Major International Business Headlines Brief::: 23 September 2019

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Major International Business Headlines Brief::: 23 September 2019

 


 

 


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*  Nigeria's central bank keeps benchmark rate at 13.5%

*  Tanzania sees 2019/20 cashew nut output up 33 percent - minister

*  Nigerian state oil company says refinery revamps set for January

*  S.Africa's Grand Parade posts FY profit on Dunkin' closure

*  Tanzania inks deal to buy two passenger planes from Airbus

*  Morocco's CPI rises 0.8% in August - planning agency

*  Gerald Group unit to suspend iron ore mining in Sierra Leone

*  Ghana expected to produce 850,000 tonnes of cocoa in 2019/20 season:
industry regulator

*  South Africa maize expected to be slightly higher than previous estimate

*  Thomas Cook collapses as last-ditch rescue talks fail

*  India-US trade : Is Trump right about India's high tariffs?

*  Sirius Minerals: The people who spent thousands on a Yorkshire mine

*  Huge rise in catalytic converter thefts

*  Why is the Fed pumping money into the banking system?

*  India delivers surprise corporate tax cuts to boost economy

*  Walmart ceases e-cigarette sales

*  RBS is first UK big four bank to be led by a woman

 

 

 

 


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Nigeria's central bank keeps benchmark rate at 13.5%

ABUJA (Reuters) - Nigeria’s central bank held its benchmark interest rate at
13.5%, its governor Godwin Emefiele said on Friday.

 

Most analysts polled by Reuters had predicted the central bank would ease in
September, though Emefiele has previously said the bank would maintain its
tight monetary stance in 2019.

 

Africa’s largest economy and top crude oil exporter emerged from its first
recession in 25 years in 2017. Growth remains fragile but higher oil prices
and recent debt sales have helped the country to accrue billions of dollars
in foreign reserves.

 

Emefiele, announcing the monetary policy committee’s decision in the capital
Abuja, said tightening credit could constrain fragile economic growth while
loosening it could allow inflation to rise.

 

He said holding rates steady would allow the bank to appraise the impact of
current policies, such as changes to the loan to deposit ratios at banks,
before determining what shift, if any, was needed.

 

Inflation fell to a nearly four-year low of 11.02% in August but the price
index remains outside the bank’s single-digit target.

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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Tanzania sees 2019/20 cashew nut output up 33 percent - minister

DAR ES SALAAM (Reuters) - Tanzania expects to raise cashew nuts production
by 33.5% in the year to September 2020, helped by favourable weather
conditions and increased plantings, its agriculture minister said on
Saturday.

 

Output in 2019/2020(October-September) is seen reaching 300,000 tonnes, up
from the 225,000 tonnes produced in the 2018/2019 season.

 

“We expect to get a bigger harvest in the coming season, with our cashew nut
production likely to rise to more than 300,000 tonnes,” the minister, Japhet
Hasunga, told Reuters.

 

“This forecast of increased output is attributed to good weather, widespread
availability of farming inputs and increased plantings.”

 

Last year, the government blocked traders from buying the crop from farmers
after they could not meet the minimum indicative prices set by the
president, and bought the entire crop itself.

 

President John Magufuli had ordered a 94 percent hike in prices, arguing
that farmers were receiving too little for the most valuable of Tanzania’s
crop exports.

 

He then deployed the army to collect the entire crop of over 200,000 tonnes
of cashew nuts from farmers.

 

But in November he sacked two ministers, saying they had failed to secure
buyers.

 

Hasunga told Reuters that the government had eventually sold the 2018/2019
crop to a Vietnamese firm, but would allow private traders to resume buying
in 2019/2020.

 

 

 

Nigerian state oil company says refinery revamps set for January

LAGOS (Reuters) - Full restoration work on all three of Nigeria’s
state-owned refineries will begin in January, the Nigerian National
Petroleum Corporation (NNPC) said in a statement on Saturday.

 

NNPC chief Mele Kyari said the company “will do everything possible between
October and December” to make the projects possible.

 

Restoring state-owned refineries in Port Harcourt, Warri and Kaduna has been
a long-sought, but elusive, goal for NNPC.

 

They have operated well under their 445,000 barrel-per-day capacity for
years due to neglect, mismanagement and a lack of crude, leaving the
oil-producing nation almost entirely reliant on imported fuel.

 

In March, Italian firm Maire Tecnimont won a $50 million contract to conduct
a “complete integrity check” and inspect equipment at Port Harcourt, with
Italian oil company ENI overseeing the work.

 

Tecnimont project manager La Mattina Carmelo, in the NNPC release, said the
work was “progressing efficiently”, with the inspection nearly finished and
the engineering, procurement, and construction proposal at 75% completion.

 

NNPC said all the refineries will operate at full capacity by 2022, but did
not specify which companies would work on upgrades and repairs at Warri or
Kaduna.

 

In August, Kyari told Reuters that NNPC is considering both government and
private funding, but that after the revamps third parties would maintain and
operate the refineries to ensure reliable production.

 

 

 

S.Africa's Grand Parade posts FY profit on Dunkin' closure

JOHANNESBURG (Reuters) - Grand Parade Investments (GPI) on Friday posted a
full-year profit as closure of its loss-making Dunkin’ Donuts unit lifted
the South African investment company’s earnings.

 

GPI, which runs the Burger King chain of fast-food restaurants in South
Africa and operates casinos, had reported a loss last year after its
struggling units - Dunkin’ Donuts and ice-cream business Baskin-Robbins -
dented the company’s earnings.

 

The closure of both units, announced earlier this year after GPI failed to
find a buyer, helped lift the investment company’s headline earnings per
share (HEPS).

 

The company’s HEPS - the main profit measure in South Africa that strips out
certain one-off items, came in at 8.91 cents per share compared with a
headline loss of 11.18 cents per share last year.

 

“We have made excellent progress in improving the overall profitability of
the business, and this will continue to be a strong focus, along with
driving new restaurant growth in Burger King,” CEO Mohsin Tajbhai said in a
statement.

 

In 2016, GPI signed a franchise agreement with Dunkin’ Brands Group, which
owns Dunkin’ Donuts and Baskin-Robbins, betting that South African demand
for snacks and drinks from international chains would hold up, despite
pressures on disposable income.

 

However, retailers have been struggling to boost sales as a slowing economy,
high unemployment rate and rising fuel costs reduced consumers’ spending
power.

 

The liquidation of Dunkin’ Donuts unit saw Grand Parade’s headline loss
narrow to 25.1 million rand ($1.70 million) from 36.6 million rand last
year, while Baskin-Robbins’ loss reduced to 11.5 million rand from 24.9
million rand in the year-ago period.

 

GPI said the company is planning to focus on its Burger King outlets, which
helped lift earnings to 38 million rand, compared with 27.1 million rand
loss posted a year earlier.

 

($1 = 14.7270 rand)

 

 

 

Tanzania inks deal to buy two passenger planes from Airbus

DAR ES SALAAM (Reuters) - Tanzania has signed a contract with Airbus for the
European planemaker to supply two passenger jets for the country’s national
airline to help expand its small fleet and extend its network of
destinations, a government official said on Friday.

 

Benjamin Ndimila, the Chief Executive Officer of Tanzania Government Flight
Agency (TGFA), told Reuters that under the contract Airbus would supply two
A220-300 aircraft.

 

President John Magufuli has been personally championing the revival of Air
Tanzania Company Limited (ATCL), joining other regional governments that are
launching or revamping national carriers to share in Africa’s growing
aviation business.

 

Last month, neighbouring Uganda also relaunched its national carrier.

 

TGFA, under the president’s office, leases aircraft to Air Tanzania.

 

Air Tanzania’s existing fleet includes one Boeing 787-8 Dreamliner, two
Airbus A220-300 jets and three DHC Dash 8-400 aircraft, formerly known as
the Bombardier Q400 turboprop.

 

Ndimila said the new Airbus planes would have a more luxurious interior than
in the existing aircraft.

 

“The new planes will have an improved entertainment system including screens
in each seat,” he said.

 

Airbus, he said, had told Tanzania the planes would be ready in about a
year. He declined to say how much they would cost.

 

Magufuli’s government reckons a more efficient national airline will help
tourism, a mainstay of Tanzania’s economy.

 

On Monday, he said the airline carried 75% of domestic air traffic, up from
3% three years ago.

 

“So far the business is doing very well. We are overwhelmed by the demand
... we wish these planes could be delivered even tomorrow,” Ndimila said.

 

 

 

Morocco's CPI rises 0.8% in August - planning agency

RABAT (Reuters) - Morocco’s consumer price index was up 0.8% in August from
a year earlier, after rising 0.3% in the previous month, the high commission
for planning said on Friday.

 

Food prices rose 0.5% year-on-year in August after dropping 0.5% in the
previous month. Non-food prices increased by 1% in August, compared with a
rise of 1% a month earlier.

 

On a month-on-month basis, the consumer price index rose 0.3% in August.

 

Core annual inflation rose 0.3% on a month-on-month basis and 1.5%
year-on-year.

 

Inflation, mainly affected by food prices, is expected to slow to 0.6% in
2019 from 1.9% last year, before picking up to 1.2% in 2020 as domestic
demand improves, according to the central bank.

 

 

 

Gerald Group unit to suspend iron ore mining in Sierra Leone

FREETOWN (Reuters) - SL Mining, a subsidiary of U.S. commodity trader Gerald
Group, will suspend iron ore mining operations in Sierra Leone over a
dispute with the government about royalty payments, a company letter seen by
Reuters showed on Friday.

 

SL Mining filed for arbitration last month in an international court against
Sierra Leone’s government after authorities imposed a ban in July on exports
from the company’s Marampa mine.

 

The government says the company has failed to maintain the mine’s agreed
work schedule or make royalty payments. SL Mining denies the accusation.

 

A Gerald Group spokeswoman declined to comment on the letter itself, which
was sent to mine staff on Thursday.

 

The spokeswoman said: “The company is disappointed and concerned that the
government appears unwilling at present to seriously engage or commit to any
process with a view to resolving the unlawful and indefinite export ban.”

 

Sources within Gerald Group said the mine would suspend operations as early
as next week, and that nearly 1,000 local employees would be placed on
leave.

 

SL Mining estimates that Marampa holds about 1 billion tonnes of iron ore
with a potential lifespan of 30 years.

 

 

 

Ghana expected to produce 850,000 tonnes of cocoa in 2019/20 season:
industry regulator

LISBON (Reuters) - Ghana, the world’s second largest cocoa producer, is
expected to produce 850,000 tonnes of cocoa in 2019/20 season, at the lower
end of average levels on account of the swollen shoot disease outbreak, the
country’s industry regulator said on Thursday.

 

Ghana’s annual cocoa production is usually between 850,000 and 900,000
tonnes, though the country had an official forecast of 900,000 tonnes for
the current 2018/19 season, which ends this month.

 

“Swollen shoot is the main factor bringing down production,” Joseph Boahen
Aidoo, chief executive of the Ghana Cocoa Board (Cocobod), an industry
regulator, told Reuters on the sidelines of the European Cocoa Forum in
Lisbon.

 

Aidoo also said Ghana would announce the official farmgate price for the
2019/20 season on Oct. 1. The farmgate price is a fixed annual price set and
paid by the government to farmers each season.

 

Ghana’s cocoa output is expected to fall to 830,000 tonnes in the 2018/19
season, which ends this month, on account of unfavourable weather and
swollen shoot disease, according to the International Cocoa Organisation
(ICCO).

 

Ghana’s fight against the disease has prompted Cocobod to replant of 400,000
hectares of cocoa plants. It will take at least three to five years for the
replanted surfaces to come into production.

 

 

 

South Africa maize expected to be slightly higher than previous estimate

JOHANNESBURG (Reuters) - South Africa’s 2019 maize harvest forecast is
expected to be 0.17% higher than August’s estimate on better yields and
early deliveries, a Reuters survey showed on Friday.

 

The government’s Crop Estimates Committee (CEC) is expected to peg the
harvest at 11.035 million tonnes, up from its August estimate of 11.016
million tonnes, a poll of five traders and market analysts showed.

 

The CEC will provide its eighth and final production forecast for the
2018/19 season on Friday.

 

“Maize deliveries for the 2019 season thus far, including early deliveries
between March and April 2019, as well as expected forecasted deliveries
...suggest that we could see a slight increase in the headline crop estimate
figure,” said Warren Langridge, a trader at Riddermark Capital.

 

The poll sees the 2019 harvest consisting of 5.548 million tonnes of the
food staple white maize and 5.487 tonnes of yellow maize, which is used
mainly in animal feed.

 

The estimate for the 2018/2019 season is 13% lower than the 12.510 million
tonnes harvested in 2017/2018, after dry weather delayed plantings.

 

The crop is expected to be larger than the country’s annual consumption of
about 10 million tonnes.

 

 

Thomas Cook collapses as last-ditch rescue talks fail

Thomas Cook has collapsed after last-minute negotiations aimed at saving the
holiday firm failed.

 

The UK Civil Aviation Authority (CAA) said the tour operator has "ceased
trading with immediate effect".

 

It has also triggered the biggest ever peacetime repatriation aimed at
bringing more than 150,000 British holidaymakers home.

 

Peter Fankhauser, Thomas Cook's chief executive, said the firm's collapse
was a "matter of profound regret".

 

The tour operator's failure puts 22,000 jobs at risk worldwide, including
9,000 in the UK.

 

Transport Secretary Grant Shapps said the tour operator's collapse was "very
sad news for staff and holidaymakers".

 

He urged holidaymakers to be "understanding with staff" amid the "enormous"
task of bringing people home.

 

Mr Shapps has announced that the government and CAA has hired dozens of
charter planes to fly customers home free of charge.

 

The emergency operation, codenamed Operation Matterhorn, will aim to bring
home Britons currently on holiday with the firm.

 

On Sunday, empty aircraft had already started to be flown overseas, ready to
bring British tourists home on Monday.

 

The CAA said in a statement: "All Thomas Cook bookings, including flights
and holidays, have now been cancelled.

 

"We know that a company with such long-standing history ceasing trading will
be very distressing for its customers and employees and our thoughts are
with everyone affected by this news."

 

All customers currently abroad with Thomas Cook who are booked to return to
the UK over the next two weeks will be brought home "as close as possible"
to their booked return date, a statement said.

 

Flights will start operating from Monday, with details of each flight to be
posted on a dedicated website as soon as they are available.

 

Customers have been urged not to cut short their holiday or go to the
airport without checking the website for more information about their return
journey.

 

The UK CAA is also contacting hotels accommodating Thomas Cook customers,
who have booked as part of a package, to tell them that the cost of their
accommodation will be covered by the government, through the Air Travel
Trust Fund/ATOL cover.

 

Thomas Cook had secured a £900m rescue deal led by its largest shareholder
Chinese firm Fosun in August, but a recent demand from its lending banks to
raise a further £200m in contingency funding had put the deal in doubt.

 

The holiday company had spent all Sunday in talks with lenders trying to
secure the additional funding and salvage the deal, but to no avail.

 

Media captionForeign Secretary Dominic Raab said that people "will not be
stranded" if Thomas Cook collapsed

It had also asked the government for financial aid, a solution also urged by
Labour and union groups.

 

But on Sunday Foreign Secretary Dominic Raab told the BBC the government did
not "systematically step in" when businesses went under unless there was "a
good strategic national interest"

 

Customers on a package holiday have Atol protection - a fund paid for
through industry levies - which will cover the cost of their holiday and
repatriation.

 

Thomas Cook has blamed a series of issues for its problems including
political unrest in holiday destinations such as Turkey, last summer's
prolonged heatwave and customers delaying booking holidays because of
Brexit.

 

But the firm has also faced fierce competition from online travel agents and
low-cost airlines.

 

In addition, many holidaymakers are putting together their own holidays and
not using travel agents.

 

What are your rights?

If you are on a package holiday you are covered by the Air Travel
Organiser's Licence scheme (Atol).

 

The scheme will pay for your accommodation abroad, although you may have to
move to a different hotel or apartment.

 

Atol will also pay to have you brought home if the airline is no longer
operating.

 

If you have holiday booked in the future you will also be refunded by the
scheme.

 

If you have booked a flight-only deal you will need to apply to your travel
insurance company or credit card and debit card provider to seek a refund.

 

When Monarch Airlines collapsed in 2017, the government organised to bring
home all the stranded passengers, whether they were covered by Atol or
not.--BBC

 

 

 

India-US trade : Is Trump right about India's high tariffs?

Claim: India imposes very high tariffs on imports - some of the highest in
the world - according to US President Trump.

 

Verdict: It's true that average tariffs in India are much higher than in the
world's biggest economies, and they are also among the highest compared with
other emerging economies. But other countries have high tariffs on specific
products, and the US has imposed tariffs on more than $360bn worth of
Chinese goods in its trade war with Beijing.

 

Trade between India and the US is expected to be a key issue during Prime
Minister Narendra Modi's visit to the US this week.

 

Tensions have been growing. with President Trump saying India's tariffs -
taxes on imports - are "unacceptable," and describing India as the "king" of
tariffs.

 

Senior US Republican senator Lindsey Graham recently said India was "the
worst" when it came to tariffs on US products.

 

An official US report this year said India's tariff rates on other members
of the World Trade Organization (WTO) remain "the highest of any major
economy."

 

The report referred to the average tariff rate which members of the WTO
apply to each other when they don't share a trade agreement.

 

India's average tariff rate in 2018 was 17.1% - that is significantly higher
than the US, Japan and the EU, all of whom had rates of between 3.4% and
5.2%.--BBC

 

 

 

Sirius Minerals: The people who spent thousands on a Yorkshire mine

For Nigel Howard, the chance to invest in the biggest mine to be built in
the UK for a generation was too good an opportunity to miss.

 

The £4bn project - to dig up a mineral used in fertilising crops from
underneath the North York Moors National Park - would potentially create
thousands of jobs for a region with the highest unemployment rate in England
and Wales.

 

So convinced was Mr Howard of its merits that the 76-year-old local man
cashed in his entire £30,000 pension pot to buy shares in Sirius Minerals,
the company behind the massive fertiliser scheme.

 

Now, however, like thousands of other individual investors, the pensioner
finds himself stuck in a hole he can't get out of.

 

PM asked to help secure future of North Yorkshire mine

Giant Yorkshire mine faces uncertain future

Northern Powerhouse 'undermined' by austerity, five years on

"It looks as if we're in dire straits with what's going on," said Mr Howard.

 

This week, Sirius Minerals' share price plunged by 60% when it was forced to
pull plans to raise $500m.

 

 

The money was key to Sirius' future. Securing the funds would unlock a
further $2.5bn (£2bn) in financing from US investment bank JP Morgan.

 

Sirius has embarked on a strategic review, and unless the company finds
another way to raise the money in next few months, its future looks bleak.

 

"We can't do anything at present," said Mr Howard, who initially bought
shares at 24p each. "We can't pull out because [the share price] is
basically next to nothing."

 

 

Sirius Minerals has begun construction on the £4bn fertiliser mine project

Mr Howard said that before the Sirius investment "I was just content for a
life of retirement and just enjoy my pensions. But I'm now down to the
normal old age [state] pension".

 

Regeneration

The company has 85,000 individual shareholders. About 10,000 of these are
located in areas surrounding the Teesside project, where many people no
doubt invested because of the regenerative benefits for the North East.

 

At 5%, the region has the highest unemployment rate in England and Wales,
according to the Office for National Statistics. Sirius said the project
would generate about 4,000 jobs.

 

The plan is to develop the Woodsmith mine, near Whitby, to give the company
access to a vast deposit of polyhalite, which can be used as a fertiliser.

 

 

Polyhalite can be used as a fertiliser for crops

The polyhalite will be transported along a 23-mile tunnel and conveyor belt
to Teesside near the former Redcar steelworks, which closed in 2015 and cost
2,200 people their jobs.

 

When Andrew Davies, 59, and his friend were weighing up whether to invest in
Sirius six years ago, the boost to the local economy was a factor in their
decision.

 

"Lots of the locals were really, really happy because obviously it is
regeneration of their area which is fantastic," he said.

 

"Because the share price at the time was quite low, we thought it had great
growth, it would supplement our pensions and support a British company as
well."

 

Fortunately, Mr Davies bought some Sirius shares when they were less than a
penny and the highest he paid was 7p.

 

Still, he has put £60,000 of his money into the company. "I'm obviously very
upset as to what has gone on," he said.

 

Conserving cash

It also emerged this week that the government would not provide a $1bn loan
guarantee to Sirius. "The government in reality should be backing this," he
said. "It is a massive boost for the country."

 

Financially, Mr Davies said it hasn't created difficulties for him. "Right
from day one, I've made sure that my investments don't impair any of my
pensions as such, because at the end of the day this was something that was
to enhance my pension not to take a risk with my pension."

 

But he can't really do much with his Sirius shares.

 

 

The Woodsmith mine site near Whitby

In an effort to conserve cash, Sirius has slowed work at the site where
1,200 people have been working, the vast majority of which are employed by
third party construction firms.

 

Sirius had hoped to start producing polyhalite next year. It has struck
deals to supply 11.7 million tonnes of it a year to businesses.

 

However, it is yet to sink two shafts to a depth of 1,500 metres at the
Woodsmith mine to allow for production.

 

The race is now on to find an investor to fund the next stages of
development - or maybe even a buyer for the business.

 

Mr Davies is going to hang onto his shares. "There is no point in selling
them now at such a loss. You may as well keep hold of them now and believe
the Sirius line that one day it will come to fruition."

 

Mr Howard said the situation is "very distressing especially for myself and
my wife at our age".

 

He said "We know that buying stocks and shares is a gamble but this looked
so, so good and they've already got massive orders in the pipeline from
other countries.

 

"Personally, I don't think it will fail, I hope not anyway. I think we're
just in for a rough, rocky ride for a few years."--BBC

 

 

 

Huge rise in catalytic converter thefts

There has been a huge rise in catalytic converters being stolen from cars in
2019, police in London say.

 

For the first six months of 2019, the number of thefts of catalytic
converters jumped to 2,894, compared to 1,674 thefts for all of 2018.

 

In a car's exhaust system, catalytic converters clean up harmful gases
before they exit the exhaust pipe.

 

In a video seen by the BBC, a criminal gang stole a catalytic converter in
under three minutes in broad daylight.

 

The prices of certain precious metals have skyrocketed in the last 18 months
- palladium is now worth £1,300/oz, while rhodium goes for £4,000/oz,
according to FJ Church and Sons, a specialist metals merchant that is also
the UK's largest specialist in recycling catalytic converters.

 

The police urged vehicle owners "to be vigilant" and consider taking safety
measures to protect their cars.

 

How the theft works

A catalytic converter is located in a box on the exhaust pipe under a car.
In order to steal it, thieves slide under the car and use high-powered
cutting tools to detach the box from the pipes around it.

 

Although there are 10,000 different types of converters, the cars that are
most often targeted are hybrid vehicles.

 

Since hybrid cars have two power sources - electric and petrol or diesel -
the catalytic converter is used less frequently to process pollutants. The
metals are less likely to corrode, meaning they are worth more and thus
attractive to thieves.

 

Precious metals must be used because the converters have to work efficiently
enough to meet emissions standards.

 

What can we do about it?

The police has advised that vehicle owners consider taking the following
safety measures:

 

Mark catalytic converters with a serial number to make it distinctive

Place a protective covering over the catalytic converter

Install CCTV and alarms

Park vehicles so as to prevent access underneath

Carmaker Toyota is very concerned about the thefts, and says it is "doing
all [it] can" to support its customers who have been victims of crime.

 

Besides consulting with the police and offering customers safety tips,
Toyota has developed "Catloc", a device which makes it harder for thieves to
detach the catalytic converter from the bottom of the car.

 

"Although 'cat theft' is not new, or limited to Toyota products, it has
always been comparatively rare; however, the recent rise in the value of
such parts for recycling has meant that police forces have seen a very
significant rise in these offences in the last few months," said a Toyota
spokesman.

 

Toyota does not make money when replacing stolen catalytic converters in
cars, and it is also bearing the cost to discount the Catloc device for its
customers, while it researches more anti-theft technologies, the BBC
understands.

 

Honda has a different take on the matter - it says that Honda Accord and
Jazz models from 2008 onwards come with a tray under the car to make it
harder for thieves to get at the catalytic converter.

 

And in car models from 2015 onwards, the catalytic converter has been placed
within the engine bay, so a thief would need to disassemble the car to get
at it.

 

Cracking down on scrap metal yards

Dafydd Dylan, commercial manager of the catalytic converters division at FJ
Church and Sons, told the BBC that his firm is constantly receiving calls
from members of the public asking how much they could get if they were to
sell catalytic converters from car models such as Totoya Prius, Honda Accord
and Honda Jazz.

 

"We do what we can to discourage it - we don't purchase any units from these
models unless they come from a reputable dealer," he said.

 

He added that there were also ways to tell if suppliers were trying to sell
stolen goods: "When we get a packet, usually there will be a range of
low-end and high-end catalytic converters in it.

 

"We have refused to work with some suppliers for certain packets containing
a disproportionate amount of high-grade scrap converters."

 

 

Toyota says it is trying to support its customers while consulting with the
police to improve anti-theft measures

However, although it has been illegal to pay cash for scrap metal since
2013, he says there are some dealers who will pay cash for catalytic
converters, which tempts the thieves.

 

"The police needs to start to put people in jail for paying cash for scrap
metal - as soon as they do that, the trade would slow down and stop," he
said.

 

The British Metals Recycling Association agrees: "It is unlikely that any
stolen catalytic converters will enter a BMRA member yard due to 'know your
customer' checks.

 

"However, there will be yards that operate illegally, willingly take stolen
material and pay cash for it. There will also be no record of the
transaction. This is due to the lack of enforcement of the Scrap Metals
Dealers Act 2013 and its complementary legislation in Scotland, The Air
Weapons Licensing Act 2015."--BBC

 

 

 

Why is the Fed pumping money into the banking system?

The US central bank has pumped more than $200bn (£160bn) into the financial
system this week - the first time there's been such an intervention since
2008.

 

The Federal Reserve's aim was to stabilise what is usually a calm part of
the market.

 

Interest rates in the so-called "repo market" had shot up to 10% in some
cases - although the cost of borrowing in that market more typically hovers
around the benchmark rate set by the Fed - around 2%.

 

So what happened and should we worry?

 

First things first: what's the repo market?

Banks, hedge funds and other players borrow money regularly on a short-term
basis to ensure their books are in order, no matter what their daily
activities.

 

The borrowers typically offer government bonds or other high quality assets
as collateral, which they repurchase, plus interest, when they repay the
loan - often the next day.

 

Those repurchase agreements give the repo market its name.

 

What happened this week?

This is a huge market, with some $3tn changing hands each day, according to
the US Office of Financial Research.

 

Under normal conditions, interest rates in the repo market are low, since
the loans are considered safe and there's plenty of cash on hand.

 

But this week the cost of borrowing shot up - toward 10% in some cases. And
the rate at which banks lend to each other - the Fed's benchmark - exceeded
2.25%, the top of its desired range.

 

The rise prompted the Fed to take action. Four times this week, it injected
money into the market, offering to buy up to $75bn in treasuries or other
assets from banks in a bid to boost bank reserves and keep them lending.

 

Why did the rates suddenly spike?

Strains in the repo market were among the first signals of trouble ahead of
the 2008 financial crisis. Back then banks had suddenly become wary of
lending, worried there were unforeseen risks associated with assets that had
previously been considered safe.

 

This time, analysts think what's happening is caused by an issue with money
supply.

 

 

The Federal Reserve has intervened to ensure enough cash is available

Money has been sucked out of the market by two events that happen to have
coincided. The first is a tax deadline which means firms need cash to pay
what they owe the taxman. The second is the due date for payments on a
recent offering of government bonds.

 

On top of that the Fed has also been steadily reducing the overall supply of
money in the market, aiming to get conditions closer to how they were before
the financial crisis.

 

Is that the mystery solved then?

A lot of people still don't think those explanations are enough to explain
the scale of the interest rate rise.

 

"The thing that's really confounding is just how much rates moved in a short
time," says Zachary Griffiths, rate strategist at Wells Fargo.

 

"Everyone's kind of trying to get a firmer grasp... on all the different
nuances that could have led to such a big move."

 

There could be other one-off factors triggering this spike, such as an oil
bet that went bad after the attack on Saudi Arabia, says Priya Misra, head
of global rates strategy at TD Securities.

 

But she notes that the repo market also showed signs of stress in April and
December, suggesting an underling structural issue - namely that the Fed has
gone too far in reducing reserves.

 

"We are in uncharted waters," she says. "The Fed is trying to figure out the
appropriate level of excess reserves."

 

Should we be worried?

On Wednesday, Federal Reserve Chair Jerome Powell conceded that the Fed had
not anticipated such a large spike in interest rates, despite warnings of a
possible crunch.

 

Mr Powell was also quick to talk down concerns that the issue signals a
bigger problem or that the bank had lost its grip on its policy.

 

US Fed cuts rates for second time since 2008

Why the Fed's interest rate move matters

"We don't see this as having any implications for the broader economy, or
for the economic outlook, nor for our ability to control rates," he said.

 

And the Fed used to conduct these kinds of market operations prior to the
financial crisis, without prompting undue concern.

 

Did the Fed's intervention work?

Rates dropped back following the Fed's action, and so far stock markets and
other parts of the system don't appear to have been affected.

 

But analysts warn that the turmoil is likely continue, saying the
end-of-quarter rush to square up company balance sheets could cause more
stress.

 

"Our big takeaway there is, we're going to have to keep an eye on this,"
says Mr Griffiths.--BBC

 

 

 

India delivers surprise corporate tax cuts to boost economy

India has cut its corporate tax rates in an effort to spur investment and
boost growth in the country's faltering economy.

 

Finance Minister Nirmala Sitharaman said the base corporate tax rate would
be lowered to 22% from 30%.

 

The surprise move triggered a stock market rally, with the Sensex index
jumping 4.5%.

 

The tax cuts are the latest measures to boost spending and shore up
investment in India.

 

Under the slate of reforms announced on Friday, India will lower its
corporate tax rate to 22% from 30% for companies that don't seek exemptions.

 

Firms that do receive incentives or exemptions will see their tax rate cut
to 25% from 35%.

 

In addition, some new manufacturing firms will see their corporate tax rate
lowered to 15% from 25%.

 

A Prasanna, head of research at ICICI in Mumbai, said the move would boost
investment and employment.

 

"This is a long overdue and hugely positive move by the finance minister.
The new rates simplify the tax architecture and it will give a fillip to
investments and jobs," he told Reuters.

 

Viewpoint: How serious is India's economic slowdown?

India's economic growth is sitting at a six-year low and the government has
taken a series of steps to boost the economy.

 

So far this year, India's central bank has cut rates four times and the
benchmark rate currently sits at a near-decade low.

 

The country has relied on domestic consumption to fuel growth but spending
has slowed sharply.--BBC

 

 

 

Walmart ceases e-cigarette sales

Walmart has said it will no longer sell e-cigarettes in the US, amid
mounting calls to ban the products entirely.

 

The retailer said its decision was due to "uncertainty" about the rules
governing e-cigarettes, which US health authorities have linked to more than
500 cases of lung injury.

 

US President Donald Trump last week said the US would prohibit sales of all
flavoured e-cigarettes.

 

Two states - New York and Michigan - have already imposed such bans.

 

On Friday a group of US senators called on health authorities to remove all
pod and cartridge-based e-cigarettes from the market until it can be proven
the products are safe.

 

The crackdown has also spread overseas, where this week India said it would
ban e-cigarettes.

 

"Given the growing federal, state and local regulatory complexity and
uncertainty regarding e-cigarettes, we plan to discontinue the sale of
electronic nicotine delivery products at all Walmart and Sam's Club US
locations," Walmart said.

 

"We will complete our exit after selling through current inventory."

 

Vaping backlash

E-cigarettes were initially welcomed as a safer alternative to traditional
tobacco cigarettes.

 

Doctors, public health experts and cancer charities in the UK continue to
say that, based on current evidence, e-cigarettes carry a fraction of the
risk of cigarettes.

 

In the US, however, a surge in teen vaping has spurred a backlash against
the products, which contain nicotine, which is addictive.

 

This summer, the US Centers for Disease Control linked vaping to a
mysterious outbreak of lung injuries, in which eight people have died and
more than 500 taken ill so far.

 

All of the cases involve patients with a history of vaping or e-cigarette
product use. Most but not all have also reported using THC, the chemical in
marijuana, the agency said.

 

In May, Walmart, America's biggest retailer, said it would stop selling
fruit-flavoured e-cigarettes, which have been blamed for appealing to youth.

 

Walmart continues to sell guns and traditional cigarettes, but it has
imposed new limits on those products.

 

In May, the company said it would not sell traditional cigarettes to those
under the age of 21.

 

Walmart also announced this month that it would stop sales of certain types
of ammunition and guns.--BBC

 

 

 

RBS is first UK big four bank to be led by a woman

RBS has named Alison Rose as its new chief executive, making her the first
woman to lead one of the UK's big four banks.

 

Ms Rose, who joined the bank 27 years ago as a graduate trainee, will
replace the incumbent Ross McEwan in November.

 

She will be paid more than her predecessor, with her annual salary set at
£1.1m compared with Mr McEwan's £1m.

 

Ms Rose is currently the chief executive of the commercial and private
banking division.

 

Other lenders have been led by women. Ana Botin was formerly in charge of
Santander UK, while Dame Jayne-Anne Gadhia was chief executive of Virgin
Money before it was sold to CYBG last year.

 

However, Ms Rose is the only woman so far to lead one of the UK's four
biggest banks, which are RBS, Lloyds Banking Group, Barclays and HSBC.

 

It also means that two of the most senior roles at RBS will be held by
women, after Katie Murray was promoted to chief financial officer earlier
this year.

 

 

RBS is still majority-owned by the UK government

"Rose looks like a continuity candidate, given she has 27 years at the bank,
and she was the favourite for the role," said Russ Mould, investment
director at online broker AJ Bell. "It is notable that she will be the first
woman to head a major British bank," he added.

 

RBS remains majority-owned by the UK government, with a stake of 62%, after
it was bailed out with £45.5bn of taxpayers' money during the financial
crisis.

 

Ms Rose said she was "looking forward to getting started" in her new job,
adding: "Maintaining the safety and soundness of this bank will continue to
underpin everything we do."

 

The RBS veteran has been widely tipped to replace Mr McEwan, who will become
chief executive of National Australia Bank.

 

Ms Rose joined NatWest straight from university in 1992, before the bank was
bought by RBS eight years later.

 

Diverse banker

She studied history at Durham University and is married with two children.

 

Ms Rose helped restructure the bank's balance sheet in the aftermath of the
financial crisis, a process which she described as "challenging".

 

As well as heading RBS's commercial and private banking, Ms Rose is
currently deputy chief executive of NatWest Holdings, which includes the
large retail bank, but whose funding is kept separate from the riskier
investment banking operations.

 

Her roles at the bank have been diverse.

 

Earlier in her career she was head of non-investment grade origination in
the bond market - raising money for companies with poor credit.

 

She then had senior roles in the lender's investment bank before being
promoted to leading its commercial and private banking, which includes
bankers to the Queen, Coutts; and Lombard, which lends to companies so they
can buy boats, vehicles, machinery and aircraft.

 

She was also commissioned by the Treasury to lead a review into the barriers
women face in entrepreneurship, which was published earlier this year.--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
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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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