  South African rand clings to gains despite slowdown worries

*  Checkers supermarket promises to deliver groceries in an hour

*  Audi to cut 9,500 jobs to fund electric car push

*  Amazon shoe 'strikingly similar' to Allbirds model

*  Brexit: 'Only an ambitious trade deal can protect car jobs'

*  Alibaba shares jump in blockbuster Hong Kong debut

*  UK banknote printer De La Rue fears for its future

*  Huawei: Trouble overseas but boom time in China

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Nigeria holds rates after border closures spur inflation

ABUJA (Reuters) - The Nigerian central bank left its benchmark lending rate on hold at 13.5% on Tuesday, after a government decision to close borders with neighbouring countries sent inflation to a 17-month high last month.

Central bank Governor Godwin Emefiele told a news conference in the capital Abuja that the decision by the bank’s monetary policy committee (MPC) was unanimous.

He said the impact of the border closures on prices was “reactionary and temporary” and that the medium-term benefits of the government’s decision outweighed the short-term costs.

Emefiele said he would advise the government to maintain the closures in the interests of boosting economic output, which has been recovering relatively slowly in the non-oil sector.

“In view of the uptick in inflationary pressures, (the MPC) decided that the balance of risks was in favour of protecting price stability,” Emefiele said, after data last week showed inflation hit 11.6% in October.

Emefiele said a central bank decision to set a minimum loan-to-deposit ratio for lenders had helped lift economic growth to almost 2.3% in the third quarter, adding that the policy must be sustained as it had led to a drop in interest rates.

Some banks have been caught out by the initiative, incurring penalties from the central bank.

The majority of economists polled by Reuters last week predicted that the MPC would keep the lending rate on hold in Africa’s largest economy and top crude oil producer.

The central bank has been trying to boost growth by encouraging commercial banks to lend, but it has also kept interest rates high and liquidity tight to support the currency.

The bank forecasts economic growth of 2.2% this year, while the International Monetary Fund expects growth of around 2.3%.

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Kenyan lenders to shun "wild west banditry", central banker says

NAIROBI (Reuters) - Kenyan banks will not return to the “wild west kind of banditry” after a cap on commercial lending rates was lifted this month, the governor of the central bank said on Tuesday.

The government abandoned the cap, which was imposed in 2016, after it was blamed for curbing private-sector credit growth and reducing the effectiveness of monetary policy.

Lawmakers shielded existing loans from any increases in rates when they removed the cap. Consumers have still expressed concern that banks will return to uncontrollably high lending rates, which ranged from 18% to 27% and pumped up bank earnings.

“They are not going back to same old, same old ways of the past, the wild west kind of banditry,” Patrick Njoroge told a news conference.

Lenders have promised not to jerk up rates dramatically, saying the economic conditions do not warrant charging very high rates of more than 18% or so.

“Banks will abide by the law,” Joshua Oigara, the chairman of the Kenya Bankers Association, said in a statement issued earlier this month after the cap was removed.

In February, the industry adopted a new banking charter, which requires lenders to be transparent and to be guided by a customer’s risk profile while pricing credit, Njoroge said.

“They need to be more ethical. They should stay away from short-term gains; the focus on ... this quarter’s returns, what is my bonus?,” Njoroge said.

Banks used to charge the bulk of their customers a flat rate, only offering discounts to the most liquid blue-chip companies, stoking consumer anger and bringing about the cap on rates.

They did not also consider a customer’s positive credit history in pricing loans, only acting on the information when it was negative to deny loans.

Policymakers cut the benchmark lending rate for the first time in more than a year on Monday, saying a tightening stance by the Treasury had created room for easing. [nL8N2853DI]

The economy is expected to grow by 5.9% this year compared with 6.3% last year, Njoroge said.

South Africa at risk if economic reforms don't materialise fast - IMF

JOHANNESBURG (Reuters) - South Africa faces a prolonged period of weak economic growth marked by rising unemployment, inequality and greater credit-rating risk if the government does not act fast to implement reforms, the International Monetary Fund (IMF) said on Monday.

“The FY20/21 budget to be presented in February should articulate measures to address fiscal and SOE challenges and stabilize government debt,” the global lender said in statement at the conclusion of a 2-week, Article IV visit to the country.

“Failure to implement the needed adjustment in government and SOE (state-owned entities) spending and efficiency will worsen debt dynamics, erode financial stability, and further raise the country risk premium.”

Tanzania secures $1 bln syndicated loan from TDB bank for infrastructure

DAR ES SALAAM (Reuters) - Tanzania has received a $1 billion syndicated loan arranged by the Trade and Development Bank for infrastructure projects and is seeking an additional $500 million from the regional lender, the presidency said.

The government said in 2016 it had agreed a $7.6 billion loan from China’s Export-Import Bank (Exim) to build a railway line that will link it to neighbours, but the funds were never disbursed. No reasons were given by authorities.

“TDB has issued a $1 billion soft loan to the country and is now finalising procedures for releasing other additional loans worth $500 million for implementation of various development projects,” the presidency said in a statement late on Monday.

East Africa’s third biggest economy wants to profit from its long coastline and upgrade rickety railways and roads to serve growing economies in the wider East and Central Africa region.

Admassu Tadesse, TDB’s chief executive, said the bank was in discussion with the Tanzanian government for additional loans worth “hundreds of millions of dollars” to finance infrastructure projects, including a new railway.

“We underwrote $500 million of that $1 billion and the other $500 million was mobilised and raised through some of our partners,” said Tadesse after meeting Tanzania’s president.

“There is more on the table right now. We’ll be putting in several hundred million going forward.”

In total, Tanzania wants to spend $14.2 billion over the next five years to build a 2,561 km (1,591 mile) standard gauge railway network connecting its main Indian Ocean port of Dar es Salaam to its hinterland.

Tadesse said the high-speed electric rail network that Tanzania is building is expected to boost trade with landlocked neighbours in the region.

The TDB institution is owned by regional states and other shareholders.

South African farmers expected to harvest slightly more maize than previous estimate

JOHANNESBURG (Reuters) - South Africa’s 2018/2019 maize crop is expected to be slightly higher than the previous estimate, boosted by higher yellow maize yields in the Free State and Mpumalanga provinces, the Crop Estimates Committee (CEC) said on Tuesday.

The CEC, which gave its tenth and final estimate for the season, estimated maize production at 11.258 million tonnes compared with the October estimate of 11.186 million tonnes.

The crop is expected to consist of 5.719 million tonnes yellow maize, used mainly in animal feed and 5.538 million tonnes of the staple white maize.

This figure is lower than the 12.244 million tonnes predicted in a Reuters survey.

The latest CEC estimate is 10.54% lower than the 12.510 million tonnes harvested in the 2017/2018 season after dry weather conditions delayed plantings and impacted yields.

Glencore's Mutanda mine in Congo shuts down a month early

GOMA (Reuters) - Glencore’s Mutanda mine in Democratic Republic of Congo has suspended operations prematurely due to difficulties procuring sulphuric acid, a key input for copper and cobalt extraction, its Mutanda Mining subsidiary told employees in a letter on Monday.

The suspension, effective from Monday, comes more than a month before the world’s biggest cobalt mine was set to go into care and maintenance. Glencore had announced in August it would suspend the mine from year-end, for two years.

“Mutanda Mining is forced to halt extraction and treatment of copper and cobalt earlier than planned due to difficulties in procuring acid,” the letter from management, dated Nov. 25 and seen by Reuters on Tuesday, said.

A Glencore spokesman confirmed the letter’s contents.

Vedanta warns it may have to process ore outside South Africa

LONDON (Reuters) - Vedanta, one of South Africa’s biggest international investors, will process its zinc ore elsewhere unless the country can fix its power problems, the CEO of Vedanta unit Vedanta Zinc International said.

A bird flies past the logo of Vedanta installed on the facade of its headquarters in Mumbai, India January 31, 2018. REUTERS/Danish Siddiqui/File Photo

South Africa has suffered rolling blackouts and the debts of state power company Eskom have sapped the country’s economy.

The utility’s problems also risk scuppering South Africa’s goal of encouraging processing from mining operations to maximise revenues and jobs.

Deshnee Naidoo, the CEO of Vedanta Zinc International (VZI), which has operations in South Africa and Namibia, said she was concerned a solution might not be possible.

“If we can’t make it work here, we will have to look at other geographies,” Naidoo said in an interview on the sidelines of the London Mines and Money conference. “My concern is about government’s ability to deliver power.”

Just under a year ago, Naidoo said there was excess power capacity to help fuel a boom in the Northern Cape, which she described as one of the world’s most exciting zinc districts.

The government is encouraging miners to build their own generation and supply any surplus to the South African grid.

But Naidoo said there was a problem with a lack of regulation for hybrid power, which she said was necessary because energy-intensive miners need fossil fuel to provide baseload and cannot rely solely on wind and solar.

VZI’s power needs are mostly for processing ore from its Gamsberg mine, whose capacity it wants to double to 8 million tonnes per year.

One option could be to refine ore from Gamsberg in Namibia, but that would require the processor there to be adapted, Naidoo said.

In Namibia, Vedanta’s Skorpion mine will close in 2021 and is on four months of extended maintenance from October following technical problems.

Naidoo said that when output resumed, it would be around 10,000 tonnes a month until September 2021 when the site will be put into extended care and maintenance as the mine will be exhausted.

Zinc, mainly used for galvanising steel, has fallen nearly 7% this year. Vedanta’s share price has fallen around 27% as it battled an array of issues.

In Zambia, it has been locked in a dispute with the government since May, when Lusaka appointed a liquidator to run Konkola Copper Mines — 20% owned by Zambia’s state mining company ZCCM-IH and the rest by Vedanta.

Zambia accused KCM of breaching the terms of its licence, an accusation the company has denied.

Kenya central bank cuts loan rate for first time in over a year

NAIROBI (Reuters) - Kenya’s central bank cut its benchmark lending rate for the first time in more than a year on Monday, saying tightening fiscal policy had provided room to ease in an effort to coax an economy operating below its potential.

The bank’s Monetary Policy Committee cut the rate by 50 basis points to 8.50%, in its first meeting since the East African nation lifted a cap on commercial interest rates that it said had stifled credit growth and held back the economy.

Policymakers had held the benchmark rate for seven straight times before Monday’s cut.

“The Committee noted the ongoing tightening of fiscal policy and concluded there was room for accommodative monetary policy to support economic activity,” the bank said.

Eight analysts polled by Reuters had expected policymakers to keep the benchmark rate at 9.0%, where it has been since the end of July 2018. Four had forecast a cut.

“I think the MPC was largely emboldened by the repeal of the interest rate capping law,” Jibran Qureishi, economist for East Africa at Stanbic Bank, said after the rate decision.

Governor Patrick Njoroge told Reuters earlier this month the scrapping of the interest rate cap had removed one of the concerns the central bank had about cutting the benchmark.

“This reform should restore the clarity of monetary policy decisions and strengthen the transmission of monetary policy,” the bank said on Monday.

In mid-November, the finance ministry sent a supplementary budget to parliament that sees the fiscal deficit at 6.3% of GDP in financial year 2019-20, which began in July, up from an earlier target of 5.9%.

Inflation rose to 4.95% year-on-year in October from 3.83% a month earlier.

Razia Khan, head of research for Africa at Standard Chartered Bank, said there was little room for more monetary easing with inflation likely to rise before the end of 2020.

“With inflation likely to pick up ... and in line with revived economic activity in Kenya, there may not be much room for the CBK to ease a lot more on a sustained basis,” Khan said.

Private sector credit grew by 6.6% in the 12 months to October, compared with 7.0% in September, the central bank said.

The bank said it expects the current account deficit to narrow to 4.3% of GDP this year, from 5.0% a year earlier.

South African rand clings to gains despite slowdown worries

JOHANNESBURG (Reuters) - South Africa’s rand firmed on Tuesday, defying a stronger U.S. dollar and a warning from the International Monetary Fund (IMF) about the country’s worsening fiscal position as investors continued to see value in the local currency’s real yield.

As of 0615 GMT, the rand was trading 0.2% firmer at 14.7550 per dollar. The currency came off a two-day losing streak that saw it spike to 14.7930 following S&P Global’s credit ratings review, which signalled the danger of low economic growth and rising debt.

Continued uncertainty over a trade agreement between China and the United States has also put the currency on the skids.

On Tuesday, investors saw a greater likelihood of a deal being agreed by the two leading economies by year-end, following a telephone call between top negotiators, news that lifted the greenback and the Chinese yuan.

A warning from the IMF that the country faced a prolonged period of weak growth if government did not implement promised reforms quickly, especially a turnaround of cash-strapped power utility Eskom, spooked the debt market while the rand held firm.

Traders said the currency’s resilience was down to the attractive yield due to relatively high interest rates after the central bank held fire on an expected cut last week despite inflation dipping to an eight-year trough.

Bonds continue to weaken, with the yield on the benchmark paper due in 2026 adding 1 basis point to the previous session’s 7.5 bps increase, trading at 8.475%.

Checkers supermarket promises to deliver groceries in an hour

JOHANNESBURG (Reuters) - South African supermarket chain Checkers, owned by Shoprite Holdings, is looking to grab a larger share of the growing online shopping market by pioneering a new one-hour grocery delivery service named Sixty60.

It is South Africa’s first 60-minute mobile app grocery delivery service from a supermarket chain, Checkers says, as it looks to respond to customers’ demands for convenience.

“In our time-pressed society, providing consumers with a swift, on-demand grocery delivery service is like giving them back time: today’s most precious commodity,” Neil Schreuder, Chief of Innovation and Strategy at Shoprite Checkers said in a statement on Monday.

The mobile app delivers groceries and drinks at the touch of a button where customers order in 60 seconds and have them delivered in as little as 60 minutes, Schreuder added.

Sixty60 is currently available to the public in selected Checkers stores in the Western Cape and Gauteng provinces.

Checkers has been upgrading its stores and introducing premium, healthy brands and high-end convenience foods in order to compete in the more upmarket, higher-margin niche dominated by rival Woolworths.

Online retailing in South Africa is still in its infancy by global standards, according to Euromonitor International, however, over the recent years brick-and-mortar retailers have been increasingly pumping money into technology and logistics to adapt to the changing landscape of retail.

According to a report by World Wide Worx local online retail is due to pass the 14 billion rand ($952 million) mark this year, to reach 1.4% of South Africa’s total retail sales.

The online shopping sector in South Africa is dominated by apparel, homeware, electronics and appliances and ticket retailing.

Online shopping for groceries is still in its early stages in the country, with only Woolworths and grocery retailer Pick n Pay offering the service.

($1 = 14.7075 rand)

Audi to cut 9,500 jobs to fund electric car push

Carmaker Audi is to cut 9,500 of its 61,000 jobs in Germany between now and 2025 to make more money available for electric vehicles and digital working.

The cuts - which aim to save €6bn (£5.1bn) - will be achieved through an early retirement programme.

But the Volkswagen-owned firm also said its move into electric cars would mean the creation of up to 2,000 jobs.

It comes less than a fortnight after Daimler said it would cut more than 1,000 jobs by the end of 2022.

The car industry is facing a downturn in key markets, including China, as well as increased costs as it meets tougher European Union emissions regulations and the costly switch to electric vehicles. Audi saw falling sales, revenues and operating profits in the first nine months of 2019.

In a statement, the carmaker said the job cuts would "take place along the demographic curve - in particular through employee turnover and a new, attractive early retirement programme".

"The company must become lean and fit for the future, which means that some job profiles will no longer be needed and new ones will be created."

The carmaker said it would guarantee the jobs of operational workers until 2029.

It added that it would continue to train young people and maintain its number of apprentices and student trainees over the next three years. Speaking about the extension of the job guarantee for the workforce, spokesman Peter Mosch said: "We have reached an important milestone.

"The jobs of our core workforce are secure. The extension of the employment guarantee is a great success in difficult times. In addition, the upcoming electrification of the Ingolstadt and Neckarsulm plants. underscores the long-term success of both German sites."

Like its rivals, Audi is spending billions of euros on new technologies, including battery-electric and hybrid vehicles, connectivity and autonomous driving. But the firm last year also had to pay an €800m fine over its role in the "dieselgate" emissions scandal scandal that started at parent company VW.

It is not just German carmakers that are facing sluggish growth. Car parts suppliers Bosch and Continental have announced thousands of job cuts. And it comes against the wider backdrop of a slowing German economy, which has narrowly avoided a recession.

Audi has sailed through some stormy seas over the past few years, but now it's setting its sights on a new horizon.

The upmarket VW Group brand was at the heart of the diesel emissions cheating scandal, which erupted in 2015. Its former chief executive, Rupert Stadler, has been charged with fraud over his alleged role in the affair.

Now, like its parent, Audi is focusing on the future - and working flat out to develop electric cars.

It has already launched the E-tron, the first of 20 battery-powered models due to appear by 2025. But developing electric cars that people actually want to drive costs money.

No surprise then that Audi is trying to streamline its operations and slim down its workforce.

Competition in the electric car market is heating up rapidly. Within the next few years we could even see a battle for survival among the traditional mainstream carmakers, as they adapt to what will soon become a very different environment.

Being lean could be a big advantage.--BBC

Amazon shoe 'strikingly similar' to Allbirds model

Amazon has been accused of creating a shoe "strikingly similar" to one designed by environmentally-friendly footwear manufacturer Allbirds.

The shoe firm's founders, Tim Brown and Joey Zwillinger, have written an open letter to Amazon boss Jeff Bezos.

They said Allbirds was "flattered" at the similarities between the products and offered to help make Amazon's shoes "match our approach to sustainability".

Amazon has denied infringing the US firm's designs.

Allbirds woollen trainers have become trendy among celebrities, with Oprah Winfrey, Matthew McConaughey, Courteney Cox and Gwyneth Paltrow all having reportedly been seen wearing them.

The firm says its shoes' carbon footprint is 60% smaller than typical synthetic shoes and that it uses less material in its packaging.

The shoes that sparked the row are Amazon's 206 Collective wool blend sneakers, which Allbirds says are similar to its wool runners.

Allbirds' shoes are made from New Zealand merino wool, whereas Amazon's shoes - which are for sale on its US website - are about half the price and made from a mixture of wool, polyester, nylon and viscose.

The BBC has contacted Amazon for a comment, but last week the e-commerce giant told Business Insider: "Offering products inspired by the trends to which customers are responding is a common practice across the retail industry. 206 Collective's wool blend sneakers don't infringe on Allbirds' design.

"This aesthetic isn't limited to Allbirds, and similar products are also offered by several other brands."

Allbirds was founded by Mr Zwillinger and Mr Brown in 2014. The firm is now reportedly valued at more than $1bn (£777m) and has entered the British market by opening a store in London's Covent Garden.

In their letter to Mr Bezos, posted on the Medium website, Mr Zwillinger and Mr Brown said: "As we've done with over 100 other brands who were interested in implementing our renewable materials into their products, including direct competitors, we want to give you the components that would make this shoe not just look like ours, but also match our approach to sustainability.

"In partnership with Braskem, we successfully created the world's first green EVA - a sustainable version of the foam used on the bottoms of sneakers (including yours), and one of the industry's most ubiquitous materials.

"After all this work, we decided to give it away. You can use it. We want you to use it.

"Customers value companies that are mindful of the planet and profits, and we believe the most powerful businesses in the world, such as Amazon, should lead on these issues, and will be rewarded for doing so.

"Please steal our approach to sustainability."

Allbirds has committed to being a carbon neutral company across its whole supply chain.

On its website, it says: "Starting this year, for every tonne of carbon we emit as a business, we'll pay to take a tonne of carbon out of the atmosphere."--BBBC

Brexit: 'Only an ambitious trade deal can protect car jobs'

UK car production could be cut by more than a third if the UK withdraws from the EU without an "ambitious" trade deal, an industry body has warned.

Analysis commissioned by the Society of Motor Manufacturers and Traders (SMMT) predicts that falling back on World Trade Organisation (WTO) rules would add £3.2bn a year to car making costs.

Car prices would rise and annual output could fall to as little as one million by 2024, the data by AutoAnalysis said.

The UK made 1.52 million cars in 2018.

SMMT chief executive Mike Hawes said falling back on WTO rules for imported components and car exports would result in a level of cost increases that the industry would not be able to absorb without prices rises and production cuts.

He used the body's annual dinner on Tuesday to call for an "ambitious, world-beating Brexit trade deal to maintain the sector's competitiveness and ability to deliver innovation, productivity and prosperity for Britain".

Car industry gloom as UK production falls further

Mr Hawes said the industry needs "frictionless trade free of tariffs, with regulatory alignment and continued access to talent".

He went on: "A close trading relationship is essential to unlock investment so we can deliver our goals: cleaner air, zero carbon emissions, and the ability to go on building our products and marketing them globally.

"Rather than producing two million cars a year by 2020, a no trade deal, WTO tariff worst case scenario could see us making just a million," he said.

UK car production has already seen its weakest first nine months of a year since 2011, falling by 15.6% year-on-year. Mr Hawes said automotive was one of the UK's most valuable economic assets, directly responsible for putting food on the tables of 168,000 British workers and their families.

"The next government must deliver the ambition, the competitive business environment and the commitment needed to keep automotive in Britain," he said.--BBC

Alibaba shares jump in blockbuster Hong Kong debut

Shares in Chinese e-commerce giant Alibaba have surged in its Hong Kong trading debut in one of the year's most anticipated stock offerings.

The firm, which is already traded in the US, raised around $11.3bn (£8.8bn) in its secondary listing.

At the launch, Chairman Daniel Zhang cheered Alibaba's return to Hong Kong.

The move is seen as a boost for the city amid fears long-running protests have tarnished its reputation as a financial hub.

In opening moves on Hong Kong's Hang Seng Index on Tuesday, Alibaba's stock jumped more than 6%.

The company was met with strong appetite for its shares, priced at HK$176 each.

Mr Zhang struck the gong at the ceremony at the city's exchange and welcomed the firm's return "home" to Hong Kong.

He was joined by the territory's Financial Secretary Paul Chan and former Hong Kong chief executive Tung Chee-hwa.

The Hangzhou-based firm had originally considered a Hong Kong initial public offering (IPO) in 2013, but opted for New York after failing to secure regulatory approval in the Asian territory.

Why Alibaba is listing in Hong Kong now

Alibaba Singles' Day shopping frenzy breaks record

Over the years, Alibaba has grown from an online marketplace into an e-commerce giant with interests ranging from financial services to artificial intelligence.

Ahead of its Hong Kong debut, the company said the listing would allow investors across Asia to "participate in Alibaba's growth," as it seeks to tap "substantial new capital pools" in the region.

Image copyrightGETTY IMAGES

Image caption

Alibaba has been listed in New York since 2014

The share sale has knocked Uber off the top spot as this year's biggest IPO, according to Dealogic data. The ride-sharing firm raised $8.1bn in its New York float in May.

Protests weigh on economy

The move to go ahead with the Hong Kong listing comes after Alibaba delayed plans to do so earlier this year, amid ongoing unrest and the US-China trade war.

The long-running protests have hurt the economy, which has fallen into recession, and knocked business confidence in the city.

The protests started in June against plans to allow extradition to the mainland - which many feared would erode the city's freedoms.

Hong Kong is part of China, but as a former British colony it has some autonomy and people have more rights.

A quick guide to the Hong Kong protests

While the extradition plans were withdrawn in September, the demonstrations have continued, with protesters calling for an independent inquiry into alleged police brutality, and democratic reform.--BBC

UK banknote printer De La Rue fears for its future

De La Rue, the company that prints the UK's banknotes, has said there is a risk that the firm will collapse if its turnaround plan fails to work.

The announcement came as it suspended its dividend and reported a loss in the first half of its financial year.

De La Rue said its warning was based on a worst-case scenario.

However, it concluded that there was "a material uncertainty that casts significant doubt on the group's ability to operate as a going concern".

UK-based De La Rue prints cash for about 140 central banks and employs more than 2,500 people globally.

All current Bank of England banknotes are printed by the firm at a site in Debden, Essex.

It is unclear what would happen if the firm got into difficulties, but it is likely that a rival would take over its Bank of England contract. Its main competitors are all based outside the UK.

The BBC understands that preparations have already been made for the launch of the new £20 note featuring artist JMW Turner, printed by De La Rue, which enters circulation on 20 February next year.

Shares in De la Rue fell 20% on Tuesday morning.

De La Rue has faced some big setbacks in the past two years, including the loss of the post-Brexit UK passport printing contract to a Franco-Dutch firm last year.

In May last year, it had to write off £18m after Venezuela's central bank failed to pay its bills.

The company is also under investigation by the Serious Fraud Office in connection with "suspected corruption" in South Sudan.

It appointed a new chief executive, Clive Vacher, in October as part of a management shake-up.

Around 11% of the 171 billion banknotes issued globally in 2017 were printed by a handful of commercial printers. De La Rue is now the largest of these firms.

It began producing banknotes in 1860, first for Mauritius and then elsewhere. Today it produces enough notes each week that if stacked up would reach the peak of Everest twice.

Its main competitor, German company Giesecke & Devrient, produces notes for roughly 100 central banks, while the Canadian Banknote Company and US-founded Crane Currency are also major players.

'Teetering on the brink'

De La Rue reported a £12.1m pre-tax loss for the six months to 28 September, compared with a £7.1m profit in the same period last year.

In its results statement, the company said it was accelerating its restructuring plan, including a reduction in overhead costs.

It is also planning new banknote security feature products to bolster its position in the "increasingly competitive" banknote market.

"De La Rue is teetering on the brink," said Neil Wilson, chief market analyst for Markets.com.

"Bad management and decisions seems to be the main reason for the malaise."

Investors sometimes wonder whether a company's board of directors can, in the short term, have much sway over a company's trading.

The scepticism is warranted: boards normally comprise a small number of executives and a larger number of non-executive directors, who have no involvement with day-to-day operations, and there are plenty of examples of companies going off the rails without the board suspecting anything was wrong.

Today's results from De La Rue show, however, that boards are vital. The banknote and secure-printing company turned in a disastrous set of numbers - a £10m operating loss, a string of one-off charges and mounting debt - which it blamed on falling demand and too many companies chasing too few contracts.

But it also admits that a period of unprecedented turmoil at the top has not helped, with the chairman, chief executive, finance director and most of the other directors changing in short order.

"The board believes that significant changes in the board and executive teams, along with a restructuring of the business, has contributed to the poor performance of the business in the period," the results statement says.

"This has contributed to a larger variance between forecasts and performance than has been experienced historically."

Management matters, and will matter even more in the next few months. The directors warn that if the revival plan put in place by (newish) chief executive Clive Vacher does not yield results, there is a threat to the company being able to continue as a going concern.

In plain English, that means it will have to find more money, either by renegotiating the terms of its bank loans or by asking shareholders to stump up more cash.--BBC

Huawei: Trouble overseas but boom time in China

More than 20 smartphones, old tablets and other devices lurk in a corner of his Beijing home - an ever-growing tech junkyard.

His apartment also boasts a Google Home smart assistant and an Amazon Echo.

"I take three phones out with me every day. I use a phone for Chinese apps, I use my iPhone for Gmail and western apps, and I use my Google Pixel phone for work," says the 34-year-old tech entrepreneur.

His obsession has paid off though. In 2009, he bought the first phone to use Android, the software that now runs more than 80% of smartphones.

A year later, the physics graduate, founded his own company creating content for Chinese Android users. By 2016 he had sold the company for an undisclosed amount to Alibaba, the Chinese e-commerce giant.

Now he is excited about the next generation of technology, known as 5G. It promises lightning fast internet connections for your mobile phone - fast enough to download movies in a matter of seconds, or to stream high definition TV.

In October, Jun Yu pre-ordered a 5G-ready smartphone, made by China's Xiaomi.

"4G has enabled many things like mobile video, more immersive gaming. I know 5G will too. But I don't exactly know how yet," he says.

But in the US and UK the rollout of 5G networks has been hampered by an international row over one of the most important suppliers of 5G equipment, China's Huawei.

Rivals is a season of in-depth coverage on BBC News about the contest for supremacy between the US and China across trade, tech, defence and soft power.

The US has banned the use of Huawei equipment in 5G networks over security fears, and has encouraged its allies to do the same. It also maintains a tight control over what US companies can sell to Huawei, which has disrupted sales of Huawei phones overseas.

Industry analysts like Edison Lee, an analyst from financial services group Jefferies, see the US pressure on Huawei as an attempt to break China's potential dominance of the global 5G market.

"The tech war is based on America's argument that China's technological advances have been built upon stolen intellectual property rights, and heavy government subsidies, and their belief that Chinese telecom equipment is not safe, and is a national security threat to the US and its allies," he says.

"As Huawei and [fellow Chinese firm] ZTE increasingly dominate the global telecom equipment market, the western world will be more vulnerable to Chinese spying," Lee adds.

Huawei has always strongly denied that its technology can be used for spying.

While western nations worry about one of the key suppliers of 5G technology, China is racing ahead with its 5G rollout.

On 31 October Chinese telecom companies launched 5G services in more than 50 Chinese cities, creating one of the world's largest 5G networks.

Huawei has built an estimated 50% of the network.

The Chinese Ministry of Information claims that in just 20 days the country registered more than 800,000 subscribers. Analysts predict China will have as many as 110 million 5G users by 2020.

And China's tech sector is busy coming up with uses for the new tech.

On a large plot of land in northern Hong Kong, researchers are developing 5G powered autonomous vehicles.

Researchers at Hong Kong Applied Science and Technology Research Institution are working in partnership with China Mobile, the largest telecom company in China.

They see 5G as being particularly useful for self-driving cars, allowing the cars to build an accurate picture of what's going on around them, by communicating with other vehicles, traffic signals and sensors in the road.

"For consumers, 5G will possibly transform how we interact with other. For the government, 5G will transform roads and road infrastructure to enable new applications like enhanced assisted-driving and eventually autonomous driving," says Alex Mui, a researcher on the project.

China is not the first country to roll out 5G. But it is building one of the world's biggest 5G markets very quickly.

While Huawei and ZTE are doing well from that expansion, they would still like to break into lucrative overseas markets like the US.

Speaking at a 5G convention in Beijing in November, China's minister for industry and information accused America of using cybersecurity as an excuse for protectionism.

"No country should ban a company in its 5G network rollout by using the unproved allegations of cybersecurity risks," said Miao Wei.

Industry analysts are not confident that the row between China and the US will be sorted out anytime soon.

"We see the current tensions as a technological Cold War, as tech nationalism intensifies," says Ben Wood, chief of research, at CCS Insight.

"With the Chinese government firmly committed to establishing China as a world-leading 5G nation, the opportunity for Huawei in its home market is immense.

"However, the rest of the world can't afford to get left behind, and without access to Huawei infrastructure US mobile network operators in particular will need to rely on alternative suppliers who may be more expensive and less advanced with 5G."--BBC

INVESTORS DIARY 2019

Company

Event

Venue

Date & Time

Companies under Cautionary

Bindura Nickel Corporation

Padenga Holdings

Delta Corporation

Meikles Limited

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