Major International Business Headlines Brief::: 03 October 2019

[Bulls n' Bears]

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Major International Business Headlines Brief::: 03 October 2019

 


 

 


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*  Kenya finds $71 mln in suspect cash as it retires old notes -cenbank

*  S.Africa to pay more for debt until fiscal problems addressed –central bank

*  African mast operator Helios Towers launches up to $1.8 bln London IPO -source

*  Tunisia plans to issue up to 800 million euros of bonds in 2020

*  Harmony gets new $400 mln credit facility - bank

*  Ethiopian Airlines annual revenue up 29% -govt official

*  Egyptian financial services group Pioneers Holding plans three-way split

*  US set to impose tariffs on $7.5bn of EU exports in Airbus row

*  FTSE 100 suffers biggest drop since early 2016

*  Microsoft bets on foldable, though not bendable, devices

*  Female high flyers start #MeToo-style pay campaign

*  Tesco boss Dave Lewis in shock departure

*  'Flight shame' could halve growth in air traffic

 

 

 

 


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Kenya finds $71 mln in suspect cash as it retires old notes -cenbank

NAIROBI (Reuters) - A Kenyan anti-corruption drive uncovered the equivalent of tens of millions of dollars in unexplained wealth when it retired old banknotes, the central bank said on Wednesday, adding much of the cash appeared to have been gained in “the criminal area”.

 

The East African nation has a diverse, fast-growing economy, but foreign investors have long complained of widespread graft and weak application of anti-money laundering laws.

 

On June 1, the central bank set a Sept. 30 deadline for everyone to convert their old 1,000 shillings note, worth about $10, into new ones after it became the banknote of choice for criminals of all types in the East Africa region.

 

Those exchanging large amounts were required to explain how they acquired the cash. The move was designed to stop the flow of proceeds of crime, like corruption and counterfeiting of bank notes, through the financial sector.

 

Bank governor Patrick Njoroge said notes worth 7.4 billion shillings ($71.29 million) were not exchanged, rendering the cash invalid and hitting the suspected corrupt owners hard.

 

“These are people for the most part that maybe had some concerns in terms of going through the checks,” he told a news conference.

 

The money is equivalent to a quarter of the annual budget of the government’s top hospitals in the country, Njoroge said.

 

It also marks the first time in the country that the corrupt have been made to lose a huge chunk of their wealth, with the biggest ever corruption fine handed out by the courts standing at 52 million shillings, he added.

 

Commercial banks, who processed amounts up to five million shillings, flagged some 3,172 transactions as suspicious and reported them to the authorities during the conversion exercise over the four months.

 

Njoroge said that information will be used by other investigative agencies, including the tax authority, to uncover more cases of handling of proceeds of crime.

 

“You have those that didn’t want to pay taxes and were working in the sort of criminal area. Those to begin with have just been taxed the full value of their wealth,” he said.

 

Very large amounts above five million had to be converted at the central bank.

 

The process of invalidating the old notes, known as demonetisation, had not resulted in inflationary pressure or weakening of the foreign exchange rate, Njoroge said.

 

In 2016, India abruptly scrapped high-value currency notes, throwing its cash-based economy into a crisis. Njoroge said Kenya had learned lessons from the chaos in India and that’s why there was a four-month window.

 

The effort to stamp out corruption will be sustained, Njoroge said.

 

“It cannot be that we glorify people who are involved in crime. It cannot be,” he said.

 

($1 = 103.8000 Kenyan shillings)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

S.Africa to pay more for debt until fiscal problems addressed –central bank

PRETORIA (Reuters) - South Africa will keep paying a high rate of interest on the loans it needs to plug a widening budget deficit until its fiscal problems are addressed, the central bank said on Tuesday.

 

The South African Reserve Bank (SARB) has resisted political pressure to implement a drastic lowering of the repurchase, or repo rate, to boost growth that is expected to remain at 0.6% this year, pointing to fiscal rather than monetary policy as the root of the problem.

 

In its biannual Monetary Policy Review publication after holding lending rates steady at 6.5% on Sept. 19, the bank hinted that it might be willing to lower rates to support growth but the impact would not last.

 

“Even with low potential growth, it is still possible to have cyclical deviations from the trend, and these deviations should be responsive to interest rate adjustments – even if the larger growth problem ... is beyond the powers of monetary policy,” the SARB said.

 

The bank said its analysis showed the gap between short-term and long-term bonds was widening and that this reflected investor demand for a higher risk premium. The bank described South Africa’s yield curve as “unusually high”.

 

“Much of the steepening over the past year has come from lower short-term rates, reflecting lower inflation and weaker growth. Meanwhile, the longer end of the curve has stayed high due to fiscal risks,” the central bank said.

 

The SARB said the average gap this year between two-year bonds and 10-year bonds, at 2.4 percentage points, was large relative to recent history. The gap has averaged 1.1 percentage points from 2000 to 2019.

 

“Investors expect the repurchase rate to stay somewhat lower in the future, but they also now require more compensation for locking money down in long-term loans,” the bank said.

 

South Africa’s debt to GDP ratio is fast approaching the 60% seen as a red line by ratings agencies, while interest payments on outstanding debt regularly outpace key spending such as infrastructure and health.

 

 

 

African mast operator Helios Towers launches up to $1.8 bln London IPO -source

LONDON (Reuters) - African mobile networks operator Helios Towers Ltd priced its initial public offering at 115-145 pence per share on Wednesday, a source familiar with the matter told Reuters, implying a total valuation of $1.42 billion to $1.79 billion.

 

The company, which operates phone masts in the Democratic Republic of Congo, Republic of Congo, Ghana, South Africa and Tanzania, last year shelved plans for its IPO amid concerns about political risks in DRC and Tanzania.

 

Helios is planning a free float of at least 25% of the company, with a listing on the London Stock Exchange, and will use the proceeds for expanding its services, including possibly into new countries, it has said.

 

“It’s a really good business in a strong sector, telecoms in Africa is the sort of growth story that appeals in this low-growth environment (globally),” said a source familiar with the transaction.

 

The decision to press ahead with the deal comes despite turbulent market conditions in Britain amid the long-running chaos surrounding the negotiations to exit the European Union, and the poor recent performance of other African IPOs in London.

 

Airtel Africa saw its shares drop 15% to 67 pence per share on its market debut after completing a 595 million pound ($730 million) IPO in late June. Since then shares have fallen further, and were as low as 50 pence on Tuesday.

 

Vivo Energy shares are down 1% since its May 2018 debut.

 

Bank of America, Jefferies and Standard Bank are joint global coordinators on the Helios deal while Renaissance Capital and EFG Hermes are joint bookrunners.

 

Books for the deal close on Oct. 14, with the first day of trading expected the following day.

 

($1 = 0.8148 pounds)

 

 

 

Tunisia plans to issue up to 800 million euros of bonds in 2020

TUNIS (Reuters) - Tunisia needs around 8.5 billion Tunisian dinars ($2.96 billion) in external financing in 2020 and plans to issue bonds up to 800 million euros ($874.24 million) of debt, a senior official told Reuters on Wednesday.

 

“Initially, there is a plan to ask parliament for approval to issue bonds worth up to 800 million euros next year,” the official said. It was too early to determine the timing and exact value of the bonds, the official added.

 

In July  Tunisia has sold a seven-year, euro-denominated bond worth 700 million euros at an interest rate of 6.37%.

 

It needs total financing next year worth 11 billion dinars against 10 billion dinars in 2019, the source told Reuters, asking not to be named.

 

The external borrowing requirement will rise from 7 billion to about 8.5 billion, he said.

 

Tunisia’s economy has been in trouble since the toppling of autocrat Zine al-Abidine Ben Ali in 2011, with unemployment and inflation shooting up.

 

But the government official said signs of economic recovery would be clear in 2020, expecting gross domestic product growth to exceed 3%, compared with the 2.5% expected this year. He added that GDP growth could reach 3.4%, driven by higher gas output and growth in agricultural production.

 

The Nawara natural gas field, a project jointly owned by Austria’s OMV and the Tunisian National Oil Co., ETAP, started production two months ago. It will almost double national gas output to 65,000 barrels of oil equivalent per day, the government said.

 

Tunisia also expects record production of dates and olive oil, two of its main exports.

 

The government aims to reduce its budget deficit from the 3.9% of GDP expected this year to 3% in 2020.

 

($1 = 0.9151 euros)

 

 

 

Harmony gets new $400 mln credit facility - bank

CAPE TOWN (Reuters) - South Africa’s largest gold miner Harmony Gold has refinanced and increased its existing $350 million loan and revolving credit facility, raising it to $400 million, lead arranger Absa Bank Limited said on Wednesday.

 

Absa said the syndication of term loan and revolving credit facility was oversubscribed, adding that it reflected the confidence of participating banks in Harmony’s credit quality, its mining assets and strength of its balance sheet.

 

The facility will help Harmony expand its existing operations in South Africa, Papua New Guinea and the rest of Africa, the Absa statement said.

 

 

Ethiopian Airlines annual revenue up 29% -govt official

ADDIS ABABA (Reuters) - Ethiopian Airlines’ operating revenue jumped nearly 30% in the year to July 31, a senior government official said on Tuesday, helped by a surge in passenger numbers.

 

Operating revenue jumped by 28.6% year on year to 114.6 billion birr ($3.9 billion), said Wondafrash Assefa, head of communications at Ethiopia’s Public Enterprise Holding and Administration Agency (PEAA).

 

PEAA has a supervisory role over public enterprises including Ethiopian Airlines.

 

Wondafrash did not give a reason for the revenue leap, but the airline’s CEO Tewolde Gebremariam last month told state television that passenger numbers had risen by 14%.

 

In March, one of the airline’s Boeing planes crashed a few minutes after take-off from Addis Ababa en-route to Nairobi, killing all 157 people on board.

 

That crash and another involving Lion Air two weeks earlier led to the grounding of U.S. planemaker Boeing’s 737 MAX jets worldwide.

 

($1 = 29.2000 birr)

 

 

 

Egyptian financial services group Pioneers Holding plans three-way split

CAIRO (Reuters) - Pioneers Holding, one of Egypt’s largest financial services groups, plans to split into three separate companies focused on financial services, real estate and the industrial sector.

 

The Pioneers board has approved the plan and the split will take place once the group completes mandatory bids to increase its stake in five listed subsidiaries to 90%, it said in a statement.

 

Pioneers Holding aims to complete the entire process by year-end, CEO Walid Zaki told Reuters when asked about the timing. “We aim to have three budgets before the end of the year,” he said.

 

 

 

 

US set to impose tariffs on $7.5bn of EU exports in Airbus row

The US has been given the go-ahead to impose tariffs on $7.5bn (£6.1bn) of goods it imports from the EU.

 

It is the latest chapter in a 15-year battle between the US and the EU over illegal subsidies for planemakers Airbus and rival Boeing.

 

The ruling by the World Trade Organization (WTO) could mean tariffs on EU goods ranging from aircraft parts to cheese and salmon fillets.

 

Brussels has threatened to retaliate similarly against US products.

 

How did this row start?

The US first filed the case against Airbus in 2004, arguing that cheap European loans for Airbus amounted to illegal state subsidies.

 

The WTO decided in favour of the US, which subsequently complained that the EU and certain member countries were not in compliance with the decision, prompting years of further wrangling.

 

While the US had wanted to impose tariffs on $11bn worth of EU imports in retaliation for the aid to Airbus, the WTO cut that figure to $7.5bn - still the largest penalty of its kind in WTO history.

 

The WTO's dispute settlement body must formally adopt the ruling but is not expected to overturn the decision.

 

What happens next?

The US, which has previously said it would move forward with tariffs, must decide which items it will hit with higher import duties. In April, it published a list of $11bn worth of potential targets.

 

Meanwhile, the two sides are waiting for the WTO to decide on what tariffs the EU can impose against the US in retaliation for US state aid given to Boeing. That ruling is expected next year.

 

The European Commission, which has proposed tariffs on $20bn (£15bn) of US goods, said the two sides should try to reach a settlement.

 

"But if the US decides to impose WTO authorised countermeasures, it will be pushing the EU into a situation where we will have no other option than do the same," the European Commission said.

 

Could there be a settlement?

Governments across the EU, including the UK, echoed the call for the dispute to be resolved without tariffs.

 

"Resorting to tariffs is not in the interests of the UK, EU or US," the UK said. "We are working closely with the US, EU and European partners to support a negotiated settlement to the Airbus and Boeing disputes".

 

Bruno Le Maire, France's finance minister, said the country was "ready to respond firmly with our European partners".

 

"A friendly resolution to the Boeing/Airbus dispute is the best solution, and all the more so given that Europe could impose sanctions on the US next year," he said.

 

Germany's Chancellor Angela Merkel said: "A decision has been made based on international law through which Airbus will be affected unfortunately and we will see how the Americans will react".

 

How does this relate to Donald Trump's trade fights?

These tariffs are separate to US President Donald Trump's ongoing trade disputes with countries around the world.

 

They were sparked in March 2018 when his administration announced tariffs of 25% on steel and 10% on aluminium imported into the US.

 

It prompted the EU to impose €2.8bn (£2.4bn) of duties on US goods such as bourbon whiskey, motorcycles and orange juice last June.

 

Mr Trump is also considering raising import duties on European cars.

 

Is there an economic impact?

While the Boeing-Airbus fight pre-dates Mr Trump, the possibility of more tariffs adds to concerns about global trade, which has slowed significantly amid the many disputes.

 

On Wednesday, Airbus chief executive Guillaume Faury warned against hitting aircraft with tariffs, saying it would disrupt the industry, raise costs and hurt the broader economy - including in the US.

 

Close to 40% of Airbus's aircraft-related procurement comes from US aerospace suppliers, which it said it supports 275,000 American jobs in 40 states.

 

"Airbus is therefore hopeful that the US and the EU will agree to find a negotiated solution before creating serious damage to the aviation industry as well as to trade relations and the global economy," Mr Faury said.

 

BBC economics correspondent Andrew Walker said tensions in global trade had already risen since President Trump took office.

 

"It's worth remembering that the International Monetary Fund and others see trade conflict as one of the biggest risks to the global economic outlook," he added.--BBC

 

 

 

 

FTSE 100 suffers biggest drop since early 2016

The FTSE 100 has seen its biggest fall in over three-and-a-half years.

 

The blue-chip index dropped over 3%, marking its worst day since January 2016. European and US stock markets also slid amid a global sell-off.

 

The falls came after poor US jobs and manufacturing figures and a World Trade Organization decision paving the way for $7.5bn in US tariffs on EU goods.

 

Analysts said these factors had sparked concern over the strength of the global economy.

 

On Tuesday, one of the most closely-watched US manufacturing figures, the Institute for Supply Management's (ISM) index of factory activity, dropped to its lowest level since June 2009.

 

Fresh figures on Wednesday showing a slowdown in jobs growth in the private sector in September accelerated concerns over the US economy.

 

"Given that most other areas in the world aren't covering themselves in economic glory, the fact that the US is having a volatile time makes people a little worried," said Ben Kumar, an analyst at Seven Investment Management.

 

FTSE 100 falls 3.2%

 

Robert Pavlik, chief investment strategist manager at SlateStone Wealth, said the slowdown in China was also driving investors to sell shares.

 

"It's all adding up to the same thing essentially: worries that the global economy is slowing and giving investors reason to pause and take profits," he said.

 

In Europe, Germany's main index, the Dax, closed 2.8% lower, while France's Cac 40 lost over 3%.

 

In the US, in afternoon trading, the three main indexes were all trading around 2% lower.

 

Dow Jones drops

 

But Mr Kumar said it was too early to be concerned.

 

"It's hard to tell anything from a one day perspective.

 

"People have overreacted which does tend to happen. We're in this world where everyone freaks out first and asks questions later.

 

"It's just one of those days where lots of things go wrong at the same time."--BBC

 

 

 

 

Microsoft bets on foldable, though not bendable, devices

Microsoft has unveiled two folding devices, with dual touch screens, which it says will create a new category in mobile computing.

 

But, unlike attempts from its rivals, the firm has not adopted a bendable screen - nor has it decided to include a high-end camera system on the products.

 

Panos Panay, Microsoft’s chief product officer, gave the BBC a demonstration of the devices ahead of their public unveiling in New York on Wednesday.

 

"We want people to see the direction we're taking with productivity,” he said, adding that the products will be released in a year’s time.

 

“This is the earliest we've ever shown [a prototype] Surface. We're going to get developer units out pretty soon.”

 

One industry watcher said it was no surprise that Microsoft had shied away from trying to incorporate an all-in-one foldable screen, despite the fact that products using the technology had already gone on sale.

 

"Given the issues Samsung had with the initial version of the Galaxy Fold and the wider challenges around the fragility of flexible displays, it makes sense that device makers are experimenting with alternative designs," commented Ben Wood from the consultancy CCS Insight.

 

As part of Wednesday’s launch, Microsoft also announced several updates to the Surface laptop range due to be released later this year, and open to pre-orders today.

 

Split screen

 

The Surface Neo consists of two screens which open up to a 13in display with a split in the middle, and runs Windows 10X, a variation of the operating system designed to run on dual-screen devices.

 

The Surface Duo - a smartphone - opens to 8.3in, also with a split, and runs Android, Google’s mobile operating system. In the BBC’s hands-on with the device, it experienced several glitches - including an unresponsive touchscreen, and sudden powering down. Mr Panay stressed the devices were still in the early stages of development.

 

Mr Panay would not say how much the devices would cost, nor would he be drawn on whether his engineers had considered a flexible screen that would run across the split. Instead, he said his preference was for the products to incorporate a hinge design that can bend both ways.

 

"The overload is much less," Mr Panay told the BBC. "I'm staying in context on a web browser on one side, and I'm looking at my mail on the other. Or, I have a calendar on one side, and I have my mail on the other.

 

"It's structured in a way that you're actually optimising and feeling good about being productive.”

 

Analyst Geoff Blaber said it would be some time until it became clear whether the devices would find favour with consumers.

 

"With Surface Neo and Duo, Microsoft is taking a brave step into a very new category," he said.

 

"Duo is a bold new category of device and will take time to build developer and carrier support. This is the start of a journey for Microsoft and expectations should be set accordingly."

 

Benedict Evans, from the venture capitalist firm Andreessen Horowitz, was even more sceptical.

 

"Every year someone makes a phone that's 'two phones with a hinge in the middle'," he tweeted.

 

"The problem was always that firstly, the phone was twice the size and weight, and secondly, no developers would bother supporting it since it was a tiny percentage of the base.

 

"Now Microsoft has one..."

 

Booklet

 

The Surface Neo can be positioned like a typical laptop, with an additional keyboard placed over the lower screen. In this configuration, the remainder of the screen acts as an extension to the keyboard, similar to - but larger than - Apple’s Touch Bar.

 

The smaller device, Surface Duo, will be seen as a competitor to Samsung’s Galaxy Fold. Unlike Microsoft’s effort, Samsung has managed to create a bendable screen made from plastic rather than glass. However, the product was delayed after reports of extreme unreliability. Despite adding reinforcements, the firm still recommends a “light touch” when using the $2,000 device.

 

Samsung’s device features six cameras, including a telephoto and wide angle lens. Surface Neo and Duo, however, have just one front-facing camera, the specifications of which Microsoft was not yet willing to share.

 

This isn’t Microsoft’s first attempt at a “booklet” computer. In 2009, details leaked about a dual-screen product named Courier - but it was shelved less than a year later. Other projects, such as the Codex, never graduated beyond the research stage.

 

Since then, however, Microsoft has enjoyed considerable hardware success. Its Surface line first launched in 2012 to a mixed reaction, but has in time become a significant revenue stream for the firm. In the past fiscal year (ending in June 2019), the Surface range accounted for $5.7bn of Microsoft’s total revenues, up 40% on the previous year.

 

Ear scanning

 

The firm has also followed Amazon and Apple in releasing wireless in-ear headphones, called Surface Earbuds.

 

Kait Schoeck, senior industrial designer at Microsoft, said her team 3D-printed “more than a thousand” different shapes and sizes of the ear bud in an attempt to prevent the device falling out - a common complaint with other brands of wireless headphones.

 

“We scanned thousands of ears,” Ms Schoeck said.

 

"But we also took the approach of just trying it on. It really comes down to making the prototype and putting it in people's ears. So hundreds and hundreds of people would come through this lab, try it on, give us feedback, and then we go through another iteration."

 

While being worn, Surface Earbuds can be used as a control device, such as tapping your ear to move on a Powerpoint slide, Microsoft said.

 

However, priced at $249, the product is considerably more expensive than Amazon’s Echo buds ($130) and Apple’s latest AirPods ($159/$199).--BBC

 

 

 

Female high flyers start #MeToo-style pay campaign

A group of 100 of the UK's most successful businesswomen have launched a campaign to close the gender pay gap.

 

Some of corporate Britain's biggest names are behind the #MeTooPay initiative including Dame Minouche Shafik, potentially the Bank of England's next governor, and GSK boss Emma Walmsley.

 

It was sparked following a gender bias case involving BNP Paribas bank.

 

The campaign is spearheaded by former Royal Mail chief Dame Moya Greene.

 

What is the pay gap where I work?

Gender pay gap grows at hundreds of big firms

Gender pay: Fewer than half of UK firms narrow gap

"Pay discrimination is more widespread than we had thought, even though we have had laws on the books for 40 years," she told the BBC. "We want to keep this issue alive.

 

"Most companies have very good policies, but in many cases they are not properly enacted, nor are they always leading to good outcomes."

 

#MeTooPay has launched a website and social media campaign to keep the gender pay gap in the spotlight.

 

'Unconscious bias'

The group was shocked by the experiences of BNP Paribas bank employee Stacey Macken, who worked in the firm's prime brokerage division.

 

An employment tribunal revealed her basic salary was 25% less than that of her male colleague, and her first-year bonus payment was less than half of his.

 

That was despite equal grades for their workplace performance.

 

Three years after joining, the difference between Ms Macken's bonus and that of her male peer had widened to 85%.

 

Ms Macken won her claim for sexual discrimination against the investment bank.

 

"It is part of a series of high-profile discriminatory cases we have seen over the past 12 to 18 months," said Dame Moya, Royal Mail boss from 2010 to 2018, and currently a non-executive director at airline Easyjet.

 

"Pay discrimination is fundamentally a management issue, they decide who is going to be paid what," she adds.

 

However, she said that in the majority of instances discrimination was not deliberate, but a case of "unconscious bias".

 

'Male-dominated industry'

The campaign website will include the latest instances of pay discrimination, record details of important court cases and provide a place "to share good and bad policies in action".

 

It will ask for input from workplace professionals, including compensation experts who can help accurately assess gender pay differences, and negotiation experts who can help women achieve better salary deals.

 

Dame Moya hit the headlines last year when her successor at Royal Mail, Rico Back, was paid £100,000 - or 17% - more in base salary than she received. The delivery firm said the discrepancy was to compensate for lower contributions to his pension scheme.

 

"I thought that was fair," she said. "I received a pension reward that was appropriate for the time."

 

Commenting on what she did at Royal Mail to improve diversity, she said: "Logistics is and was a male-dominated industry. I think at Royal Mail we were able to increase the number of women in all roles. We also helped raise awareness that logistics had a long way to go."

 

'Cut through'

Other high profile backers of the campaign include broadcaster Clare Balding, Land Securities' chairwoman Dame Alison Carnwath, Dame Jayne-Anne Gadhia, who was chief executive of Virgin Money from 2007 to 2018, and Baroness Dido Harding, chairman of NHS Improvement and former chief executive of TalkTalk.

 

Some might question the wisdom of harnessing the name of the pay campaign to the original and more famous anti-sexual abuse #MeToo movement.

 

"What we thought was that in the UK today, there is so much of importance going on that it is so hard to get 'cut through'," says Dame Moya.

 

"This campaign allows us to morph from the sexual harassment aspects of discrimination and move it into another area."--BBC

 

 

 

Tesco boss Dave Lewis in shock departure

Tesco's chief executive Dave Lewis is to leave next year after leading a turnaround plan for Britain's biggest supermarket chain.

 

In a move that surprised analysts, Mr Lewis - who took the helm in 2014 - said the decision was "personal".

 

Ken Murphy, who has held senior positions at the owner of chemist chain Boots, will replace him.

 

The departure was announced as Tesco reported a 6.7% rise in first-half profits to £494m.

 

Tesco chairman John Allan said he had accepted Mr Lewis' resignation with "regret" and said the chief executive intended to leave "in the summer of 2020".

 

Mr Lewis said: "I believe the tenure of a chief executive should be a finite one and that now is the right time to pass the baton. The turnaround is complete, we have delivered all the metrics we set ourselves."

 

The 54-year-old added: "I am going to take some proper time out, recharge the batteries and think about what comes next."

 

Analysts at Shore Capital said he was "the bloke that saved Tesco".

 

He took the helm at a tumultuous time for the supermarket group, announcing shortly after he took over in 2014 that the retailer had been overstating its profits.

 

The company subsequently revealed a loss of £6.4bn, the biggest-ever suffered by a UK retailer

 

Since then Mr Lewis has set about reducing costs, with the latest of round job cuts announced in August when it said 4,500 staff in 153 Tesco Metro stores would lose their roles.

 

He also took on the discounters Aldi and Lidl by opening Jacks, Tesco's own discount chain.

 

'Total surprise'

Mr Lewis also orchestrated Tesco's 2017 takeover of Booker, the biggest food wholesaler, in a £3.7bn deal to create the "UK's leading food business".

 

Bernstein analyst Bruno Monteyne told BBC Radio 4's Today programme that there had been speculation about Mr Lewis' future after that deal as Booker's chief executive Charles Wilson had joined at the time.

 

"We're all trying to grapple exactly about the timing right now," said Mr Monteyne. His departure now was "a total surprise", he said.

 

Mr Lewis had joined five years ago "at a very difficult moment" for Tesco, Mr Monteyne said.

 

"Not only had it lost the trust of the customers, losing material market to the discounters, it ended up with an accounting fraud... internal morale broken. He really took over a broken company, and from being the most profitable retailer in Europe, suddenly had losses for the first time ever."

 

As with comedy, timing is everything in big business. Many chief executives overstay their welcome, failing to realise that the clock is always ticking; the average tenure of a FTSE 350 chief executive is 4.5 years, and coming down.

 

Dave Lewis, however, is clever enough to know that it's best to leave while the going is good.

 

He joined Tesco when it was in disarray and at a time of some drama. There had been a string of profits warnings, a boardroom bust-up leading to the departure of the chief executive and a nasty accounting scandal.

 

Mr Lewis moved quickly and the returns show in today's half-year results, which were rather overshadowed by Mr Lewis's departure. Sales were flat, but the operating margin hit 4%, a year before Mr Lewis said it would.

 

That is an achievement but Mr Lewis will know that running Tesco will not get any easier. Keeping Tesco at that level of operating margin is going to be a long, hard slog.

 

There will inevitably be speculation that he will return to Unilever, the Anglo-Dutch consumer goods giant where he worked before joining Tesco.

 

The shares initially dipped but were trading nearly 2% higher at 243p as the results for the six months to 24 August were better than expected.

 

Operating profit, excluding one-off items, rose by 25% at £1.4bn.

 

Like-for-like sales, which strip out revenue from new stores opened during the six months, rose 0.1% in the UK and Ireland.

 

At a group level, including operations in central Europe, notably Poland, and Asia, same store sales fell 0.4%.

 

When Mr Lewis joined Tesco from household goods company Unilever he was the first outsider to run the supermarket chain.

 

Speculation will turn to what he will do next, but Mr Lewis said: "I'm going to step back and have a think about what I want to do next with my family. I'm 54 years old and I'm going to sit back and think where I can make the best contribution."

 

His successor, Mr Murphy, has also been hired from outside after a lengthy career with Boots, which is now part of Walgreens Boots Alliance.

 

The 52 year-old graduated from University College Cork and was educated at the Christian Brothers College.

 

The Irishman left Walgreens Boots Alliance in January 2019 when his last role was chief commercial officer, president of global brands. He remains as a consultant.

 

But he held a wide-range of roles, including a two year period as chief operating officer of Boots until October 2013.

 

At Tesco, his salary will be £1.35m salary before bonuses, and his joining date has not yet been confirmed.

 

In-tray

"We would imagine that Mr Lewis may have been familiar with his replacement from his Unilever personal care days," said analysts at Shore Capital. "Mr Murphy has big shoes to fill."

 

They expect continuity for now but when Mr Murphy does take the helm he will face a number of challenges:

 

Mr Allen described Mr Murphy as "growth-orientated seasoned business leader" and said he had been been looking for "experience, proven leadership in international retail businesses, a strong strategic mind"

 

In preparation for Brexit, Tesco said it was increasing its stock of long-life shelf products and noted that the UK imports about 50% of fresh food it needs.--BBC

 

 

 

'Flight shame' could halve growth in air traffic

Travellers are beginning to turn their backs on air travel over concern for the environment, according to a survey by Swiss bank UBS.

 

The Swedish concept of "flygskam" or "flight shame" appears to be spreading.

 

One in five of the people surveyed had cut the number of flights they took over the last year because of the impact on the climate.

 

UBS said the expected growth in passenger numbers could be halved if these trends were borne out.

 

Global air travel has grown by between 4% and 5% a year, UBS said, meaning the overall numbers are doubling every 15 years.

 

What is flygskam? Greta speaks up about 'flight-shaming'

Why ‘flight shame’ is making people swap planes for trains

Industry forecasts from plane makers Airbus and Boeing predict growth will continue at that rate until 2035.

 

But the UBS survey suggests that high-profile campaigns - like the example set by Swedish school girl Greta Thunberg, which has helped push the climate crisis up the political agenda - could trigger a change in flying habits in wealthier parts of the world, particularly in the US and Europe.

 

After surveying more than 6,000 people in the US, Germany, France and the UK, UBS found that 21% had reduced the number of flights they took over the last year.

 

Nathan Molyneaux, from Leeds, moved to Aarhus in Denmark for work, and since then the number of flights he has taken have increased.

 

"I moved out here two and a half years ago and flights have ballooned a bit as I have friends in the UK," says the 38-year-old senior sales planner.

 

"I am flying a lot more than usual and I need to reduce that for the good of the environment - the challenge is to try and not fly at all."

 

As an extreme example of his new regime, the keen runner plans an overland trip from his home on Denmark's east coast to Barcelona for a half-marathon next February.

 

"I will take a train from Aarhus to Cologne in Germany, and spend the night there. I will then take two TGV high-speed trains through France and Spain," he says.

 

"It will be a long journey but that is part of the fun - about 24 hours of travel but I should get to see some beautiful countryside."

 

He estimates that moving from aircraft to trains as his main mode of travel will be about 20% more expensive, but says his trip to Catalonia will only cost €40 (£36) more.

 

Mr Molyneaux says there has been a lack of investment in Danish railways in recent years, but that appears to now be changing. He is also disappointed about the reduction in ferry services between the north of England and mainland Europe, with a number of routes axed in recent years.

 

Only 16% of British respondents said they were cutting back on flying, but 24% of US travellers were worried enough to change their flying habits.

 

The survey was first conducted in May this year and UBS said there had been a marked change since then.

 

The bank now expects the number of flights in the EU will increase by just 1.5% per year, which is half the rate expected by plane maker Airbus. The bank forecasted that growth in US flights would fall from the 2.1% expected to just 1.3%.

 

And that could have a big impact on aircraft manufacturers.

 

UBS estimates it could reduce the number of smaller planes ordered from Airbus and rival Boeing by 110 each year.

 

The bank said that would reduce revenues at Airbus, which controls around 57% of the market, by around €2.8bn (£2.5bn) a year.--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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