Major International Business Headlines Brief::: 12 September 2019

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Major International Business Headlines Brief::: 12 September 2019

 


 

 


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*  South Africa's August business confidence lowest in 34 years-SACCI

*  Naspers spin-off Prosus surges 25% on market debut in Amsterdam

*  Zimbabwe sets up monetary policy committee to boost confidence

*  Purdue Pharma 'reaches tentative agreement' to settle opioid cases

*  Uber says 'gig economy' law will not hurt business

*  China scraps some US tariffs ahead of trade talks

*  Trump plans ban on sale of flavoured e-cigarettes

*  California passes landmark gig economy rights bill

*  South Africa's Aspen posts FY earnings decline, pays no dividend

*  Ivory Coast, Ghana looking to regulate cocoa industry's sustainability
schemes - sources

*  London Stock Exchange gets £32bn Hong Kong bid

*  Zambia central bank opposes bid to remove oversight of public debt

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

South Africa's August business confidence lowest in 34 years-SACCI

JOHANNESBURG (Reuters) - South African business confidence fell to its
lowest level in 34 years in August, as a sharp drop in export volumes and a
weaker currency aggravated already tough economic conditions, a survey
showed on Wednesday.

 

The South African Chamber of Commerce and Industry’s monthly business
confidence index (BCI) fell to 89.1 in August from 92.0 in July, the lowest
level since the inception of the index in April 1985 when the measure was at
88.1, the business body said.

 

“We’re not talking about the same set of circumstances as back then, but you
are seeing a similar economic climate,” said SACCI economist Richard
Downing.

 

“This time the main thing is the difficulty government is having in
implementing what needs to be done”.

 

Seven of the thirteen sub-indices in the BCI deteriorated between August and
July, four improved, while two remained unchanged, SACCI said.

 

Merchandise export volumes, the exchange rate weighted against major trading
and investment currencies, and share prices on the Johannesburg Securities
Exchange were the most negative contributors.

 

Africa’s most industrialised economy recorded a surprise 3.1% expansion in
the second quarter after contracting by the same margin in the first quarter
following a sector-wide slowdown driven by power outages.

 

But the economic growth outlook remains meek amid lack of clarity and
progress on reforms.

 

On Tuesday ratings firm Moody’s, the last of the top-three credit agencies
to rate the country’s sovereign debt at investment grade, warned of the risk
of ongoing uncertainty and the slow pace of reforms, especially at
cash-strapped power utility Eskom.[nL5N261288]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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Naspers spin-off Prosus surges 25% on market debut in Amsterdam

AMSTERDAM (Reuters) - Shares in the spin-off of South African e-commerce
group Naspers surged more than 25% in the first minutes of their market
debut in Amsterdam on Wednesday.

 

 

Prosus comprises Naspers’ global empire of consumer internet assets, with
the jewel in the crown a 31% stake in Chinese tech titan Tencent.

 

There is “way more demand than is even available, so that’s good,” said the
CEO of Euronext Amsterdam, Maurice van Tilburg. “It’s going to be an
interesting hour of trade after opening this morning.”

 

Euronext had given an indicative price of 58.70 euros per share for Prosus,
implying a market value of 95.3 billion euros ($105 billion).

 

The shares jumped to 76 euros on opening and were trading at 75 euros at
0719 GMT.

 

The spin-off in Amsterdam marks the end of an era for Naspers as it looks to
move beyond the legacy of former Chief Executive Koos Bekker’s prescient
investment of just $34 million in Tencent when it was a startup in 2001, one
of the most lucrative bets in corporate history.

 

The stake in Tencent, the world’s biggest videogame company and home to
China’s hugely popular WeChat social media platform, is now worth $130
billion and has buttressed Naspers’ rapid growth towards becoming Africa’s
most valuable listed company.

 

That would make Prosus the third-largest stock on the Amsterdam exchange
after Shell and Unilever, and Europe’s No.2 tech firm after Germany’s SAP.

 

European players are still, however, dwarfed by the likes of Facebook and
Amazon in the United States.

 

The Tencent stake has been worth more than Naspers itself for years, and
dominated the $103 billion group’s finances. One motivation for spinning off
Prosus is to narrow that value gap.

 

The Prosus listing should see about a quarter of Naspers’ value move to
Amsterdam.

 

“We believe Prosus will present a new and attractive opportunity for global
tech investors to access our unique portfolio of internet businesses,
providing a strong foundation for our future growth plans,” said Naspers’
CEO Bob van Dijk.

 

“The listing is also designed to reduce our weighting on the Johannesburg
Stock Exchange, which we believe will maximise shareholder value over time.”

 

Naspers will retain a stake of about 25% in Prosus, with the other 25%
distributed to Naspers shareholders and making up the free float.

 

FOOD DELIVERY FIRMS

Prosus also has stakes in fast-growing food delivery, social media and
payments companies in China, India, Brazil and Russia. [See Factbox:
nL5N26118H]

 

In the food and delivery sector, it owns stakes in Delivery Hero,
Takeaway.com, Latin America’s iFood, and India’s Swiggy.

 

For the fiscal year ended in March 2019, Prosus reported a 15% rise in
revenue to $2.65 billion, and its operating loss narrowed to $418 million
from $615 million.

 

Prosus accounts for its Tencent stake as an “equity accounted investment”,
which added $3.41 billion euros to 2019 pre-tax profit.

 

Prosus’ net profit ended up being $4.25 billion, thanks to a $1.6 billion
windfall on its sale of a 10% stake in Flipkart to Walmart.

 

Jasper Jansen, an analyst at the Dutch shareholders’ rights group VEB, said
he welcomed the listing of Prosus.

 

“We love the fresh blood - finally there’s a real company listing here
that’s active in the new economy,” he said.

 

However, he criticized Naspers’ decision to maintain a two-class share
structure system which gives its biggest shareholders extra voting rights in
some circumstances.

 

($1 = 0.9055 euros)

 

 

 

Zimbabwe sets up monetary policy committee to boost confidence

HARARE (Reuters) - Zimbabwe has appointed a monetary policy committee (MPC)
at its central bank as part of a set of reforms aimed at removing economic
distortions and boosting confidence in policymaking, the finance ministry
said.

 

The nine-member MPC includes central bank governor John Mangudya, two deputy
governors, university professor Ashok Chakravarti and former opposition
politician Eddie Cross.

 

Its appointment, which came into force on Tuesday, comes as Zimbabwe is in
an economic crisis, with triple-digit inflation, daily power cuts and a
severe drought piling pressure on President Emmerson Mnangagwa’s government.

 

Steps taken this year towards relaunching the Zimbabwean dollar after a
decade of dollarisation have increased people’s hardships, but financial
policymakers insist they are necessary to lay the foundations for future
growth.

 

“The appointment of the monetary policy committee will ensure broader
consultation about interest rates,” senior finance ministry official George
Guvamatanga told Reuters.

 

The MPC’s mandate is expected to include ensuring price stability and
determining the limits for the Reserve Bank of Zimbabwe’s open market
operations, Guvamatanga said.

 

It is not yet clear when the MPC will meet for the first time. In June, the
central bank hiked the interest rate on its overnight window to 50% to
buttress the interim RTGS currency.

 

 

Purdue Pharma 'reaches tentative agreement' to settle opioid cases

Drug-making giant Purdue Pharma has reportedly reached a tentative
multi-billion dollar agreement in the US to settle a host of lawsuits
against it.

 

The firm owned by the billionaire Sackler family is accused of helping fuel
the US opioid crisis through drugs like painkiller OxyContin.

 

The deal would remove Purdue from the first federal trial over the opioids
crisis, set to open in Ohio in October.

 

But the company could still face legal battles with states not in the deal.

 

Connecticut, Iowa, Massachusetts, Nevada, New Jersey, New York,
Pennsylvania, North Carolina and Wisconsin are among those states saying
they are not party to the agreement, the Associated Press reports.

 

The reported settlement is expected to be the largest ever paid out by an
opioid manufacturer.

 

What is in the deal?

Purdue Pharma has been in negotiation to settle a case brought against it by
more than 2,000 plaintiffs - including half the states, local governments
and Native American tribes.

 

US media report the deal would involve the Sacklers exiting the company
before it would file for bankruptcy, dissolve and reform.

 

Profits from the business would then be directed to pay plaintiffs an amount
- thought to be around $10bn-12bn (£8bn-10bn) - as well as donating drugs
for addiction and overdose recovery, multiple reports say.

 

What are opioids and what are the risks?

Why opioids are such an American problem

The teachers battling opioid overdose fears

Are the Sacklers the most hated family in America?

The Sackler family are expected to directly contribute at least $3bn of
their own personal fortune to the deal, according to the reports.

 

The tentative agreement is thought to have the support of 23 states and
about 2,000 local governments - but falls short of the national settlement
Purdue had been seeking, according to the Washington Post newspaper.

 

Image caption

Opioid-related deaths have risen dramatically in recent years

A number of state attorney generals have publicly pledged to continue their
legal fight against the firm.

 

"This apparent settlement is a slap in the face to everyone who has had to
bury a loved one due to this family's destruction and greed," said Josh
Shapiro, Pennsylvania's top lawyer.

 

"It allows the Sackler family to walk away billionaires and admit no
wrongdoing."

 

What is the opioid crisis?

Opioids are a group of drugs that range from codeine to illegal drugs like
heroin. Prescription opioids are primarily used for pain relief but can be
highly addictive.

 

On average, 130 Americans die from an opioid overdose every day, according
to the US Center for Disease Control and Prevention, which says more than
200,000 Americans have died from opioid-related overdoses in the last two
decades.

 

Purdue is one of the opioid makers, distributors and pharmacies named in
more than 2,000 lawsuits represented in the federal trial scheduled to begin
in Ohio next month.

 

The cases allege the companies are responsible for fuelling an opioid
addiction crisis in the US.

 

Firms including Purdue are accused of using deceptive practices to sell
opioids including downplaying their addictive quality.

 

Purdue argued the US regulator, the Food and Drug Administration, had
approved labels for OxyContin that had warnings about the risks.

 

In a separate case, Drugmaker Johnson & Johnson was ordered by a US judge to
pay $572m for its part in fuelling Oklahoma's opioid addiction crisis last
month. Purdue had already settled with the state for $270m earlier this
year.

 

Who are the Sackler family?

Brothers Arthur, Mortimer, and Raymond Sackler were all doctors from
Brooklyn, New York, who in the early 1950s bought a medicine company called
Purdue Frederick which would become Purdue Pharma.

 

Today, the Sacklers' fortune is estimated at about $13bn. The family are
prolific philanthropists and their name adorns a wing of the cultural
buildings around the world - including the Louvre in Paris.

 

As the opioid scandal has engulfed the family, a number of high-profile
museums - including the Tate in the UK - have announced they will no longer
take money from the family.

 

The Sacklers have argued they were passive board members of Purdue Pharma,
who approved routine management requests and were not involved with the
marketing of OxyContin.--BBC

 

 

Uber says 'gig economy' law will not hurt business

Uber has insisted a new Californian law will not force it to change how it
treats its drivers.

 

Lawmakers passed Assembly Bill 5 (AB5) on Tuesday, a move designed to pave
the way for so-called “gig workers” to become employees and gain additional
rights.

 

But Uber told reporters it “strongly believed” it met the new law’s
requirements for legally classifying workers as “contractors” instead.

 

Nevertheless, the firm said it had, along with rival ride-sharing service
Lyft, invested $60m (£49m) in campaigning for alternative measures to be
introduced.

 

Uber said in a conference call on Wednesday it was prepared to spend more,
and had hired the “best campaign team available”.

 

AB5 passed California's Senate 92 votes to 11 late on Tuesday night, and is
expected to be signed into law by state governor Gavin Newsom imminently.

 

The bill could have big implications not just for rideshare firms, but other
app-based services offering “gigs” to workers, such as DoorDash and
Postmates.

 

Shirked responsibility

 

In an opinion piece for the Sacramento Bee newspaper earlier this month,
Governor Newsom endorsed the bill, saying companies such as Uber - today
valued at $56bn - were abusing employment law and making working people
worse off.

 

“Workers lose basic protections like the minimum wage, paid sick days and
health insurance benefits,” he wrote. “Employers shirk responsibility to
safety net programs like workers’ compensation and unemployment insurance.
Taxpayers are left to foot the bill.”

 

AB5 demands that workers be considered employees unless companies can prove
the worker is “free from the control and direction of the hiring entity in
connection with the performance of the work”.

 

Critics of gig economy firms say app-based work - which assigns jobs and
attaches a rate of pay - mean workers are not “free from control”. The
companies, however, argue that because workers can determine when they work,
where they work and for how long, they are “free”.

 

AB5 will force Uber and other firms like it to go through what’s known as
the ABC test, which assesses the question of whether or not companies can
consider their workers contractors rather than employees.

 

“Just because the test is hard doesn’t mean that we will not be able to pass
it,” said Tony West, Uber’s top lawyer, on Wednesday.

 

Limiting flexibilty

 

The firm’s confidence will likely be tested when AB5 comes into force on 1
January 2020. Under the law, cities in California can sue Uber (or other
gig-economy firms) directly if they feel the firm is not complying -
previously it was up to individual drivers.

 

Analysts have predicted devastating consequences for gig economy firms’
bottom line if they are forced to reclassify workers into employees. When
asked, Uber would not offer any guidance to investors over how damaging such
a change would be. The firm lost just over $5.2bn in its last reported
quarter. Lyft, valued at $15bn, lost $2.3bn in the same period.

 

The companies warned they would look to implement more traditional work
patterns.

 

“Flexibility of drivers would be limited,” Uber’s Mr West said.

 

“Drivers would not be able to choose to sign on when they wanted. Not only
would they have to work shifts, they would be deployed to areas, rather than
choosing where to pick up a fare.”

 

He added: “Based on what drivers tell us, they are not changes they would
welcome.”

 

Media captionUber drivers in Nairobi explain why they are going on strike

Instead, Uber - along with Lyft - has proposed drafting alternative
legislation as a compromise. It would guarantee a minimum wage of $21 per
hour, and offer the chance for sectoral collective bargaining, allowing
workers across the rideshare industry to band together in negotiations.

 

The compromise, yet to be drafted, does not look likely to sway California’s
lawmakers.

 

“Billionaires who say they can’t pay minimum wages to their workers say they
will spend tens of millions to avoid labour laws,” Ms Gonzalez wrote on
Twitter last week.

 

“Just pay your damn workers!” she added.--BBC

 

 

China scraps some US tariffs ahead of trade talks

China has released a list of 16 US imports that will be exempted from
tariffs in the ongoing trade war between the world's two largest economies.

 

They include anti-cancer drugs and animal feed.

 

But with more than 5,000 products on it, the list of goods that are still
subject to extra taxes is much longer.

 

Nevertheless, some analysts view the move as a friendly signal by China
ahead of talks with the US.

 

On Tuesday, US President Donald Trump praised the decision, saying the
"gesture" could help upcoming trade talks.

 

Preliminary meetings are set to take place later this month in Washington
before US treasury secretary Steven Mnuchin and trade representative Robert
Lighthizer meet China's vice premier Liu He in October.

 

"They made a couple of moves last night that were pretty good," Mr Trump
said. "I think they did the right thing."

 

Significant US exports to China, like pork, soybeans and American-made cars,
are among the goods that will still be hit by the hefty taxes.

 

And ING's China economist Iris Pang noted that the exemptions will help
China's own economy.

 

"There are still many uncertainties in the coming trade talks," she wrote in
a note. "An exemption list of just 16 items will not change China's stance."

 

Over the past year, the world's two largest economies have imposed tariffs
on billions of dollars worth of one another's goods.

 

A quick guide to the US-China trade war

Trump's regrets on China trade war 'misunderstood'

Donald Trump has long accused China of unfair trading practices and
intellectual property theft, while in China, there is a perception that the
US is trying to stymie its growth.

 

Mr Trump's tariffs policy aims to encourage consumers to buy American by
making imported goods more expensive.

 

So far, the US has imposed tariffs on more than $360bn (£296bn) of Chinese
goods, and China has retaliated with tariffs on more than $110bn of US
products.

 

Washington delivered three rounds of tariffs last year, and a fourth one in
September. The latest round targeted Chinese imports, from meat to musical
instruments, with a 15% duty.

 

Beijing has hit back with tariffs ranging from 5% to 25% on US goods.

 

The US has also granted exemptions to the tariffs, including exempting items
like medical equipment and parts.--BBC

 

 

 

Trump plans ban on sale of flavoured e-cigarettes

US President Donald Trump has announced that his administration will ban
flavoured e-cigarettes, after a spate of vaping-related deaths.

 

Mr Trump told reporters vaping was a "new problem", especially for children.

 

US Health Secretary Alex Azar said the Food and Drug Administration (FDA)
would finalise a plan to take all non-tobacco flavours off the market.

 

There have been six deaths and 450 reported cases of lung illness tied to
vaping across 33 states.

 

Many of the 450 reported cases are young people, with an average age of 19.

 

Michigan this month became the first US state to ban flavoured e-cigarettes.

 

What's behind a vaping illness outbreak in the US?

Joining Mr Trump at the White House on Wednesday, Mr Azar said it would take
the FDA several weeks to distribute the new guidance on e-cigarettes.

 

Media captionPresident Donald Trump: 'People are dying with vaping'

He also said the agency would take enforcement action if it determined
children were being intentionally attracted to e-cigarettes.

 

US First Lady Melania Trump this week tweeted that she was "deeply concerned
about the growing epidemic of e-cigarette use in our children".

 

Mr Trump told reporters his administration would implement strong rules to
protect "innocent children", including his 13-year-old son Barron.

 

"We can't allow people to get sick and we can't have our youth be so
affected," he said.

 

"That's how the first lady got involved. She's got a son, together, that is
a beautiful young man and she feels very, very strongly about it.

 

"She's seen it. We're both reading it, a lot of people are reading it. But
people are dying with vaping so we're looking at it very, very closely."

 

He added that he hoped the announcement would make parents become "tougher".

 

"People are going to watch what we're saying and parents are going be a lot
tougher with respect to their children," said the president.

 

"A lot of people think vaping is wonderful, it's great. It's really not
wonderful."

 

Juul 'ignored law' in US e-cigarette adverts

In a press release shortly after Mr Trump's announcement, the health
secretary said officials "will not stand idly by" as a generation becomes
addicted to nicotine.

 

Acting FDA Commissioner Dr Ned Sharpless said "if we see a migration to
tobacco-flavored products by kids, we will take additional steps to address
youth use of these products".

 

E-cigarette manufacturers such as Juul have been blamed for fuelling
childhood addiction through flavoured products such as mango, cream or
cinnamon roll.

 

Juul, which dominates the market, last year stopped selling most of its
flavoured devices in order to defuse mounting criticism.

 

Health officials are still investigating whether a particular toxin or
substance is causing the vaping-related illnesses, or whether it's the
result of heavy usage.

 

The first death occurred in Illinois in late August. Since then, five more
have died and hundreds have been sickened across 33 states.

 

The cause of the vaping illness has not yet been pinpointed by health
officials.

 

THC, the psychoactive chemical in cannabis, was present in some, but not all
of the devices used by those who fell ill, say authorities.

 

The FDA has said many of the products were found to contain significant
amounts of vitamin E acetate, an oil used to thicken the vaping liquid.

 

Several patients have been found with lipoid pneumonia, which occurs when
someone inhales fats or oils.--BBC

 

 

 

California passes landmark gig economy rights bill

California lawmakers have passed a bill that paves the way for gig economy
workers to get holiday and sick pay.

 

Assembly Bill 5, as its known, will affect firms like Uber and Lyft, which
are based in California and depend on those working in the gig economy.

 

Some estimates suggest costs for those firms would increase by 30% if they
have to treat workers as employees.

 

But opponents of the bill say it will hurt those people who want to work
flexible hours.

 

The rise of the gig economy, where people accept work on a per job basis,
has spawned a swathe of mobile apps, normally putting people in touch
directly with drivers or riders.

 

But fears that tech firms like Uber or DoorDash, a food delivery company,
are exploiting their scale to erode workers' rights have caused lawmakers to
look at how to protect those workers.

 

In California, Assembly Bill 5 would put into law a judgement from the
state's supreme court last year that created a new test for whether a worker
should be considered an employee.

 

Employee status can entitle them to benefits like health care, minimum wage
and paid time off. That would change the nature of the gig-economy, which
has been a cornerstone of the model adopted by a raft of valuable new
companies.

 

But California state senator Maria Elena Durazo said underpaying workers
wasn't innovative.

 

It's not just tech firms in California that are worried about the proposed
change in law.

 

Contracting work has taken hold in many industries and California has often
led the way in introducing legislation that is adopted elsewhere in the US.

 

"People ought to be very concerned because what happens here does tend to
get copied in other states," Joseph Rajkovacz, director of governmental
affairs for the Western States Trucking Association, which represents truck
drivers, many of whom are temporary and freelance workers, told Reuters.

 

It's still not clear how the bill will be implemented.

 

US Democratic presidential hopefuls Elizabeth Warren, Bernie Sanders and
Kamala Harris have all come out in support of the bill, which is backed by
California Governor Gavin Newsom, whose signature is required to turn it
into law.

 

But on Tuesday, Mr Newsom told the Wall Street Journal that he planned to
continue negotiating with companies hoping to be exempted from the bill.

 

Uber and Lyft have both proposed a referendum on the decision and put $90m
aside to lobby for that.

 

In a statement after the bill was passed, Lyft said: "We are fully prepared
to take this issue to the voters of California to preserve the freedom and
access drivers and riders want and need."

 

In the UK, Uber lost its bid to convince the Court of Appeal that its
workers weren't staff. It asked the court to overturn an employment tribunal
decision that Uber drivers be treated as workers rather than self-employed.

 

The tribunal ruled that two drivers were staff and entitled to holiday pay,
paid rest breaks and the minimum wage.

 

The business models of gig economy companies are already under strain - Uber
lost more than $5bn in the last quarter alone.

 

Some estimates suggest that having to treat workers as employees, rather
than independent contractors, could increase costs by as much as 30%.

 

Uber and rival ridesharing service Lyft joined forces to push back again the
bill.

 

They suggested a guaranteed minimum wage of $21 per hour instead of the
sweeping changes the bill would bring.

 

But that pledge wasn't enough to sway California's Senate, and the state's
governor Gavin Newsom is expected to soon sign the bill into law.

 

That paves the way for California's 1 million gig workers to gain added
rights next year.

 

--BBC

 

 

 

South Africa's Aspen posts FY earnings decline, pays no dividend

JOHANNESBURG (Reuters) - South African drugmaker Aspen Pharmacare Holdings
said on Wednesday full-year core normalised earnings fell by 4% due to a
lower contribution from its manufacturing business and it will not pay a
dividend this year.

 

Normalised earnings before interest, tax, depreciation and amortization
(EBITDA) declined to 10.8 billion rand ($733.19 million) from a restated
11.2 billion rand, the firm said in a statement. The figure is in constant
exchange rates.

 

Aspen, which also operates in Europe, trimmed debt to 39 billion rand from
53.5 billion rand, thanks mostly to cash proceeds from disposal of its
infant formula business and a portfolio of products distributed in Asia
Pacific in the second half.

 

The leverage ratio, which assesses the ability of a firm to meet its
financial obligations, ended at 3.62x, “comfortably” below the covenant
threshold of 4.0x.

 

Investors have been concerned about Aspen’s rising debt for about a year,
when levels moved close to breaching debt covenants.

 

Normalised headline earnings per share (NHEPS) from continuing operations
fell by 8% to 14.14 rand from a restated 15.36 rand. In reported rates,
NHEPS fell by 7%.

 

Aspen did not declare an annual dividend, saying it has taken into account
its prioritisation of deleveraging the balance sheet, existing debt service
commitments during the 2020 financial year and the short-term requirements
of the ongoing capital projects.

 

($1 = 14.7045 rand)

 

($1 = 14.7302 rand)

 

 

 

Ivory Coast, Ghana looking to regulate cocoa industry's sustainability
schemes - sources

ABIDJAN/LONDON (Reuters) - Ivory Coast and Ghana will meet major chocolate
makers and grinders in Abidjan on Wednesday to make plans to regulate the
industry’s efforts to source cocoa sustainably, multiple trade and
government sources told Reuters.

 

The plan comes after years of attempts by industry to self-monitor their
sustainable sourcing practices and wipe out the blight of child labour and
deforestation from the cocoa sector in West Africa.

 

Industry fears the new move might represent a major and costly overhaul of
the certification schemes they use to boost their brands in highly
competitive markets where both consumers and investors are growing
increasingly eco-conscious.

 

Ivory Coast and Ghana, who together produce two-thirds of the world’s cocoa,
have already imposed a fixed “living income differential” of $400 a tonne in
July on all cocoa sales for the 2020/21 season in a bid to tackle pervasive
farmer poverty and deforestation.

 

The move was a major overhaul in how cocoa is priced.

 

Still, the two west African neighbours are pressing ahead with a further
overhaul, sources say, setting their sights on the certification schemes
used by major chocolate makers and grinders like Mars, Mondelez, Barry
Callebaut and Nestle.

 

“We are going to discuss sustainability. Everything is not good. There are
things to review, for example, standards for certification. It must change,”
said a source at Ivory Coast’s Coffee and Cocoa Council (CCC), its cocoa
regulator.

 

Fiifi Boafo, spokeman for Ghana’s cocoa regulator Cocobod, said the meeting
with industry was aiming to “come out with improved strategies to work
towards sustainable cocoa production”.

 

The cocoa industry fears moves to regulate certification schemes could,
alongside the “living income differential”, substantially increase their
costs if, for example, Ivory Coast and Ghana impose a license on them for
running the schemes.

 

“Traders don’t want to commit (to paying the living income differential)
until the changes to certification schemes are clear. They want to know if
there are additional costs,” said another industry source.

 

Even a move to standardise the schemes is a concern for industry, who often
use self-certification schemes over third party ones like Fairtrade.

 

Companies have argued self-certification schemes can be more effective in
tracking whether a product is ethically sourced, although some analysts say
they have at times been used as a way to save money.

 

“We do not want (industry) alone (to) enact norms which favour them. We want
more control. (We want to) see how we can be more involved,” said a second
source at the CCC.

 

The cocoa industry’s efforts to source sustainably have been around for
nearly two decades, though little has changed on the ground for farmers,
with poverty widespread and forest cover, especially in Ivory Coast, all but
decimated.

 

According to the Cocoa Barometer, a major report published in 2018 by
international civil society groups, there are about 2.1 million children
working in the West African cocoa sector, a slight increase from levels seen
5 years ago.

 

Reports like these have prompted some lawmakers in the west to call time on
the cocoa industry’s efforts to self-monitor their sourcing practices,
opting to look instead at introducing legislation.

 

In July, two U.S. senators called for imports of cocoa made with forced
labour to be blocked, prompting Ivory Coast to urge them to desist from
punishing an entire industry for what it said were isolated cases.

 

Cocoa makes up 40% of Ivory Coast’s exports and the United States is the
third largest destination for Ivorian beans.

 

 

London Stock Exchange gets £32bn Hong Kong bid

The company that owns Hong Kong's main stock exchange has made a £32bn bid
to buy its rival in London.

 

Shares in the London Stock Exchange Group jumped by more than 15% on news of
the offer, but fell back later.

 

Hong Kong Exchanges and Clearing said in a statement that combining the two
exchanges would bring together "the largest and most significant financial
centres in Asia and Europe".

 

But it wants the LSE to scrap its plans to buy data firm, Refinitiv.

 

The deal would "redefine global capital markets for decades to come", said
Charles Li, chief executive of the Hong Kong company.

 

"Together, we will connect East and West, be more diversified and we will be
able to offer customers greater innovation, risk management and trading
opportunities," he added.

 

The LSE confirmed it had received an "unsolicited, preliminary and highly
conditional" offer from its Hong Kong rival and said it would make an
announcement in "due course".

 

'Strategic asset'

But analyst Neil Wilson, from Markets.com, described the proposed deal as a
"non-starter". He pointed to the LSE's share price after the announcement -
just more than £71 and well below the £83.61 offer price - a sign that
investors don't expect the deal to get over the line.

 

He said political considerations would be "front and centre".

 

"The UK government may not wish to see such a vital symbol of UK financial
services strength, and indeed a strategic asset, to be owned by foreigners,"
he said. "Effectively it would hand it over to the Chinese through the Hong
Kong back door."

 

One of the conditions of the offer from Hong Kong is that the LSE scraps its
proposed £22bn deal to buy data firm Refinitiv from its current owners,
which include Thomson Reuters and private equity house Blackstone.

 

But in its statement, the LSE said it "remains committed to and continues to
make good progress" with the deal.

 

In 2017, EU regulators blocked a proposed £21bn merger between the LSE and
Germany's Deutsche Boerse.

 

The European Commission said the deal would have created a "de facto
monopoly" for certain financial services.--BBC

 

 

 

Zambia central bank opposes bid to remove oversight of public debt

LUSAKA (Reuters) - Zambia’s central bank said on Wednesday it opposed
government moves to remove lawmakers’ oversight over acquiring more public
debt.

 

The government proposed constitutional changes in August to remove
lawmakers’ right to approve new government loans and the ratification of
international treaties - triggering an outcry from rights and opposition
groups.

 

The government has said the changes are needed to get loans and treaties
through when parliament is in recess. Opposition politicians have accused
President Edgar Lungu of trying to crack down on dissent - a charge
dismissed by the government.

 

The proposed changes come as the government has increased public debt -
drawing warnings from the International Monetary Fund.

 

“It is our considered view that National Assembly oversight is critical over
these important public functions in a democratic dispensation like ours,”
the Bank of Zambia said in a written submission to parliament released on
Wednesday.

 

A parliamentary committee is receiving submissions on the proposed
constitutional amendments before presenting a report to the full assembly
for debate.

 

The government requires a two-thirds majority in parliament to pass the
amendments. No date has been set for a vote.

 

The Law Association of Zambia has also taken the matter to the
constitutional court seeking to have the draft law withdrawn.

 

 

 

 

 


 

 


 

INVESTORS DIARY 2019

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


Companies under Cautionary

 

 

 


 

 

 

 


Bindura Nickel Corporation

 

 

 


Padenga Holdings

 

 

 


Delta Corporation

 

 

 


Meikles Limited

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 


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

 


 

 


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