Major International Business Headlines Brief::: 11 October 2019

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Major International Business Headlines Brief::: 11 October 2019

 


 

 


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*  Dyson has scrapped its electric car project

*  Nissan Europe 'unsustainable' in no-deal Brexit

*  US sanctions Guptas for South African 'corruption'

*  Apple drops Hong Kong police-tracking app used by protesters

*  Aerospace industry seeks Brexit reassurance

*  UK set to avoid recession despite poor August

*  US-China trade talks resume amid diplomatic tension

*  Nigeria seeks $62 bln from oil companies -attorney general

*  Zambia says owes major mining firms $215 million in tax refunds

*  World Bank sees Algeria's 2019 GDP growth at 1.3%

*  South African rand stronger as dollar dips, stocks up

*  World Bank sees Egypt economy growing 5.8% in 2019/20

*  Egypt's annual urban consumer inflation falls to 4.8% in Sept as reforms
bite

*  S&P Global says no immediate pressure on South Africa rating

*  Tanzania gold export earnings up 25% in year to August -central bank

 


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Dyson has scrapped its electric car project

Dyson, the UK-based company best known for its vacuum cleaners, has scrapped
a project to build electric cars.

 

The firm, headed by inventor Sir James Dyson, said its engineers had
developed a "fantastic electric car" but that it would not hit the roads
because it was not "commercially viable".

 

In an email sent to all employees, Sir James said the company had
unsuccessfully tried to find a buyer for the project.

 

The division employs 500 UK workers.

 

Dyson had planned to invest more than £2bn in developing a "radical and
different" electric vehicle, a project it launched in 2016. It said the car
would not be aimed at the mass market.

 

Half of the funds would go towards building the car, half towards developing
electric batteries.

 

In October 2018 Dyson revealed plans to build the car at a new plant in
Singapore. It was expected to be completed next year with the first vehicles
due to roll off the production line in 2021.

 

Dyson wanted to make something revolutionary - but also needed to make it
pay. And the sums simply didn't add up.

 

Sales of electric cars are climbing rapidly. Yet they still cost more to
make than conventional cars, and generate much lower profits - if any.

 

Major manufacturers like VW can afford to plough tens of billions into the
EV industry - on the basis that economies of scale will ultimately make the
technology cheaper and generate returns.

 

Even the upstart Tesla, widely credited with showing everyone else just how
good electric cars could be, has burnt through mountains of cash and had to
go cap in hand to investors.

 

Dyson has concluded it simply can't afford to play with the big boys -
although its efforts to make a quantum leap in battery technology will
continue.

 

The company also planned to invest £200m in the UK in research and
development and test track facilities. Much of that money has already been
spent and Dyson said it would use the site for other projects.

 

The rest of the funds intended for the electric car project would still be
spent on developing other products, including its battery technology, Dyson
said.

 

'Not a product failure'

The first cars had already been developed and were being tested.

 

But in an email on Thursday, Sir James revealed that Dyson was closing
electric car facilities both in the UK and Singapore.

 

The project employed 523 people, 500 of whom were in UK, and Sir James
praised their "immense" achievements.

 

"This is not a product failure, or a failure of the team, for whom this news
will be hard to hear and digest," Sir James wrote.

 

But, he said: "We have tried very hard throughout the development process,
we simply can no longer see a way to make it commercially viable."

 

"The Dyson automotive team has developed a fantastic car; they have been
ingenious in their approach while remaining faithful to our philosophies."

 

He said the firm was trying to find alternative roles for the workers in its
home division, which makes things such as vacuum cleaners, fans and
hairdryers.

 

Sir James said Dyson would continue to work on the battery technology, which
was used in the car.

 

"Our battery will benefit Dyson in a profound way and take us in exciting
new directions."

 

"In summary, our investment appetite is undiminished and we will continue to
deepen our roots in both the UK and Singapore," he said.

 

"This is not the first project which has changed direction and it will not
be the last."--BBC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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Nissan Europe 'unsustainable' in no-deal Brexit

Japanese carmaker Nissan has warned that a no-deal Brexit could make its
European business model unsustainable.

 

Nissan's European chairman, Gianluca de Ficchy, said if a 10% export tariff
was introduced after the UK left the EU it would put its operations "in
jeopardy".

 

This would be the case if the UK moved to World Trade Organization (WTO)
rules after Brexit, he said.

 

He was speaking at Nissan's plant in Sunderland, where work on a new model
of the Juke is due to start.

 

The Japanese firm said it had invested £100m in the plant, which also makes
the Qashqai and electric Leaf models.

 

Mr de Ficchy said Nissan still intended to build in Sunderland, the UK's
biggest car plant, but that it was difficult to plan for the future amid
Brexit uncertainty.

 

The new Juke has been designed and manufactured in the UK, aimed
specifically at European markets, with two-thirds of its components coming
from the EU and 70% of production destined for the continent.

 

Nissan, which employs 7,000 in Sunderland, also has operations in Spain.

 

Mr de Ficchy said the cost of moving to WTO rules would mean the "entire
business model for Nissan Europe will be in jeopardy".

 

Mr de Ficchy said if duties were applied after a no-deal Brexit it would
"create an enormous problem"

The car industry is the UK's biggest exporter of goods and eight out of
every 10 cars built in the UK are exported.

 

Speaking to the BBC, Mr de Ficchy said: "We do not know still what a no-deal
means.

 

"There are many alternatives, and today there is a lot of uncertainty.

 

"The only message I can [give] is that if a no-deal will be associated with
the application of 10% duties under the WTO rules, that will create an
enormous problem for the overall European activities of Nissan Europe.

 

"If we will have to sustain 10% export duties on the vehicles that we export
from UK to EU, knowing that those vehicles represent 70% of total
production, the overall business model won't be sustainable.

 

"It's not a question of Sunderland, it's a question of the overall economic
sustainability of our business [in Europe]."

 

He said the business was asking for tariffs not be imposed if there is a
no-deal Brexit.

 

"We are asking not to have tariffs being applied in a no-deal scenario
because otherwise the tariffs won't be sustainable for us," he said.

 

A spokesperson for the Department for Business, Energy and Industrial
Strategy said: "We continue to work closely with the sector as they get
ready for Brexit on 31 October."

 

On Wednesday, union leaders revealed night shifts at Sunderland would end -
but Mr Ficchy said this was not the result of Brexit.

 

Other carmakers have warned about the impact of Brexit on their business,
not just because of the cost of tariffs but the potential slowdown in
production caused by new customs checks after the UK leaves the EU.

 

The industry operates a "just-in-time" model, shifting parts around the EU
to construct cars in plants across the 28-nation bloc.

 

Honda confirms Swindon car plant closure

September figures deepen industry gloom

Last month, Carlos Tavares, chief executive of PSA - the car group that owns
Vauxhall - compared a no-deal Brexit to a head-on train crash.

 

He has warned previously that Vauxhall plants at Ellesmere Port and Luton
were under threat from Brexit.

 

In June, PSA Group announced plans to build a new version of the Vauxhall
Astra at its Ellesmere Port factory in Cheshire.

 

The industry is also under pressure with fewer diesel cars being bought and
emissions standards presenting challenges for carmakers.

 

In February, Honda announced the closure of its Swindon plant but said it
was nothing to do Brexit.--BBC

 

 

US sanctions Guptas for South African 'corruption'

The US has placed economic sanctions on members of Gupta family and a
business associate for their alleged roles in a "significant corruption
network" in South Africa.

 

The three Gupta brothers, friends of former South African president Jacob
Zuma, are accused of bribing politicians to advance their business.

 

The Guptas have denied wrongdoing.

 

The order forbids US entities from doing business with the men or handling
their assets.

 

The US said the Guptas engaged in "pay-to-play political patronage, which
was orchestrated at the expense of the South African people".

 

"The Guptas and [Salim] Essa have used their influence with prominent
politicians and parties to line their pockets with ill-gotten gains," US
Treasury official Sigal Mandelker said. "We will continue to exclude from
the U.S. financial system those who profit from corruption."

 

The order applies to Ajay, Atul, and Rajesh Gupta as well as Salim Essa.

 

US officials said it is intended to support South Africa's ongoing inquiry
into the alleged corruption. It further isolates the Guptas, who had already
been blacklisted at several South African banks.

 

 

How did this start?

The Gupta brothers arrived in South Africa from India in the 1990s and
established computer business Sahara, later buying up stakes in mining and
engineering companies, a luxury game lodge, a newspaper and a 24-hour news
TV station.

 

They are accused of bribing officials to advance their business interests
and win government contracts. They also employed members of Mr Zuma's
family.

 

Those ties had long shielded the family, but in 2018, with Mr Zuma's grip on
power slipping, South African police raided the family's Johannesburg
compound. Mr Zuma resigned shortly after.

 

The Guptas had already left the country, reportedly for the United Arab
Emirates. At the time, many of their businesses were also in the process of
closing down, changing hands or being targeted for seizure by authorities.

 

The scandal tarnished several global companies that had worked in the
country, including financial consultants McKinsey, accounting giant KPMG and
software firm SAP.

 

British public relations giant Bell Pottinger was driven into
administration.--BBC

 

 

 

Apple drops Hong Kong police-tracking app used by protesters

Apple has removed an app that protesters in Hong Kong have used to track
police movements and tear gas use, saying the app violated its rules.

 

The company said the app, HKmap.live, had "been used in ways that endanger
law enforcement and residents".

 

Apple initially rejected the app - which uses data from protesters on the
ground - from its store.

 

When it later appeared on the App Store, there was a sharply-worded response
in official Chinese media.

 

The removal then came after "many concerned customers in Hong Kong contacted
us", Apple said.

 

"We have verified with the Hong Kong Cybersecurity and Technology Crime
Bureau that the app has been used to target and ambush police," Apple said.

 

The statement added that "criminals have used it to victimise residents in
areas where they know there is no law enforcement".

 

Although the app has been removed from Apple's store, a website version
appears to remain active. There is also a version on Google Play.

 

When the app was available on the App Store, Apple was criticised in Chinese
state media.

 

Communist Party publication the People's Daily didn't name the app, but
criticised Apple for "opening the door" to violent protests.

 

"Letting poisonous software have its way is a betrayal of the Chinese
people's feelings," the paper said.

 

Apps previously have been removed after their release if they were found to
facilitate illegal activity or threaten public safety.

 

 

Media captionThe weekend saw riots over the mask ban, a second person shot,
and tear gas fired at protesters

A number of companies have drawn the ire of Chinese officials over the
long-running Hong Kong protests.

 

China's state broadcaster has scrapped plans to show two US NBA basketball
pre-season games over a pro-Hong Kong tweet from a team manager, and
sponsors have also been critical.

 

Jeweller Tiffany & Co scrapped an advert image after some Chinese consumers
suggested it was supportive of the protesters.

 

And California-based Video-game company Blizzard suspended a gamer after he
expressed support for the protestors during a livestream.

 

Hong Kong protesters, meanwhile, the other hand, have targeted mainland
banks and what they perceive to be pro-mainland businesses.

 

For Apple, China is both a major market and a manufacturing base for its
products.

 

The manufacturing of Apple products directly and indirectly accounts for
around three million jobs in China.

 

Apple had sales of $9.61bn last quarter in its Greater China category, which
includes Taiwan and Hong Kong.--BBC

 

 

 

Aerospace industry seeks Brexit reassurance

There is growing concern among key aerospace manufacturers about regulatory
alignment and the ability to bring products to market after Brexit.

 

The firms have sought reassurance that the UK would continue to be a member
of the European Aviation Safety Agency after any Brexit deal.

 

They also warned that alignment with chemicals regulations is "vital" for
the sector.

 

The government was contacted by the BBC and is yet to respond.

 

The government is facing a backlash from key manufacturers amid growing
industrial concern that Boris Johnson's Brexit negotiators have dropped
existing commitments to participate in specific EU regulatory institutions
after any Brexit deal.

 

BBC News has obtained a letter from the aerospace industry body, the ADS, to
the government asking for "reassurance" that "continued membership of the
European Aviation Safety Agency (EASA) and alignment with EU chemicals
regulations" which "are vital for our sector".

 

It said that "we received assurances from the previous [May] government that
the UK would seek to continue membership of or retain participation and
influence in EU agencies such as EASA".

 

The letter, dated this week, and sent to Cabinet Office minister Michael
Gove, expresses "concern" that the PM has signalled a different approach.

 

Repeated attempts to get clarity on this issue have not reassured the
aerospace and other industries on this topic.

 

It says that "regulatory divergence would pose a serious risk to our
sectors" will result in "huge new costs and disruptions to many of our
member companies", and an "inability to shape safety rule making" which
"will make it much more difficult to bring UK technology to market".

 

In the existing political declaration on the future relationship between the
UK and the EU, negotiated under Theresa May, there were specific references
to ongoing close cooperation between a post-Brexit UK and three named
regulatory agencies - the European Aviation Safety Agency, the European
Chemical Agency as well as the European Medicines Agency.

 

The political declaration said "in this context the UK will consider
aligning with [European] Union rules in relevant areas".

 

After the completion of negotiations, Mrs May confirmed to parliament that
the political declaration meant for her negotiating a form of UK membership
of these agencies which set technical specifications and safety standards
across the whole European single market.

 

The concerns are shared in other industries, who have asked for similar
reassurances, only to be told in recent weeks that the government is seeking
a "best in class" free trade agreement, where the UK would set its own
regulatory standards.

 

The government has acknowledged that it wants to take the "level playing
field" arrangements out of the political declaration that promised alignment
on environmental, social, labour and some tax measures.

 

These were also seen as crucial to ongoing industrial regulatory
cooperation, and preventing the introduction of many types of checks on
trade.

 

But the government fears such measures agreed by Theresa May will restrict
the ability of a post-Brexit government to strike meaningful trade deals
with other countries such as the US.

 

A source close to the negotiations acknowledged to the BBC that among
changes being negotiated to the political declaration references to EU
agencies could get scrapped.

 

Even as most of the negotiating attention remains on Northern Ireland, the
change in approach from the Johnson government suggest a significantly
different, more diverged end point for Brexit for England, Scotland and
Wales, than envisaged under Theresa May.

 

A number of Labour MPs who say they want to support a deal have already
expressed a desire for a deal with less scope for regulatory
divergence.--BBC

 

 

 

UK set to avoid recession despite poor August

The UK's economy is expected to avoid a recession after showing
better-than-expected growth in the three months to the end of August.

 

The Office for National Statistics said the economy would now have to shrink
sharply in September for the third quarter to show an overall contraction.

 

In three months, the economy grew by 0.3% as weak manufacturing was offset
by buoyant TV and film production.

 

Even so, the economy unexpectedly shrank in the month of August by 0.1%.

 

Why the talk about a recession?

The growth figures are being watched closely for signs of recession -
defined as two consecutive quarters of contraction - after the economy
shrank in the second quarter for the first time since 2012.

 

The next quarter runs until the end of September so the August data is the
second month in the third quarter.

 

What is the UK's GDP?

Although the economy contracted in August, the ONS revised up its forecast
for growth in July from 0.3% to 0.4%.

 

Andrew Wishart, UK economist at Capital Economics, said that this revision
meant "fears that the economy is already in recession have been banished".

 

The ONS said the economy would now have to contract by 1.5% in September
alone for the UK to slide in to recession.

 

What happened in the latest three months?

The ONS uses the monthly data to compile a rolling three-month picture of
GDP.

 

It said that in the first half of 2019 the data had been volatile because of
preparations for the original Brexit date in March, which had sparked some
stockpiling.

 

Rob Kent-Smith, head of GDP at the ONS, said: "Growth increased in the
latest three months, despite a weak performance across manufacturing, with
TV and film production helping to boost the services sector.

 

"Services provided [the] majority of the growth over the three months, with
production and manufacturing falling back," he said.

 

Over the three months the services sector - which makes up roughly 80% of
GDP - grew by 0.4%, following a period of largely flat growth in the
previous three months.

 

The ONS said the production sector fell by 0.4% in the same period, while
construction output grew by 0.1%.

 

So why did the economy shrink in August?

For August, economists had been expecting zero growth.

 

But the ONS data showed it contracted, dragged lower by a drop in
manufacturing when car production was subdued.

 

Only the construction sector expanded during the month, said Chris
Williamson, chief business economist at IHS Markit.

 

Manufacturing contracted by 0.7% while the all-important services sector
failed to grow.

 

He described the August data as "disappointing".

 

Did The Crown save the UK from recession?

TV and film production - such as filming of The Crown - enabled GDP to grow
by 0.3% in the three months to August, more than compensating for activity
languishing across the board in that month alone.

 

But that is not sufficient reason to cheer.

 

As the Bank of England has highlighted, growth has lost momentum over the
past year and the economy is limping rather than flying.

 

Part of this is undoubtedly Brexit related - with business investment
suffering amidst the prolonged uncertainty. A failure of firms to spend on
factories and machines will have long-reaching implications. This is one
reason why economists are pulling down their forecasts for next year too.

 

But it is also unhelpful that growth in some of our biggest trading
partners, such as Germany, has run into problems. The bright spot remains
job creation - but that too could falter.

 

This sluggishness ignited a mood shift among policymakers. Even those
members of the Bank's interest rate panel who previously favoured a rise in
the cost of borrowing now think their next move could be a cut - deal or no
deal.

 

The question for them, grappling with as much uncertainty as the rest of us,
is when.

 

What does it mean for the future?

The data sparked some economists to revise up their expectations for the
third quarter.

 

Mr Wishart said the the economy could grow by 0.4% in the third quarter,
more than he had originally expected.

 

However, John Hawksworth, chief economist at PwC, said that while the data
"has put to bed fears of the UK economy falling into recession in the third
quarter of 2019", he was cautious about the future.

 

He said there could be "problems ahead in the fourth quarter as heightened
Brexit-related uncertainty takes a toll on both business investment and
consumer confidence."

 

Uncertainty about Brexit was also mentioned by Mr Williamson. who expects
the UK to expand by 1% in 2019 but by just 0.5% in 2020.

 

"These growth projections assume a Brexit delay beyond 31st October and that
the UK and EU will eventually achieve a comprehensive agreement on future
relations. However, a no-deal Brexit would likely throw the UK into a
prolonged recession," he said.--BBC

 

 

 

US-China trade talks resume amid diplomatic tension

China and the US resumed trade talks in Washington on Thursday against a
backdrop of heightened diplomatic tension.

 

This week the US government blacklisted 28 Chinese entities it said were
"implicated" in human rights abuses.

 

The US also imposed additional visa restrictions for Chinese government
officials.

 

Without progress, the US plans to raise tariffs on $250bn worth of Chinese
goods from 25% to 30% next Tuesday.

 

As the first day came to a close, US President Donald Trump said the talks
had gone well. He is expected to meet with Vice Premier Liu He on Friday.

 

But the recent diplomatic disagreement could complicate the negotiations.

 

Although many of the blacklisted entities are government security bureaus,
the eight companies named include some of China's leaders in artificial
intelligence.

 

The blacklist could restrict the access of those companies to US microchips,
which they currently rely on for many of their products and services.

 

The Chinese Embassy in Washington has denounced the visa action and said the
US accusations on human rights violations were "made-up pretexts" for
interfering in China's affairs.

 

US officials have vowed to keep pushing Beijing over its massive security
operation in Xinjiang, in China's far west.

 

"We're going to continue to talk about these human rights violations," the
US Secretary of State, Mike Pompeo, told PBS.

 

The US Department of Commerce alleges the blacklisted entities are involved
in "repression, mass arbitrary detention, and high-technology surveillance".

 

Could blacklisting China's AI champions backfire?

Goldman Sachs reviews role in Chinese tech firm Megvii

US imposes China visa restrictions over Uighur issue

Human rights groups and the UN say China has rounded up and detained more
than a million Uighurs and other mostly Muslim minorities in detention
camps.

 

China insists they're "vocational training centres" aimed at preventing
terrorism, promoting integration into Chinese society and providing
employment.

 

Low expectations

The US and China have been locked in a long-running trade spat over a
variety of thorny issues.

 

The US has been demanding better protection for US intellectual property,
and an end to both cyber theft and the forced transfer of technology to
Chinese firms.

 

It also wants China to reduce industrial subsidies and improve access to
Chinese markets to US companies.

 

These talks are the first minister-level negotiations in more than two
months.

 

Many trade experts have low expectations for the talks, suggesting an
interim deal might be possible, while a major agreement is unlikely.

 

"I think both sides have an impetus to get to that table. The question is
whether there can be a mini-deal that comes out of it. Certainly nothing
comprehensive," said Sherry Madera, a former Minister-Counsellor at the
British Embassy in Beijing.

 

Former Deputy Assistant US Trade Representative Matt Gold said that if the
talks went well, China might make additional agricultural purchases and the
US might push back its planned tariff hike.

 

But he said neither Chinese President Xi Jinping nor US President Donald
Trump seem to think ending their trade dispute is urgent.

 

For Mr Trump, it is an issue he can use in the upcoming Presidential
election, while for Mr Xi, it's a waiting game, Mr Gold said.

 

"He wants to see Donald Trump fail and he's willing to dig in his heels to
make it happen."--BBC

 

 

 

Nigeria seeks $62 bln from oil companies -attorney general

LAGOS (Reuters) - Nigeria is seeking $62 billion from oil companies under
regulations that allow the government to revisit revenue-sharing deals on
petroleum sales if crude prices exceed $20 a barrel, the attorney general
told Reuters on Thursday.

 

The government in Africa’s largest oil exporter relies on oil for some 90%
of foreign exchange. Oil prices rose to more than $100 a barrel in 2014
before a sharp drop that triggered a 2016 recession in Nigeria, leaving the
government struggling to fund its budgets.

 

A law dating back to the 1990s that governs oil production sharing contracts
allows the government to review revenue sharing once the oil price rises
above $20 per barrel.

 

Abubakar Malami, the attorney general, said Nigeria had been “short-changed”
under the law and was pursuing a case for recovery if it was established
that the oil companies had under-paid the government.

 

“Computing the amount that should be credited to the Nigerian government if
the law was effectively applied, that translates to around $62 billion
against the IOCs (international oil companies),” said Malami in a telephone
interview.

 

“All options are on the table and there is no limit to what we can do in
terms of engagement, in terms of settlement, if the need arises,” said
Malami. He declined to name the oil companies involved in the matter.

 

Earlier this year, industry and government sources told Reuters that Royal
Dutch Shell, Chevron, Exxon Mobil and Eni, were each asked to pay the
central government between $2.5 billion and $5 billion.

 

The oil companies were not immediately available for comment.

 

President Muhammadu Buhari on Tuesday presented a record 10.33 trillion
naira ($33.8 billion) budget for 2020 to lawmakers. He has repeatedly rolled
out record spending plans but struggled to fund them due to lower oil output
and an inability to boost non-oil exports.

 

 

 

Zambia says owes major mining firms $215 million in tax refunds

LUSAKA (Reuters) - Zambia owed major mining companies 2.8 billion kwacha
($215 million) in tax refunds as at June 30, 2019, Finance Minister Bwalya
Ng’andu said on Thursday, the latest development in a long-running dispute
with the miners.

 

In December, the Zambian government withheld payment, saying the correct
documentation had not been provided.

 

The government has verified that it owed the companies 2.834 billion kwacha
in Value Added Tax (VAT) refunds although the mining firms were claiming an
additional 4.955 billion kwacha without providing evidence, Ng’andu said.

 

He was responding to a question in parliament on the unpaid tax refunds to
local mining firms majority owned by Glencore, Vedanta Resources, First
Quantum Minerals and Barrick Gold.

 

Ng’andu said the government planned to meet the affected mining companies
and agree how the outstanding refunds would be paid.

 

($1 = 13.1500 Zambian kwacha)

 

 

 

World Bank sees Algeria's 2019 GDP growth at 1.3%

ALGIERS (Reuters) - The World Bank said on Thursday it expected Algeria’s
economy to grow by 1.3% this year, down from 1.5% in 2018 and lower than the
government’s forecast of 2.6%, due to “political uncertainty”.

 

A political crisis following mass protests has hurt the OPEC member
country’s economy, which relies heavily on oil and gas.

 

 

“Delays in ending the political deadlock and policy uncertainty could
further harm the country’s economy,” the bank said in a country note, part
of its regional economic update.

 

“As economic activity is expected to be impacted by the political course, it
is also expected that more resources will be directed to social measures, at
the expense of public investment spending”.

 

Algeria plans to cut public spending by 9.2% and keep subsidy policy
unchanged in 2020, while seeking foreign loans to fund economic projects and
cope with pressure on state finances.

 

 

 

South African rand stronger as dollar dips, stocks up

JOHANNESBURG (Reuters) - South Africa’s rand firmed on Thursday, as the
dollar retreated on global markets, with safe-haven demand for the U.S.
currency waning as investors grew optimistic about a trade deal between the
United States and China.

 

At 1530 GMT, the rand traded at 15.0650 versus the dollar, 0.72% stronger
than its previous close.

 

“USD/ZAR15.00 is a viable breaking point if the US-Sino trade negotiations
prove meaningful yet should the discourse crumble, moves to the upside will
be far more severe,” RMB analyst Nema Ramkhelawan-Bhana said in a note.

 

The dollar index, a gauge of the greenback’s value against six major
currencies, was on track for its biggest daily drop in five weeks.

 

Chinese Vice Premier Liu He said on Thursday China is willing to reach an
agreement with the United States on matters that both sides care about so as
to prevent friction from leading to any further escalation.

 

Trade talks between the two countries started on Thursday.

 

On the stock market, the Top-40 index closed 1.49% higher at 49,032 points
while the broader all-share was up 1.33% to 55,060.

 

Shares in cement company PPC Ltd jumped more than 6% to 3.80 rand after the
firm said that Chief Financial Officer Tryphosa Ramano, who was also an
executive director, will step down on Oct. 31.

 

In fixed income, the yield on the benchmark government bond due in 2026
dipped 1.5 basis points to 8.225%.

 

 

 

World Bank sees Egypt economy growing 5.8% in 2019/20

CAIRO (Reuters) - The World Bank forecast on Thursday that Egypt’s economy
would grow by 5.8% this fiscal year, marginally lower than the government’s
target of 5.9% but in line with the bank’s expectation six months ago.

 

The World Bank inched up its growth estimate for Egypt’s gross domestic
product (GDP) in the last fiscal year to 5.6% from 5.5%, matching the
government’s figure. Egypt’s fiscal year starts on July 1.

 

“Egypt is sustaining its robust growth, fiscal outturns are improving, and
external accounts are stabilizing at broadly favorable levels,” the
institution said in a country note accompanying its regional economic
update.

 

The bank expects growth to rise to 6% in the fiscal year 2020/2021, assuming
that macroeconomic reforms continue and the business environment improves.

 

The gas, tourism, wholesale and retail trade, real estate and construction
sectors have been the main drivers of growth, the note said. Net exports of
goods and services inched up, private investment increased and unemployment
decreased.

 

However, 39% of the working age population remains unemployed, it noted,
“indicating relatively weak private sector job-creation”.

 

Rabah Arezki, World Bank chief economist for the Middle East and North
Africa, said Egypt needed to “level the playing field” between the public
and private sectors, especially when it came to access to credit.

 

Credit extended to private enterprise was only 22% of total domestic credit
in fiscal year 2018/2019, the note said.

 

“It is important for Egypt to consider the importance of competitive
neutrality as a tool to catalyse a genuine private sector development,”
Arezki told reporters on a conference call on Wednesday.

 

Analysts have hailed a range of positive economic data in Egypt, including
falling inflation, improving primary and budget balances, a strengthening
currency and decreasing debt.

 

“However, non-oil exports remain sluggish,” the note said. “FDI also
remained modest and predominantly directed to hydrocarbons.”

 

Egypt is at the end of a three-year economic reform programme tied to a $12
billion loan from the International Monetary Fund, which has been disbursed
in full.

 

Egyptians have complained that they have not felt the benefits of improving
economic indicators.

 

Millions live in poverty, and many more have struggled to get by after the
government devalued the Egyptian pound by about half in 2016, slashed energy
subsidies and introduced a value-added tax.

 

 

 

Egypt's annual urban consumer inflation falls to 4.8% in Sept as reforms
bite

CAIRO (Reuters) - Egypt’s annual urban consumer price inflation decreased to
4.8% in September from 7.5% in August, the statistics office said on
Thursday, slowing to its lowest level in almost seven years and paving the
way for more interest rate cuts.

 

Inflation has been easing in recent months as Egypt approaches the end of an
IMF-backed economic reform programme that during 2017 saw the annual
inflation rate rise to 33%.

 

The IMF reforms helped the government get its budget deficit under control,
precluding the need to expand the money supply. This in turn has reduced
inflationary pressures.

 

The Arab country hiked domestic fuel prices in July as part of the terms of
the agreement.

 

Radwa El-Swaify, head of research at Cairo-based Pharos Securities
Brokerage, said inflation had fallen mainly due to food prices such as
vegetables increasing less than expected.

 

Inflation should fall again in October but rise in November due to a base
effect from last year’s figures, she said.

 

Last month, the central bank, citing “the moderation of underlying
inflationary pressures”, lowered its key interest rates for a second month
in a row, bringing cuts since August to 2.5% percent.

 

“The very low in inflation numbers in September and October might open the
door for tiny 0.5 or 1 percent cut but .... depending on global market
dynamics,” Swaify added.

 

 

 

 

S&P Global says no immediate pressure on South Africa rating

JOHANNESBURG (Reuters) - Ratings agency S&P Global’s South Africa analyst
said on Thursday there was no immediate pressure to change the country’s
sovereign rating, despite weak economic growth and a growing debt burden.

 

Africa’s most industrialised economy is ranked at sub-investment grade by
S&P and Fitch, two of the three main ratings firms, with recent downgrades
linked mainly to the weak economy, bailouts for state firms and concerns
about governance and corruption.

 

S&P Global’s long-term foreign-currency rating for South Africa’s debt is
‘BB’. Its stable outlook is one reason why analyst Gardner Rusike told a
ratings conference that the rating was unlikely to change soon.

 

“We don’t believe that there is immediate pressure to change the ratings in
the near term,” Rusike said.

 

He added that S&P Global saw South Africa’s economic growth rate this year
at below 1% and would look for measures to contain fiscal slippage in the
finance ministry’s medium-term budget statement on Oct. 30.

 

Rusike said a recent government bailout to state power firm Eskom would put
pressure on the budget deficit but that as a once-off event it did not pose
a danger to the country’s sovereign rating.

 

 

Tanzania gold export earnings up 25% in year to August -central bank

DAR ES SALAAM (Reuters) - Tanzania’s earnings from gold exports rose 25.1%
in the year to August, buoyed by higher output of the precious metal, its
central bank said on Thursday.

 

Gold exports fetched $1.91 billion in the year ending August 31, up from
$1.53 billion the previous year.

 

“Gold export rose by 25.1 percent ... driven by volume, and accounted for
more than half of non-traditional exports,” the Bank of Tanzania said in its
latest monthly economic report.

 

    It did not give figures for export volumes.

 

    Africa’s fourth-biggest gold producer after South Africa, Ghana and Mali
hopes its mining sector will rebound after a tax crackdown and overhaul of
its mining code in 2017 spooked foreign investors.

 

    Tanzanian President John Magufuli, who took office in late 2015, is
pushing for more revenue from the sector, which is a relatively small
contributor to national output.

 

    In 2017, the government passed laws the industry complained would be
costly and onerous.

 

    Among the measures were higher taxes on mineral exports, mandated a
higher government stake in some mining operations, and forced the
construction of local smelters, a move some companies saw was uneconomic.

 

    Tanzania’s current account deficit widened 30.9% in the year to August,
underpinned by an increase in imports.

 

    The gap widened to $2.18 billion in the 12 months to August from $1.67
billion in the same period in 2018.

 

 

    Imports of goods and services rose 6.1% to $10.52 billion, while total
exports rose slightly to $8.77 billion from $8.71 billion previously, the
bank said.

 

    Earnings from tourism, the main source of foreign exchange, rose to
$2.34 billion from $2.32 billion previously, helped by more visitor
arrivals.

 

 

 

 

 


 

 


 

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
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