Major International Business Headlines Brief::: 19 September 2019

[Bulls n' Bears]

 <http://www.bulls.co.zw/> Bulls.co.zw
<mailto:info at bulls.co.zw?subject=View%20and%20Comments> Views & Comments
<http://www.bulls.co.zw/blog> Bullish Thoughts
<http://www.twitter.com/BullsBears2010> Twitter
<https://www.facebook.com/BullsBearsZimbabwe> Facebook
<http://www.linkedin.com/pub/bulls-n-bears-zimbabwe/57/577/72> LinkedIn
<mailto:info at bulls.co.zw?subject=Unsubscribe> Unsubscribe

 


 

 


Major International Business Headlines Brief::: 19 September 2019

 


 

 


 <http://www.nedbank.co.zw/> 

 


 

 


 

 

*  Africa already converted into IMF's gospel, Kenyan central banker says

*  South African Airways cash injection imminent but says it needs more

*  South Africa's retail sales up 2.0% year/year in July

*  Ghana, Ivory Coast to introduce cocoa production ceiling

*  Kenyan lawmakers reject Treasury bid to repeal rate cap

*  Nigeria's central bank moves monetary policy meeting forward to Sept.
19-20

*  Malawi economy to grow 4.5% in 2019 -IMF

*  French-owned STAR group commits to maize audit in Madagascar

*  South African consumer inflation quickens to 4.3% year-on-year in August

*  South Africa’s first 5G network is now live in parts of Johannesburg and
Tshwane – here’s what you’ll pay

*  US Fed cuts interest rates for second time since 2008

*  Trump strips California of power to set auto emission standards

*  Burger King ditches free toys and will 'melt' old ones

*  British Airways pilots call off next week's strike

*  Cobham: National security fears threaten defence takeover

*  India e-cigarettes: Ban announced to prevent youth 'epidemic'

*  Inflation surprise as computer game prices drop

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

Africa already converted into IMF's gospel, Kenyan central banker says

NAIROBI (Reuters) - Africa has embraced sound economic policies and even the
political class has started to appreciate the importance of such policies,
Kenya’s central bank governor said on Wednesday.

 

Although some economies in the 54-nation continent have recorded some of the
fastest economic growth rates in recent years, critics say some policies
need to be changed to deepen the growth and make it inclusive.

 

“Good policies are good for the economy, they are good for the people,”
Patrick Njoroge told an investor forum in Nairobi that was organised by
Renaissance Capital.

 

“There is a greater acceptance and indeed appreciation of that ... There is
no preaching by the IMF or what you call the Washington consensus. We are
already converted in terms of solid policies.”

 

Kenya embraced a free market economy in the 1990s, opening up its capital
markets to foreign investment without any restrictions. It also has a
free-floating foreign exchange regime and a diversified economy that is
underpinned by farm exports like tea and coffee, as well as tourism.

 

The International Monetary Fund has in the past gotten into confrontations
with some African governments due to its policy prescriptions that were
sometimes deemed as too painful, such as spending cuts and reduction of
public wage bills.

 

Njoroge, who was a senior IMF adviser in Washington before taking his
current job in 2015, said the growing appreciation of the need for good
economic policies was spreading even to the ruling class, citing low fiscal
deficits and central bank independence.

 

“Those are things they may not fully accept, but for the most part they
understand that we need to pursue positive policies and indeed strong
policies,” he said.

 

Kenya, where inflation expectations are well-anchored, was a good
representation of what is happening on the continent, he said.

 

Year-on-year inflation stood at 5.0% last month, at the mid-point of the
government’s preferred band of 2.5-7.5%.

 

He said the main threat to the outlook for inflation was the fluctuating
price of oil, adding that policymakers had adequate tools and experience to
deal with the threat.

 

Kenya’s shilling currency has been the most stable this year among its
Sub-Saharan Africa peers and Njoroge attributed that to a drop in the
current account deficit, which stands at 4.2% of GDP, down from 10.4% four
years ago.

 

“We expect it to remain at about 5% of GDP ... that is a stable thing and it
can be completely financed by foreign flows, FDI, portfolio investments,” he
said.

 

Kenya’s government has been criticised for imposing caps on commercial
lending rates, leading to a squeeze on private sector credit growth, but
Njoroge said those were temporary.

 

He said the government has moved to tighten its fiscal policy, after the
appointment of a new, acting finance minister in July, which could lead to a
dovish monetary policy stance given the need for rebalancing.

 

“They have even signalled that there will be significant expenditure cuts
because they want to have a strong fiscal stance,” he said.

 

Last week, the Acting Finance Minister Ukur Yatani warned government
ministries and departments to expect brutal cuts, as the government gets rid
of unnecessary expenditure.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

South African Airways cash injection imminent but says it needs more

CAPE TOWN (Reuters) - South Africa’s cash-strapped national airline SAA says
a government cash injection of 5.5 billion rand ($376 million)approved for
the 2019/20 financial year is expected at the end of the month but it still
needs more money, a presentation to lawmakers showed on Wednesday.

 

South African Airways (SAA) has debt of about 12.7 billion rand, consisting
of 9.2 billion rand of legacy debt and a 3.5 billion rand working capital
facility provided by banks.

 

The airline requires 2 billion rand by December to fund working capital for
its 2019/20 financial year, the presentation said.

 

SAA, the turnaround strategy of which has been stymied by mismanagement and
inability to service its debt in an increasingly competitive aviation
environment, also received a 5 billion rand government bailout in its
2018/19 financial year.

 

The state-owned flag carrier’s long-term strategy is based on an equity
injection of nearly 22 billion rand. The government, meanwhile, wants
further cost reductions before committing more money during a time of weak
domestic growth and is also considering how it might find a commercial
partner for the airline.

 

In the presentation, SAA said it is in negotiations with lenders to make 2
billion rand available for working capital, adding that it would have to
meet certain conditions to obtain the funding.

 

“Lenders have the following conditions,” it said. “Repayment of short-term
funding of 3.5 billion rand by September 2019, which is already provided
for, and a debt reduction and payment plan for the legacy debt of 9.2
billion rand.”

 

($1 = 14.6272 rand)

 

 

 

South Africa's retail sales up 2.0% year/year in July

JOHANNESBURG (Reuters) - South African retail sales rose 2% year-on-year in
July following a 2.4% increase in June, Statistics South Africa said on
Wednesday.

 

On a month-on-month basis, sales were up 0.2% and rose 2% in the three
months to the end of July compared with the same period last year, the
statistics body said.

 

 

 

Ghana, Ivory Coast to introduce cocoa production ceiling

LISBON (Reuters) - Ghana and Ivory Coast, the world’s top cocoa producers,
are looking at introducing a cocoa production ceiling to support global
prices and discourage overproduction, the countries’ industry regulators
said on Wednesday.

 

The move comes after the West African nations, who produce two-thirds of the
world’s cocoa, imposed a fixed “living income differential (LID)” or premium
of $400 a tonne in July on all cocoa sales for the 2020/21 season.

 

Many cocoa buyers say the LID, which represents a major overhaul of how
cocoa is priced globally, could lead to excess production and eventually, to
lower prices.

 

“We’ve put in (place a) mechanism which sets production ceilings,” Joseph
Boahen Aidoo, CEO of the Ghana Cocoa Board (Cocobod) told industry
representatives at the European Cocoa Forum in Lisbon.

 

He declined to say at what level the production ceiling would be set, saying
that parliament had to approve it first.

 

The director general of Ivory Coast’s Conseil Cafe Cacao (CCC), Brahima Yves
Kone, said lawmakers in Ivory Coast and Ghana would likely approve the
production ceiling. “According to the figures they gave us, we expect them
to agree,” he said.

 

Cocoa prices on ICE Futures Europe hit a one-year high of 1,939 pounds
($2,424) in July, in anticipation of the move by Ivory Coast and Ghana to
introduce the premium, their latest attempt to combat pervasive farmer
poverty.

 

Speaking on how the West African nations would implement a production cap in
practice, Kone said Ivory Coast had begun mapping and registering the
country’s farmers, and should complete the project by 2020.

 

“We’ll have all the plantations, all the locations (mapped). No one will
enter the sector without permission. We need to be very harsh otherwise
we’ll have an explosion (of production),” he said.

 

 

Kenyan lawmakers reject Treasury bid to repeal rate cap

NAIROBI (Reuters) - A Kenyan parliamentary committee has blocked the finance
ministry’s move to scrap a cap on commercial lending rates imposed by
lawmakers in 2016, the committee said on Wednesday.

 

In a report on the 2019/20 (July-June) fiscal year that will be debated and
voted on by the whole house, parliament’s finance committee maintained the
cap but sought to change its language to make it more clear.

 

In its budget proposals to parliament in June, the finance ministry sought
to repeal the rate cap, arguing that it has constricted private-sector
credit growth as banks shunned lending to customers deemed risky, including
small and medium-sized businesses.

 

The central bank has said the cap probably reduced 2017 economic growth by
0.4%.

 

Commercial interest rates were capped in 2016 at 4 percentage points above
the benchmark central bank rate — currently 9% — by lawmakers who said they
were concerned about high loan costs.

 

In March, the High Court ruled that the section of the law capping rates was
unconstitutional and gave parliament a year to amend it. Lawmakers have
started a separate amendment to comply with the court’s ruling.

 

In its report on the budget, the finance committee asked that the law be
rewritten to make clear that the cap applies to annual interest rates on all
commercial loans.

 

Parliament will vote on committee’s recommendations on a date to be
determined. The measure will then be forwarded to the president for assent.
Parliamentarians have expressed their support for the cap.

 

“We are going to remove any ambiguities and still have the cap,” lawmaker
James Nyikal said in parliament.

 

Jibran Qureishi, the regional economist for East Africa at Stanbic Bank,
said he was not surprised by the decision to keep the cap.

 

“They were always going to reject it,” he told Reuters. “But it’s unclear
whether the president will assent to it in this current form or send it back
with changes.”

 

When the law was put in place in 2016, banking stocks on the Nairobi
Securities Exchange nosedived. Kenya had previously stopped controlling
commercial rates in the early 1990s. Kenya eventually offered the highest
return on equity for lenders on the continent, drawing in foreign investors.

 

Patrick Njoroge, the governor of the central bank, said on Wednesday the
caps would eventually be removed, terming them a “temporary deviation”.

 

“This is only a matter of time,” the central banker told an investor forum
in Nairobi organised by Renaissance Capital.

 

 

 

Nigeria's central bank moves monetary policy meeting forward to Sept. 19-20

LAGOS (Reuters) - Nigeria’s central bank has rescheduled its monetary policy
committee meeting, it said in a statement on Tuesday.

 

The bank moved the meeting forward to Sept. 19 and 20 after having
previously been scheduled to take place on Sept. 23-24. The statement gave
no reason for the change and a central bank spokesman told Reuters he did
not know why the date had changed.

 

A source at the central bank said the governor Godwin Emefiele was due to
attend the U.N. General Assembly in New York next week, hence the rate
setting meeting was brought forward.

 

Analysts expect Nigeria to begin easing rates from September after inflation
fell to almost a four-year low in August but the price index remains outside
the bank’s single-digit target and recent currency weakness could mean it
might want to hold fire.

 

The central bank in March cut its benchmark interest rate in a surprise move
to 13.5% from 14% as part of an attempt to stimulate growth and signal a new
direction, it said at the time. The move was the first rate cut since
November 2015.

 

Nigeria emerged from its first recession in 25 years in 2017 but growth
remains fragile, although higher oil prices and recent debt sales have
helped the continent’s biggest crude producer to accrue billions of dollars
in foreign reserves.

 

 

Malawi economy to grow 4.5% in 2019 -IMF

LILONGWE (Reuters) - Malawi’s economy is likely to expand by 4.5% this year,
the International Monetary Fund (IMF) said late on Tuesday, boosted by
improved agricultural production and the rebuilding of infrastructure
damaged by Cyclone Idai.

 

The growth projection is down slightly from the fund’s March forecast of a
5% expansion to gross domestic product. Earlier in September the finance
ministry said growth would advance 5%, up from 4% growth in 2018.

 

The small southern African nation’s economy is largely reliant on sales of
tobacco, tea and sugarcane, with growth having slowed in recent years
because of an El Nino-induced drought, electricity shortages and political
uncertainty.

 

Cyclone Idai, the worst cyclone in Africa for decades, lashed Mozambique,
Zimbabwe and Malawi in March, killing thousands and wrecking infrastructure.

 

“Over the medium term, growth could rise further to 6-7%, backed by greater
access to finance, crop diversification, an improved business climate and
more resilient infrastructure, including improved electricity generation,”
the IMF said in a statement.

 

In April last year the IMF granted Malawi a $112 million credit facility to
help the country to stabilise debt and fight poverty.

 

 

 

French-owned STAR group commits to maize audit in Madagascar

ANTANANARIVO (Reuters) - French-owned beverage company STAR said on Tuesday
it has requested an independent audit of its supply chain in Madagascar
following media reports linking maize production to deforestation in the
west of the country.

 

Slash and burn agriculture was the biggest driver of tree loss in Madagascar
last year, causing the world’s fourth largest island to lose 2% of its
primary rainforest, the highest of any tropical nation according to the
World Resources Institute.

 

STAR Group, which was bought by France’s Castel in 2011, said it wanted to
ensure its drinks were not the cause of deforestation or biodiversity loss
in Menabe region, an area of dry forest home to several endemic species.

 

“We have requested an independent audit, in this area, whose conclusions
will be made public as soon as possible,” Francis Ambroise, director general
of STAR told a news conference in the capital Antananarivo, citing recent
reports calling into question STAR’s corn supply.

 

While the company does not condone destroying forests for maize production,
he said he could not be 100% sure its maize supply was free of maize grown
illegally in the Menabe region.

 

The cutting and burning of trees to clear land for maize production in
Kirindy forest in Menabe is driving the world’s smallest primate - known as
Madame Berthe’s mouse lemur - to extinction.

 

Satellite data shows the 100,000 hectare (245,000 acres) forest has almost
halved in size in the last two decades.

 

POINTING FINGERS

STAR buys 13,000 tonnes of maize throughout Madagascar, representing 2.65%
of the country’s total annual production (490,000 tonnes), Ambroise said.

 

STAR’s head of communication Karine Rajaona Razafindrakoto told Reuters 11%
of the its maize comes from the Menabe region.

 

But conservation groups and the local deputy prosecutor say a large majority
of maize from the Menabe region is grown illegally in Kirindy forest.

 

The audit will be conducted by Fanamby, a local conservation group that has
been investigating the maize business for several years.

 

“If we want to move forward in restoring the situation in Menabe, we need to
collaborate and be transparent to move forward instead of pointing fingers,”
Tiana Andriamanana, executive director of Fanamby told Reuters.

 

“STAR is just the beginning,” she added, saying that other maize buyers
needed to improve their supply chains, particularly the animal feed
industry, which consumes almost two-thirds of national annual production.

 

In the past nine months, the government has made efforts to slow destruction
of Kirindy forest in Menabe, arresting several farmers and destroying maize
in the protected area.

 

But the politicians and businesspeople who launder maize grown illegally in
the forest into legal supply chains remain free, local prosecutors say.

 

 

 

South African consumer inflation quickens to 4.3% year-on-year in August

JOHANNESBURG (Reuters) - South Africa’s headline consumer inflation
quickened to 4.3% year-on-year in August from 4.0% in July, data from
Statistics South Africa showed on Wednesday.

 

On a month-on-month basis, inflation rose 0.3%, after rising 0.4% in the
previous month.

 

Core inflation - which excludes the prices of food, non-alcoholic beverages,
petrol and energy - was at 4.3% year-on-year in August versus a 4.2%
increase in July. It hit 0.1% month-on-month from 0.4% in the prior month.

 

 

 

South Africa’s first 5G network is now live in parts of Johannesburg and
Tshwane – here’s what you’ll pay

Rain South Africa has launched South Africa's first 5G network in parts of
Johannesburg and Tshwane, and it is offering prices that make fibre
connections seem slow.

 

5G is the latest iteration evolution of wireless data standards, and
promises to be roughly 10 times faster than the current state-of-the-art 4G
used by cellphone networks, while also being more reliable.

 

Rain, the data-only mobile operator, said selected existing customers have
been invited to use the new ultra-fast network with unlimited internet
access for R1,000 a month. 

 

Other interested users can apply for 5G through Rain’s website, and will be
alerted once it is available in their region. 

 

Rain’s chief marketing officer Khaya Dlanga said the company has achieved
speeds of 700 Mbps during testing, but the typical client will see speeds
around 200 Mbps. 

 

By comparison, a 40 Mbps fibre line at Telkom costs R1,199 a month, and you
will pay R1,067 a month for a 50 Mbps fibre line via Afrihost. 

 

During the course of the next year 5G coverage area will be extended to
Durban and Cape Town, Dlanga said.

 

Vodacom and MTN have both said they could launch 5G locally in 2019, but
have been restricted by a lack of access to the necessary radio frequency
spectrum.

 

Vodacom already launched a 5G network in Lesotho in 2018. 

 

In a policy discussion document released in August, the national treasury
said data prices could decline by as much as 25% if the appropriate spectrum
is released in South Africa. 

 

The release of spectrum, Treasury said, would reduce the cost of doing
business in SA and contribute up to 0.6% in economic growth. 

 

Communications Minister Stella Ndabeni-Abrahams in July issued a policy
directive to Icasa to release additional spectrum.

 

If implemented, that would be the first time in 14 years that additional
spectrum is released for use, after the state repeatedly missed its own
deadlines to do so.  

 

Icasa told Business Insider South Africa in August that the body is still
“applying its mind on the published policy direction” and will only outline
the process to release spectrum at a later stage.--businessinsider.co.za

 

 

 

 

US Fed cuts interest rates for second time since 2008

The US central bank has cut interest rates for only the second time since
2008, amid concerns about slowing global growth and trade wars.

 

As expected the Federal Reserve lowered the target range for its key
interest rate by 25 basis points to between 1.75% and 2%.

 

President Trump reacted by attacking Fed chairman Jerome Powell for lacking
"guts".

 

Mr Trump has repeatedly criticised the Fed for cutting rates too slowly.

 

The president took to Twitter in the minutes immediately following the rate
cut announcement to lambast the move: "Jay Powell and the Federal Reserve
Fail Again. No "guts," no sense, no vision! A terrible communicator!".

 

The bank said the cut is aimed at shoring up the US economy, amid
"uncertainties" about future growth.

 

Split vote

But officials were divided about the decision and over the need for future
cuts.

 

Seven members of the Federal Reserve Open Markets Committee, which sets the
rates, voted in favour of Wednesday's cut, including Mr Powell.

 

Two members wanted to hold the rate steady, while one wanted to cut further.

 

Federal Reserve policymakers divided over US rate cuts

Why the Fed's interest rate move matters

Mr Powell said policymakers decided on a second cut after global growth
slowed and trade tensions worsened over the summer.

 

"The thing we can't address really is what businesses would like, which is a
settled roadmap for international trade ... but we do have a very powerful
tool which can counteract weakness to some extent," he said, referring to
the rate cut.

 

However, he dismissed the need for negative interest rates - a proposal
backed by Mr Trump - as "not at the top of the list".

 

The comments underscored the strain between Mr Powell and the president, who
has sought to blame the Fed for economic slowdown, while waging trade wars
with China, Europe and others.

 

Cutting rates helps fuel economic activity, by making it cheaper to borrow
money for both businesses and consumers.

 

But with interest rates in the US already low by historic standards - and
much of the economic uncertainty caused by the trade war with China -
analysts have questioned how much rate cuts will help.

 

US share markets fell after the announcement, but later recovered.

 

Policy shift

The Fed's decision to lower rates on Wednesday follows a similar cut in July
and marks a reversal from its policy only a year ago, when America's healthy
economy had convinced policy makers to enact a series of small hikes.

 

But US economic growth slowed to 2% in the second quarter, job creation has
slipped and inflation remains lower than US policymakers would like.

 

In recent days, parts of the financial markets have also shown signs of a
cash-crunch, temporarily pushing short-term interest rates above the Fed's
target and prompting the bank to intervene.

 

The cut in interest rates was of course the headline from this Fed meeting.
But the Chairman Jerome Powell also commented on some developments in the US
financial system that have really had people scratching their heads this
week.

 

There was a sharp rise in borrowing costs in a rather arcane corner of the
financial system known as the repo (repurchase) market which firms use to
raise or lend cash for short periods.

 

What was going on? Could it be a warning sign of serious stress somewhere in
the financial world? The crisis a decade ago has made people more sensitive
to that kind of possibility.

 

Mr Powell said it was due to companies needing a lot of cash for tax
payments and for investors buying government bonds. Although the Fed and the
markets knew these developments were coming, Mr Powell said they "had a
bigger effect than most folks anticipated". He said these issues have no
implications for the economy. So, flap over? Maybe. Let's hope so.

 

In economic projections released on Wednesday, Federal Reserve policymakers
said they expect the economy to grow 2.2% this year, faster than they
forecast in June.

 

Brian Coulton, chief economist at Fitch Ratings, said the upgrade to that
growth prediction underscores the fact that the Fed is worried about global
factors, such as the trade war, rather than the underlying health of the US
economy.

 

"This move is all about the deterioration in the global economic outlook
over the late summer and very little about incoming US data," he said.

 

"While the Fed has maintained its 'will act as appropriate' language, we
still see this as an insurance policy move and don't expect a series of
further rate cuts," he added.--BBC

 

 

 

Trump strips California of power to set auto emission standards

The White House has stripped California of its right to set its own vehicle
emissions standards and banned other states from setting similar rules.

 

The waiver allowed the state - America's most populous - to set stricter
standards than the federal government.

 

President Trump says the move will cut car prices and the impact on
emissions will be minimal.

 

But it is likely to spark a legal battle over states' rights.

 

California has already taken steps to block the administration's efforts.

 

"We will fight this latest attempt and defend our clean car standards," said
Governor Gavin Newsom in a statement on Tuesday.

 

This is the latest clash between the Republican president and the state, a
West Coast fortress of liberal Democrats.

 

What do the rules mean?

California's ability to set its own rules dates back to the 1970s when Los
Angeles was blanketed in choking smog.

 

The state was allowed to set tougher emission standards than the federal
government as long as it could provide a compelling reason for why such a
waiver was needed. In 1977, other states were allowed to adopt California's
stricter standards.

 

The Golden State's rules have largely become the de-facto benchmark
nationwide because car manufacturers do not design different sets of
vehicles to meet standards in other states. The state accounts for about 12%
of all vehicle sales.

 

Emissions control methods first used in California, such as catalytic
converters and regulations on oxides of nitrogen, have become commonplace
throughout the US.

 

Thirteen other states and the District of Columbia have already adopted
California's stricter exhaust pipe greenhouse gas standards - together
representing about a third of the US car market.

 

In July, under the waiver system, California conducted secret negotiations
with Ford, Honda, Volkswagen and BMW of North America.

 

The car-makers pledged to produce fleets meeting a standard of 50 miles per
US gallon (4.7 litres per 100km), against the current 37 mpg level, by 2026.

 

Increased fuel efficiency means vehicles burn less petrol and emit fewer
greenhouse gases into the atmosphere.

 

Emissions from transportation, including cars and trucks, are the largest
single source of greenhouse gases in the US, according to the US government.

 

But some analysts expect manufacturers to wait for the outcome of litigation
on the new standards before they make any changes to their cars.

 

Trump and the environment

Mr Trump's announcement is his latest move to roll back Obama-era
environmental protections.

 

In June 2017, Mr Trump pulled the US out of the Paris Agreement, a climate
pact forged under his predecessor involving nearly 200 countries.

 

In December of last year, under guidance from the White House, the
Department of the Interior unveiled plans to allow oil drilling on millions
of acres that have been off-limits to protect the greater sage grouse, a
near-threatened species that spans 10 states in the US.

 

That same month, the Environmental Protection Agency (EPA) said it would end
rules limiting carbon emissions on new coal plants, soon after the president
dismissed a report by his own government warning of future devastating
economic consequences to the US from climate change.

 

Also under Mr Trump, federal bodies have supported freezing emissions
requirements for new cars and trucks at 2020 levels until 2026.

 

The administration was reportedly planning to issue separate rules to
reverse Obama-era fuel economy requirements in the next few weeks.

 

Globally, the US was last year ranked 10 out of 180 countries in terms of
air quality and 27th in overall environmental performance, according to a
Yale University study.

 

Trump v California, again

The state of California is a giant, Democrat-blue thorn in Donald Trump's
side.

 

Its new governor, Gavin Newsom, has been an outspoken critic of the
president. Its attorney general, Xavier Becerra, has launched a fusillade of
legal challenges to White House policies. In 2018, California voters
overwhelmingly opted for Democratic congressional candidates, helping to
wrest control of the US House of Representatives away from the Republican
Party.

 

California, in effect, has positioned itself as the progressive counterpoint
to Trump's conservative politics - a case study in how to do things
differently on a wide range of policies, including healthcare, the
environment, immigration and education.

 

Now the president - who seems to take every bit of criticism personally - is
pushing back. Car regulations are one of the ways California, by itself one
of the world's largest economies, can effectively set national standards
regardless of federal action. With this attempt to clip the state's wings,
Mr Trump is sending a message about who calls the shots. He's also upping
his criticism of California's growing homeless problem - suggesting the
progressive model has some glaring flaws.

 

California Democrats aren't going to go down without a fight, however - one
that will surely end up in the courts. This episode is simply the latest
chapter in a dispute that is far from over.

 

What's the response?

Governor Newsom called the president's announcement "a failed attempt to
assert power" and "a continuation of a political vendetta against CA and our
progress".

 

Echoing the governor, California Attorney General Xavier Becerra vowed to
head back to court. Mr Becerra has already sued the White House more than 50
times on a variety of issues including the proposed border wall, the
reversal of the Affordable Care Act, and other environmental standards.

 

At a press conference in Sacramento on Wednesday, Mr Becerra took a veiled
jab at Republicans.

 

"Our message to those who claim to support states' rights is, 'Don't trample
on ours,'" Mr Becerra said. "We cannot afford to backslide in our battle
against climate change."

 

Among car manufacturers, Mr Trump's decision could prompt a split reaction.

 

Though automakers had previously lobbied the White House to relax standing
environmental regulations, some manufacturers are reportedly worried that
the legal challenges expected to result from the administration's
intervention will add to existing market turmoil.

 

Moreover, some carmakers contend that without significant increases in fuel
efficiency, US vehicles will be less competitive globally, ultimately
resulting in job loss.

 

Public support for stricter greenhouse gas emissions is strong. And
according to a Washington Post-Kaiser Family Foundation poll released last
week, 67% of Americans say they support state governments setting stricter
fuel efficiency targets than the federal government.--BBC

 

 

 

Burger King ditches free toys and will 'melt' old ones

Burger King will no longer give away plastic toys with children's meals,
amid pressure to reduce plastic waste.

 

The fast food restaurant chain is also encouraging customers to bring in old
promotional plastic toys, which it says it plans melt down to make other
items.

 

This move comes after two Hampshire children petitioned the fast food giant
and its rival McDonald's to stop giving away free plastic toys.

 

McDonald's said its customers would be able to choose between a toy and
fruit.

 

The petition organised by Ella, aged nine, and Caitlin McEwan, aged seven,
calling for companies to "think of the environment and stop giving plastic
toys with their kids meals" has received more than half a million
signatories.

 

The girls wrote "children only play with the plastic toys they give us for a
few minutes before they get thrown away and harm animals and pollute the
sea". Instead they suggested any giveaways could be made from sustainable
materials.

 

Just hours before Burger King announced its change of policy, rival chain
McDonald's said it had no plans to scrap its toy giveaways. Instead
customers would be given the option of swapping the toy for a sachet of
fruit if they wished.

 

McDonald's also plans a trial from early next year, enabling parents to
choose between a book or a toy.

 

"The gifts provide fun for many families and children. That's why we'll be
running these trials, in order to give our customers a choice; they also can
choose not to have a toy or gift at all," said Paul Pomroy, chief executive
of McDonald's UK and Ireland.

 

But Burger King said it wanted to undertake "significant action" to address
the issue of plastic waste.

 

The fast-food restaurant chain will provide bins in its restaurants to
collect old toys. It said the move would save 320 tonnes of plastic a year.

 

Helen Bird, from sustainability campaign group Wrap, described Burger King's
response as a "bold move", welcoming the in-store collections since plastic
toys can't be recycled with plastic packaging at home.

 

Pentatonic, which makes consumer goods from recycled materials, is working
with Burger King to recycle collected plastic toys into restaurant items
such as trays and play areas.

 

Most toys today are made from three polymers - polypropylene, ABF and PET.

 

Pentatonic said no harmful gasses would be released to the environment, when
these plastics were melted. The melted plastic forms a continuous strip and
can then be cut into beads or pellets which are used to manufacture new
plastic products, the firm said.

 

"If we were to use recycled polypropylene to make a tray, instead of new
plastic, total energy consumption would be reduced by approximately 88% and
carbon emissions would be cut by approximately 70%," Pentatonic's chief
executive Johann Boedecker told the BBC.--BBC

 

 

 

British Airways pilots call off next week's strike

British Airways pilots have called off the next strike in their dispute,
which had been scheduled for 27 September.

 

Last week, a two-day stoppage called by the pilots' union, Balpa, forced BA
to cancel almost all its flights.

 

The strike followed failed negotiations between the union and the airline
over a pay offer of 11.5% over three years.

 

Balpa said the strikes on 9 and 10 September had demonstrated the anger and
resolve of pilots.

 

It was now time for a period of reflection before the dispute "escalates
further and irreparable damage is done to the brand", the union said.

 

A spokesman for BA said: "We have just received this news. We are
considering the implications and we will give updates in due course."

 

British Airways had already started cancelling flights for 27 September last
Thursday - just outside the 14-day window when the company must pay
passengers compensation if their travel is cancelled.

 

The airline has said it will try to reinstate as many of the flights as
possible, but it is not yet clear if they will all be put back on the
schedule for 27 September.

 

British Airways said it will be in touch with customers to let them know.

 

The airline was forced to cancel 1,700 flights last week during the pilots'
walkout over pay.

 

Some 200,000 passengers had to change their travel plans because of the
strikes.

 

Balpa said it hoped BA would "now change its approach and negotiate
seriously" with a view to ending the dispute.

 

Balpa general secretary Brian Strutton said: "Someone has to take the
initiative to sort out this dispute and with no sign of that from BA, the
pilots have decided to take the responsible course.

 

"In a genuine attempt at establishing a time out for common sense to
prevail, we have lifted the threat of the strike on 27 September."

 

However, Balpa said it retained the right to announce further strike dates.

 

What's the row about?

BA had offered pilots an 11.5% pay rise over three years in July, but this
was rejected.

 

Balpa said that its members had taken lower pay rises and made sacrifices
during tougher times for the airline.

 

It said that now BA's financial performance had improved - its parent
company IAG reported a 9% rise in profits last year - pilots should benefit.

 

BA said the 11.5% offer was "fair and generous".

 

It has already been accepted by Unite and the GMB, whose members include BA
cabin crew, ground staff and engineers.--BBC

 

 

 

Cobham: National security fears threaten defence takeover

The government is to intervene in a US private equity firm's takeover of UK
defence and aerospace firm Cobham, citing national security concerns.

 

Advent International made a £4bn offer to buy Cobham in July and
shareholders approved the deal last month.

 

But Cobham's founding family raised concerns about the company's future and
its connections with UK defence.

 

The government said it wanted to "support private sector innovation whilst
safeguarding public interest".

 

Dorset-based Cobham, which employs 10,000 people, is known for pioneering
technology enabling the mid-air refuelling of planes. The firm also makes
electronic warfare systems and communications for military vehicles.

 

What has the government said?

"Following careful consideration of the proposed takeover of Cobham, I have
issued an intervention notice on the grounds of national security," said
Business Secretary Andrea Leadsom.

 

The Competition and Markets Authority (CMA) will investigate and carry out a
review on the national security implications of the transaction.

 

The government has the power to veto the deal if the CMA finds there are
sufficient concerns.

 

It must report the results of its decision by 29 October.

 

Since 2002, the government is thought to have made 16 interventions on
takeovers, nine of which were due to national security concerns. None of
these deals have so far been blocked.

 

"Advent is committed to being a responsible steward of Cobham, encouraging
its future growth and success. We will continue to engage constructively and
cooperatively with the UK government in this part of their review," said an
Advent spokesperson.

 

Why is the deal controversial?

The defence technology firm has had a rocky time after issuing a series of
profit warnings in 2016 and 2017, which required it to raise funds from its
shareholders.

 

Cobham has extensive contracts with the British military, including
air-to-air plane refuelling, electronic warfare systems, and training
military personnel to use software platforms in missile destroyers and
fighter jets.

 

Lady Nadine Cobham, 76, the widow of Sir Michael Cobham, who built up the
firm over 25 years, recently spoke of her concerns about the takeover deal,
telling the Mail on Sunday that Cobham "deserves to be protected" by the
government.

 

"It's an opportune moment for Advent to pounce and the reality is that
Advent will break up Cobham and sell off its parts to the highest bidder.

 

"This may well include air-to-air refuelling, which is a real shocker," she
said. She also said she would not accept Advent's assurances that it would
maintain Cobham's UK and US headquarters, as well as investing further into
the firm's research and development efforts.

 

Will the deal eventually go through?

Successive governments have shown themselves to be intensely relaxed about
foreign ownership of important bits of British infrastructure.

 

Our power and water supplies, ports and airports are all owned by overseas
investors. That relaxed attitude has even extended to defence, particularly
when the foreign owners are from allied countries.

 

Boeing, the US defence contractor, provides all kinds of kit, including
Chinook helicopters, to the UK armed forces, while the new F-35 Lightning,
the cutting edge of the Royal Air Force, is made by another American
contractor, Lockheed Martin.

 

That's why this morning's intervention by Andrea Leadsom has taken many by
surprise. There was no groundswell of public opinion against the Advent bid
for Cobham, despite the best efforts of the founding family to whip one up.
A US buyer for a supplier of defence kit might be thought not to raise many
issues of national security.

 

But City sources pointed out this morning that silence should not have been
mistaken for a lack of activity. Mrs Leadsom could not have intervened while
the bid was still live - governments hate to affect commercial processes -
but she was free to do so once Cobham shareholders approved the deal on
Monday.

 

Meanwhile, defence experts say that Cobham's speciality, air-to-air
refuelling, could well be seen as a matter of national security. It is
impossible to fight a modern war without the ability to keep aircraft in the
air for long periods of time.

 

When the Royal Air Force had to find a way to attack the Port Stanley
airfield at short notice during the Falklands War, Cobham engineers made it
possible.

 

Cobham is also the undisputed world leader in the field, something that
gives UK industry a big entrée to defence contracts round the world.

 

Most think that in the end, the Advent deal will go through - but that the
CMA investigation will result in legally binding undertakings that Cobham
keep research and development capabilities here in the UK.

 

Does the government often intervene?

Since 2002, the government is thought to have made 16 interventions on
takeovers, nine of which were due to national security concerns.

 

In July, the government chose to intervene in another defence and aerospace
industry deal - the £2.7bn acquisition of satellite communications operator
Inmarsat by a consortium of private equity funds. That probe is still
ongoing.

 

The move came after new laws were introduced in November, making it easier
for the authorities to block takeover bids where there is a risk of
technology being acquired by foreign firms.

 

Inmarsat operates satellites that manage critical government communications
for the UK and several other countries, particularly in emergency services,
naval operations and border control.

 

What deals has the CMA previously investigated for national security
concerns?

So far the government has looked into nine takeover deals due to concerns
over national security:

 

*         General Dynamics and Alvis (2004)

*         Finmeccanica and AgustaWestland (2004)

*         Finmeccanica's acquisition of parts of BAE Systems (2005)

*         Lockheed Martin and Insys Group (2005)

*         The General Electric Company and Smiths Aerospace (2007)

*         Atlas Elektronik UK's acquisition of QinetiQ's Under Water Systems
division (2009)

*         Sepura and Hytera (2017)

*         Northern Aerospace and Gardner Aerospace (2018)

*         Inmarsat and Connect Bidco (2019)--BBC

 

 

 

India e-cigarettes: Ban announced to prevent youth 'epidemic'

India's cabinet has announced a ban on the production, import and sale of
electronic cigarettes, saying they pose a risk to health.

 

An executive order had been approved banning vaping products because of
their impact on young people, Finance Minister Nirmala Sitharaman said.

 

It is not clear if the order will also prohibit the use of vaping equipment.

 

India has more than 100 million adult smokers, making it a huge potential
market for e-cigarette companies.

 

Vaping - which involves inhaling a mix typically made of nicotine, water,
solvents and flavours - is seen as an alternative to smoking which can help
you quit, but its impact on health is still not fully known.

 

The ban will include jail terms of up to three years for offenders.
Traditional tobacco products are not affected.

 

"This means the production, manufacturing, import and export, sale,
distribution and advertising related to e-cigarettes are banned," Ms
Sitharaman told a news conference.

 

She said evidence from the US and India suggested some young people saw
vaping as a "style statement".

 

India is the world's second-largest consumer of tobacco products after
China, and more than 900,000 people die in the country each year from
tobacco-related illnesses.

 

Proponents of vaping say it helps people stop smoking and that banning it
would encourage ex-smokers to pick up the habit again.

 

But India's health ministry, which proposed the ban, says it is in the
public interest to ensure vaping doesn't become an "epidemic" among young
people.

 

Vaping: How popular are e-cigarettes?

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

While the Indian market seemed ripe for the expansion of popular e-cigarette
companies like Juul, it hadn't taken off like it has in the US or the UK.

 

Vapers in the US, UK and France spent more than $10bn (£8bn) on smokeless
tobacco and vaping products in 2018.

 

Media captionSmoking v vaping: Watch lab test results

According to the World Health Organization, there has been a small but
steady decrease in the estimated number of smokers globally, to just over
one billion.

 

But it's a different matter when it comes to vaping.

 

The number of vapers has been increasing rapidly - from about seven million
in 2011 to 41 million in 2018.

 

Market research group Euromonitor estimates that the number of adults who
vape will reach almost 55 million by 2021.

 

In the US, where the potential health risks of e-cigarettes are in the
spotlight, there have been 450 reported cases of lung illness tired to
vaping this year. There have also been at least six deaths across 33 states.

 

Health investigators in the US are trying to establish whether a particular
toxin or substance is behind the outbreak, or whether it's the result of
heavy usage.

 

India's ban came a day after New York became the second US state to prohibit
the use of flavoured e-cigarettes. Critics of vaping say flavours appeal
particularly to children and risk them becoming addicted to nicotine.--BBC

 

 

 

Inflation surprise as computer game prices drop

Inflation growth slowed sharply in August to 1.7% after computer game prices
dropped and clothing prices were slow to recover from the summer sales.

 

The Consumer Prices Index measure of inflation fell below 2.1% in July,
according to the Office for National Statistics.

 

It is the lowest rate since late 2016.

 

As well as the falling cost of computer games, the ONS said clothing prices
rose "less than last year after the end of the summer sales".

 

Economists had expected inflation to dip to 1.9% in August.

 

The sharper fall sent the pound down 0.41% against the dollar to $1.2450.

 

The fall should benefit households, pushing wage growth further above the
rate of inflation. Recent figures showed that pay, excluding bonuses,
increased by 3.8% between May and July.

 

Why has inflation fallen?

The biggest drop in CPI inflation came from the "recreation and culture"
sector, where prices fell by 5% in August, in particular in computer games
and downloads.

 

The ONS said: "Price movements for games can often be relatively large,
depending on the composition of bestseller charts."

 

A hangover from retailers' summer sales also weighed on clothing and
footwear prices.

 

Although prices rose by 1.8%, it was below the 3.1% increase recorded last
August.

 

The ONS said that prices usually grew around this time of year as autumn
ranges started to enter shops.

 

But it said the smaller rise "may have been influenced by the proportion of
items on sale".

 

While cheaper computer games contributed most to the slower rise in the cost
of living, today's inflation figures also give us a hint of price pressures
coming down the pipeline - or rather, the lack of them.

 

The prices charged by food manufacturers to retailers, for example, are
down. And prices paid by manufacturers for their raw materials dropped by
0.8% in the year to August.

 

Much of that was down to falling oil prices. As the global economic slowdown
reduced demand around the world, the standard UK measure - the price of a
barrel of crude from the North Sea oilfield of Brent - dropped by 19%.

 

The global slowdown, in other words, has removed much of the upward pressure
on prices. On the financial markets, traders currently now anticipate no
change to interest rates for at least a year, with the next move more likely
to be down than up.

 

Meanwhile, the National Institute of Economic and Social Research (NIESR)
said companies may be delaying raising prices until there is clarity over
Brexit.

 

"Our analysis of 130,000 goods and services included in the basket suggests
that fewer firms raised prices than is typical for this time of year," said
NIESR's senior economist Jason Lennard.

 

"Firms are probably waiting to see beyond 31 October before adjusting
prices."

 

What does it mean for the Bank of England?

The Bank of England's Monetary Policy Committee (MPC) is holding its two-day
meeting to decide on interest rates ahead of an announcement on Thursday.

 

Pantheon Macroeconomics chief UK economist Samuel Tombs said: "The chance
that the MPC follows other central banks and cuts bank rate this year
remains slim, despite the sharp fall in CPI inflation in August."

 

Ben Brettell, senior economist at Hargreaves Lansdown, agrees there is
unlikely to be any change.

 

The Bank wants to retain flexibility ahead of Brexit and has indicated it's
prepared to play the ball as it comes off the wicket in the event of a
disruptive exit.

 

"On the other hand, if everything goes smoothly, the Bank thinks it'll need
to lift rates gently in the near future to head off higher prices."--BBC

 

 

 

 

 

 

 

 

 


 

 


 

INVESTORS DIARY 2019

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


Companies under Cautionary

 

 

 


 

 

 

 


Bindura Nickel Corporation

 

 

 


Padenga Holdings

 

 

 


Delta Corporation

 

 

 


Meikles Limited

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 


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

 


 

 


(c) 2019 Web: <http:// www.bulls.co.zw >  www.bulls.co.zw Email:
<mailto:info at bulls.co.zw> info at bulls.co.zw Tel: +263 4 2927658 Cell: +263 77
344 1674

 


 

 

 

 

 

 

Invest Wisely!

Bulls n Bears

 

Telephone:    <tel:%2B263%204%202927658> +263 4 2927658

Cellphone:      <tel:%2B263%2077%20344%201674> +263 719 441 674

Alt. Email:              <mailto:info at bulls.co.zw> info at bulls.co.zw 

Website:
<http://www.google.com/url?q=http%3A%2F%2Fwww.bulls.co.zw&sa=D&sntz=1&usg=AF
QjCNH8LYgdY55h-XKseuM8Kpr-JKdfhQ> www.bulls.co.zw

Blog:
<http://www.google.com/url?q=http%3A%2F%2Fwww.bulls.co.zw%2Fblog&sa=D&sntz=1
&usg=AFQjCNFoIy6F9IXAiYnSoPSgWDYsr8Sqtw> www.bulls.co.zw/blog

Twitter:                 @bullsbears2010

LinkedIn:              Bulls n Bears Zimbabwe

Facebook:
<http://www.google.com/url?q=http%3A%2F%2Fwww.facebook.com%2FBullsBearsZimba
bwe&sa=D&sntz=1&usg=AFQjCNGhb_A5rp4biV1dGHbgiAhUxQqBXA>
www.facebook.com/BullsBearsZimbabwe

Skype:                  Bulls.Bears 

Whatsapp Group:   <https://chat.whatsapp.com/CF6wllAfScU9Wr6dXxoQnO> Click
Here to Join

 



 

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20190919/749614ce/attachment-0001.html>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image001.jpg
Type: image/jpeg
Size: 42384 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20190919/749614ce/attachment-0005.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image002.jpg
Type: image/jpeg
Size: 34688 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20190919/749614ce/attachment-0006.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image003.jpg
Type: image/jpeg
Size: 33009 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20190919/749614ce/attachment-0007.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image004.jpg
Type: image/jpeg
Size: 30706 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20190919/749614ce/attachment-0008.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image005.jpg
Type: image/jpeg
Size: 3256 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20190919/749614ce/attachment-0009.jpg>