Major International Business Headlines Brief::: 26 September 2019

Thu Sep 26 02:45:32 CAT 2019

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Major International Business Headlines Brief::: 26 September 2019

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*  South Africa records FDI inflows of 26.3 bln rand in Q2

*  Tanzania's mobile phone subscriptions rise to nearly 44 million

*  Kenyan central banker sees easing cycle if fiscal cuts sustained

*  Kenya central bank says banking sector consolidation to continue

*  Uganda shilling unchanged, expected to strengthen due to charity inflows

*  Morocco central bank holds benchmark interest rate at 2.25%

*  Kenyan budget carrier Jambojet to double passengers in three years

*  Thomas Cook collapse to cost Morocco hotels $20 mln -tourism body

*  U.S.-China trade rhetoric, Trump impeachment inquiry pull stocks lower

*  Egypt, Qatar trade barbs at U.N. on Libya conflict interference

*  Peloton: 'It's borderline addiction'

*  IMF names Kristalina Georgieva as new head

*  Juul boss Kevin Burns steps down amid vaping concerns

*  Thomas Cook collapse: German company files for bankruptcy

*  How did oil become so important?

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South Africa records FDI inflows of 26.3 bln rand in Q2

PRETORIA (Reuters) - South Africa saw larger foreign direct investment (FDI) inflows in the second quarter than the first quarter as domestic firms received debt and equity funding from foreign parent companies, central bank data showed on Wednesday.

Africa’s most industrialised economy had FDI inflows of 26.3 billion rand ($1.76 billion) in the second quarter from inflows of 11.7 billion rand in the first three months of the year, the South African Reserve Bank (SARB) said in its Quarterly Bulletin.

The country registered portfolio investment inflows of 10 billion rand from April to June from inflows of 29.2 billion rand in the prior quarter, the SARB said.

South Africa relies heavily on foreign money to cover its large budget and current account deficits, with data showing that foreign investors held 37.3% of South African government bonds as of August.

But investor confidence in South Africa remains fragile, while the economic growth outlook is clouded by a lack of clarity and progress on reforms.

The financial account of South Africa’s balance of payments recorded an inflow of capital of 13.2 billion rand, or 1% of GDP, in the second quarter from 24.1 billion rand in the first quarter.

($1 = 14.9617 rand)

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Tanzania's mobile phone subscriptions rise to nearly 44 million

DAR ES SALAAM (Reuters) - Tanzania’s mobile phone subscriptions rose to 43.67 million in the three months ending in June, a 4.7% increase from a year earlier, an official report showed on Wednesday.

Vodacom Tanzania, a subsidiary of South Africa’s Vodacom Group, remained the market leader for both mobile phone subscribers and mobile money transfers.

   As in many other African countries, mobile phone use has surged in Tanzania over the past decade, underpinned by the availability of cheaper smartphones.

    The number of internet users in the East African country rose to 23.14 million in June, up from 22.99 million a year ago, the state-run Tanzania Communications Regulatory Authority (TCRA) said in a report.

    The number of people using mobile money transfers rose to 22.9 million in second quarter from 20.8 million previously.

    Vodacom Tanzania increased its share of the mobile phone subscription market share slightly to 33% from 32%.

    Other major mobile operators in Tanzania include Tigo, part of Sweden’s Millicom with a 27% market share, Airtel, a unit of India’s Bharti Airtel on 26% and Halotel, owned by Vietnam’s Viettel, with 10%.

Vodacom Tanzania also holds a 41% share of the country’s thriving mobile money business, which handled transactions worth 8.3 trillion Tanzanian shillings ($3.6 billion) in June, according to TCRA.

($1 = 2,293.0000 Tanzanian shillings)

Kenyan central banker sees easing cycle if fiscal cuts sustained

NAIROBI (Reuters) - Kenya’s central bank will start loosening its monetary policy if the government sustains efforts to cut a gaping budget deficit, the bank’s governor said on Tuesday.

The finance ministry has set a fiscal deficit of 5.9% for this fiscal year (July 2019-June 2020), which will be lower than the actual deficit of 7.6% in the 2018/19 financial year, Governor Patrick Njoroge told a news conference.

“If this continues there will be scope for monetary accommodation, so a sort of loosening of monetary policy as fiscal policy tightens,” he said.

President Uhuru Kenyatta’s government has been criticised for increasing borrowing since coming to power in 2013. Total public debt stands at 55% of GDP, up from 42% when he took over.

The envisaged rebalancing of fiscal and monetary policy would stabilise the management of the economy and give authorities room to manoeuvre in case of unforeseen shocks in the future, Njoroge said.

“Fiscal (Treasury) had its foot flat out on the accelerator and we as monetary authorities, in order for the thing not to crash, we had our foot firmly on the brake,” he said.

“The car obviously was struggling...you can’t continue like that for too long.”

Policymakers held the benchmark lending rate at 9.0% on Monday, saying inflation was well anchored within the government’s preferred band.

The oil price spike caused by an attack earlier this month on Saudi Arabia’s largest oil processing facility would have little impact on inflation, the governor said.

“It won’t have a significant impact on inflation,” he said.

The central bank still expected the economy to grow by 6% this year, Njoroge said, citing good performance in the tourism sector, a top hard currency earner and employer for Kenya.

The bank was set to review that growth forecast when the statistics office issues growth numbers for the second quarter at the end of this month, he added.

He warned, however, that there were significant risks, including the U.S.-China trade war and the ensuing softening of the global economy.

“The external sector is worsening dramatically,” he said.

“On top of that there is uncertainty about the policy response to the things that are happening in the global environment.”

On the banking sector, Njoroge said he expected recent consolidation in the sector to continue.

“We are not done yet,” he said, adding that the market-driven consolidation was working.

There has been significant deals among lenders since two mid-sized lenders were closed in 2015/16 due to liquidity problems. The most recent major transaction was the acquisition of National Bank of Kenya by KCB Group.

Kenya central bank says banking sector consolidation to continue

NAIROBI (Reuters) - Kenya central bank governor said on Tuesday ongoing consolidation in the banking sector will continue.

“We are not done yet,” Patrick Njoroge told a news conference, adding that the market-driven consolidation was working.

There has been significant consolidation among Kenyan banks since two mid-sized lenders were closed due to liquidity problems, with the most recent major deal being the acquisition of National Bank of Kenya by KCB Group.

Uganda shilling unchanged, expected to strengthen due to charity inflows

KAMPALA (Reuters) - The Ugandan shilling was unchanged on Tuesday and was forecast to gain ground, helped by dollar inflows from non-governmental organisations.

At 1108 GMT, commercial banks quoted the shilling at 3,670/3,680, the same level as Monday’s close.

Morocco central bank holds benchmark interest rate at 2.25%

RABAT (Reuters) - Morocco’s central bank kept its benchmark interest rate unchanged at 2.25 on Tuesday, saying current borrowing costs were in line with the medium-term prospects of inflation, growth and public finances.

Inflation is expected to slow to 0.7% in 2019 from 1.9% last year on the back of a drop in food prices, before picking up to 1.2% in 2020 as domestic demand improves, the bank said in a statement following its board meeting.

Kenyan budget carrier Jambojet to double passengers in three years

NAIROBI (Reuters) - Kenya’s first low-cost airline, Jambojet, plans to more than double its annual passengers to 1.5 million in the next three years by opening new routes in East Africa and flying planes more often, its chief executive said on Wednesday.

The no-frills carrier, founded by Kenya Airways five years ago, ferries 700,000 passengers a year within Kenya and to neighbouring Uganda after an aggressive expansion aimed at first time flyers who would normally take a bus.

Like budget carriers in Europe and South Africa, Jambojet passengers only pay for seats. The airline charges extra for services such as baggage and meals, allowing ticket prices to compete with buses and trains.

“People like this model, they are flying this model,” Allan Kilavuka, Jambojet’s CEO, told Reuters in an interview.

The airline has grown traffic by a compounded annual rate of 25%, giving it a modest return, Kilavuka said, although he declined to give figures.

Except for Ethiopian Airlines, most bigger carriers in the region are loss-making, including Kenya Airways, which parliamentarians voted to re-nationalise in July.

“We are profitable,” Kilavuka said. “The margins are very thin given the costs that we have to incur, and the challenge is to maintain this profitability because the industry is volatile.”

Jambojet operates six De Havilland Q-400 planes and plans to get two more by year’s end, Kilavuka said.

It flies to five destinations in Kenya and to Entebbe in neighbouring Uganda and plans to start flights to South Sudan, Rwanda, Tanzania, Somalia, Democratic Republic of Congo and Comoros.

The carrier also wants to boost daily usage of its planes from eight hours to 10 or 13 hours, he said, a move that would give it excess capacity.

Air travel in Africa is growing at about 6% per year, the CEO said, but from a low base.

“We need to scale up but that needs to be done responsibly so you don’t overheat,” he said. “It (the budget carrier model) is more manageable. It is easy for you to flex and change.”

Thomas Cook collapse to cost Morocco hotels $20 mln -tourism body

(Reuters) - The collapse of British travel operator Thomas Cook has left Moroccan hotels facing unpaid bills of about 200 million dirhams ($20 million), the head of Morocco’s tourism federation said on Wednesday.

Thomas Cook operated two flights a week from Manchester to Marrakech and dealt with some 50 hotels in Marrakech and Agadir.

Morocco’s tourism industry had 2018 revenue of 73.2 billion dirhams, a key source of hard currency for the country.

“The loss of some 100,000 tourists ferried by Thomas Cook will take a toll on Morocco’s tourism sector,” Abdellatif Kabbaj told Reuters.

The government should help professionals mitigate the losses and avoid bankruptcy and layoffs by hotels, he said.

“There is no insurance for this sort of risk and there should be one to cover Moroccan professionals from such a loss.”

Morocco’s tourism ministry said it has created a crisis unit to handle the fallout of the Thomas Cook collapse.

A source at the ministry said some 1,300 Thomas Cook client were still in Morocco on Wednesday after about 180 had left.

The first flight for Thomas Cook clients from Morocco departed as planned on Wednesday, the British embassy in Rabat said in a statement.

Morocco’s tourism promotion office signed an agreement with Thomas Cook in 2017 hoping to attract 400,000 tourists by 2020.

Arrivals in Morocco, including Moroccans living abroad, hit 12.3 million tourists in 2018. 

U.S.-China trade rhetoric, Trump impeachment inquiry pull stocks lower

(Reuters) - Emerging market shares slid to their lowest level in nearly three weeks on Wednesday as the latest exchanges between Washington and Beijing and political uncertainty in the United States made investors wary of betting on riskier assets.

U.S. President Donald Trump delivered a stinging rebuke over China’s trade practices on Tuesday at the United Nations General Assembly, saying he would not accept a “bad deal” in U.S.-China trade negotiations.

China’s top diplomat hit back saying Beijing had no intention to “play ‘Game of Thrones’ on the world stage” and warned Washington to respect its sovereignty.

The bitter exchange of words came just a week before high-level talks are scheduled between the world’s two largest economies, denting hopes that a deal or even an interim arrangement can be reached.

MSCI’s index for emerging market stocks fell 0.6%, with Hong Kong and South Korea tumbling more than 1% and China mainland shares nearly matching those falls.

Further deepening worries was the call for an impeachment inquiry into Trump by U.S. lawmakers, increasing the prospects of prolonged political uncertainty in the world’s largest economy.

“Both of those factors have played into the moves today, with Asian markets taking the flak in particular,” said Jason Tuvey, senior EM economist at Capital Economics, London.

“We think trade tensions will only deteriorate in the coming months and add to the global headwinds, including growth, that have so far rattled markets this year.”

Currencies mostly headed south, with the high-yielding South African rand shedding nearly 1% against the dollar.

The rouble fell 0.4%, additionally pressured by lower oil prices but support from local month-end tax payments limited its slide.

In emerging Europe, focus was on the Czech crown, down marginally, ahead of the central bank’s rate decision.

The Czech National Bank (CNB) is expected to hold rates and possibly keep them unchanged through 2020 as it balances inflationary pressures at home with policy easing and economic weakness abroad, a Reuters poll showed earlier this week.

Egypt, Qatar trade barbs at U.N. on Libya conflict interference

(Reuters) - Egypt and Qatar, who support rival groups in the Libyan conflict, traded barbs at the United Nations on Tuesday, highlighting just how difficult it will be for the U.N. to push renewed peace efforts.

Libya’s conflict has increasingly become a proxy war between foreign powers, which have been backing various armed groups since the 2011 uprising against Muammar Gaddafi. The former rebels have been fighting each other since then.

Egypt, along with the United Arab Emirates, is a supporter of Libyan eastern commander Khalifa Haftar, whose Libya National Army (LNA) has been trying to take Tripoli from forces allied with the internationally recognised government (GNA). Turkey and Qatar both back the GNA.

Without naming countries specifically, Egyptian President Abdel Fattah al-Sisi told delegates at the U.N. General Assembly that there had to be a concerted effort to stop militias taking control of Libya and preventing support form external actors.

“We need to work on unifying all national institutions in order to save our dear neighbour from the ensuing chaos by militias and prevent the intervention of external actors in Libya’s internal affairs,” Sisi said in a speech.

Haftar’s forces started a campaign in April with a ground offensive supported by air strikes and his backers have repeatedly labelled militias in Tripoli as terrorist groups.

The campaign has displaced more than 120,000 people in Tripoli alone, killed hundreds of civilians, and risks disrupting oil supplies from Libya.

“This conflict needs to be stopped. It is time to take a bold and decisive stand to address the root causes of the Libyan crisis comprehensively and can be achieved by fully committing to the United Nations plan,” Sisi said.

But addressing the same delegates shortly after, Qatar’s Emir, Sheikh Tamim bin Hamad al-Thani, accused Haftar’s forces of carrying out war crimes with impunity and with the support of countries that were undermining the GNA and U.N. peace efforts.

“The latest military operations on the capital Tripoli have thwarted the holding of the comprehensive Libyan national conference,” al-Thani said.

“There is an internationally recognised settlement, but certain countries say they formally participate in international efforts on one hand and then undermine these efforts on another hand by supporting warlords and terrorist militias for their narrow interests against the legitimate government,” he said.

Doha and Cairo’s differences were being openly voiced weeks after U.N. Libya envoy Ghassan Salame unveiled plans for an international conference to bring together foreign powers backing rival groups on the ground, without naming a venue.

Germany emerged as a possible location with Berlin trying to put it together by October.

Salame believes Germany can mediate because it is seen as impartial in the conflict in contrast to France and Italy, which have been competing for influence.

France and Italy have oil and gas interests in Libya and have been accused of also backing protagonists in the conflict.

Both countries brought Haftar and GNA Prime Minister Fayez al-Serraj, along with regional players, together in Paris and Palermo last year, but failed to achieve a breakthrough.

The two will host a ministerial meeting of countries involved in the Libyan conflict at the U.N. on Thursday, with the aim to bridge differences between all sides.

“There will no military solution in Libya. Those who believe it are wrong and risk dragging the country into a dramatic turn,” French Foreign Minister Jean-Yves Le Drian told reporters. 

Peloton: 'It's borderline addiction'

Joanna Sim is a self-confessed member of the Peloton cult. She gets up at 05:00 for the company's classes. She writes about them on her blog for working parents.

She doesn't just like Peloton, she says, she loves it.

"It's almost borderline addiction at this point," she says. Now she's planning to invest.

The company, which sells tech-enhanced exercise equipment tied to streaming fitness classes, will debut its shares on the Nasdaq stock exchange on Thursday, at a starting price of $29 apiece.

The offering will raise about $1.16bn, in a deal that values the firm at more than $8bn (£6.5bn).

It's a hefty number in a notoriously fickle industry.

Peloton acolytes such as Joanna say the company has matched exercise to the age of social media, combining the convenience of an at-home workout with the interaction and adrenaline rush of live classes.

The company, which was founded in 2012, has more than 500,000 subscribers. It went live in the UK and Canada in 2018 and in Germany in May. It has started branching out to new areas, offering classes in yoga and strength-training.

High-profile users include Kate Hudson, David Beckham, Leonardo DiCaprio, Michael Phelps, Usain Bolt and more.

Participation is expensive. Peloton's stationary bikes cost more than $2,200 and its treadmills, which it started selling last year, are almost double that. Unlimited access to the streaming classes runs to another $39 a month.

Despite the price tag, Joanna says she "took the plunge" last year, cancelling her gym membership and buying a bike in the hope it would make it easier to fit in more workouts.

The mother of two, who lives in California and works full-time as a design strategist at software company Intuit, has not been disappointed.

She says the flexibility of the company's programmes, and the "tribe" of fellow riders she interacts with during a regular 05:00 class, have kept her coming back for more, and more.

Her enthusiasm extends to the firm's financial prospects.

"They're going to IPO soon and I'm... all over it," she says.

Money spinner

Peloton made $915m in revenue in its most recent financial year, more than double the year before, which was double the year before that.

But growth has come with costs.

Peloton remains unprofitable, losing about $200m last year, as its marketing expense skyrocketed.

In the run-up to its flotation, music publishers hit the company with a $300m copyright lawsuit, accusing the firm of using music for its classes without permission.

And sceptics are asking if the firm, which today relies on big-ticket purchases of equipment, has staying power, given the appearance of lower-cost competitors and fast changing fitness fads.

"It's very difficult to double every year," says Rett Wallace, chief executive of research firm Triton. "Right now, it looks like we're still very much in a growth phase on the hardware but we don't know how long that will last." 

'Fitness is difficult'

Other fitness firms testing the public markets in recent years haven't fared particularly well.

Can Fitbit get itself back into shape?

Why are Americans hooked on SoulCycle?

The pricey cycling studio chain SoulCycle, which once claimed cachet similar to Peloton, filed flotation papers in 2015.

But the company, a subsidiary of property giant Related Co, dropped those plans last year, citing "market conditions". This summer, the mood soured farther, when owner Steve Ross's fundraiser for President Donald Trump triggered a customer boycott.

YogaWorks debuted on the Nasdaq in 2017, after a growth sprint fuelled by private equity backer Great Hill Partners turned it into one of the largest yoga chains in the US.

Less than two years later, the firm de-listed its shares, amid mounting losses and a warning from the exchange that the stock's price no longer met the minimum threshold.

And it's not just fitness chains focused on live classes that have struggled.

Shares in FitBit, which makes wearable fitness trackers, approached $50 in the summer of 2015, when the rapidly growing firm went public. But sales soon slumped and today, the shares trade at about $4.

"Hardware is difficult. Fitness is difficult," says Mr Wallace. "If you rely on the sale of hardware, even Apple shows us that if you're not reinventing your hardware all the time, your life can become difficult."

"Peloton seems to have established a brand for itself and has a very loyal user base," he adds. "We'll see if that sticks."

Joanna says she's heard the doubts but her experience convinced her that Peloton has a long ride ahead of it.

"Given the amount of content that they're pumping out and the leadership that they have... I have full confidence," she says.--BBC

IMF names Kristalina Georgieva as new head

Bulgarian economist Kristalina Georgieva has been selected as the new managing director of the International Monetary Fund.

Ms Georgieva, who was previously chief executive of the World Bank, becomes the first person from an emerging economy to lead the IMF.

She will succeed Christine Lagarde, who is leaving to become head of the European Central Bank (ECB).

Ms Georgieva was the only nominee for the job.

Who is Kristalina Georgieva?

The 66-year-old economist, the daughter of a civil engineer, studied political economy and sociology at the Karl Marx Higher Institute of Economics in Sofia while Bulgaria was still under communist rule.

After graduating in 1976, she got her first taste of capitalism in the UK, as a British Council scholar at the London School of Economics.

Since then, she has built up a strong background in the World Bank and the European Commission, having held various senior roles in both institutions.

She was commissioner in charge of the EU budget before she left to join the World Bank in January 2017.

The head of the IMF has traditionally been a European since the IMF was created in 1945.

Normally, she would have been considered too old for the job. But following pressure from France, the IMF waived its 65-year-old age limit for applicants.

What can we expect from her tenure at the IMF?

Ms Georgieva has been appointed for a five-year term, starting on 1 October.

Speaking after her selection by the IMF's executive board, she described herself as "a firm believer in its mandate to help ensure the stability of the global economic and financial system through international co-operation".

She added: "It is a huge responsibility to be at the helm of the IMF at a time when global economic growth continues to disappoint, trade tensions persist, and debt is at historically high levels."

She said the IMF's long-term aim was to support sound monetary, fiscal and structural policies to build stronger economies and improve people's lives.

"This means also dealing with issues like inequalities, climate risks and rapid technological change," she said.

"My goal is to further strengthen the Fund by making it even more forward-looking and attentive to the needs of our members."--BBC

Juul boss Kevin Burns steps down amid vaping concerns

Kevin Burns, chief executive of vaping firm Juul, has stepped down, amid growing concerns around vaping health risks and criticism of its marketing.

The firm has also announced it will withdraw all US advertising.

Mr Burns will be replaced immediately by KC Crosthwaite, former chief growth officer at tobacco giant Altria, Juul said.

Juul is 35%-owned by Altria, and in the past has been accused of targeting vaping devices at children.

Mr Burns said: "Since joining Juul Labs, I have worked non-stop, helping turn a small firm into a worldwide business, so a few weeks ago I decided that now was the right time for me to step down."

At the same time, Altria said its merger talks with fellow cigarette-maker Phillip Morris would not move forward.

'Future at risk'

The changes come as Juul faces serious threats to its once explosive growth.

The Trump administration this month said it was preparing a nationwide ban on flavoured e-cigarettes. Juul is also facing multiple investigations, including into its marketing practices.

Walmart ceases e-cigarette sales

Juul 'ignored law' in US e-cigarette adverts

'Half as many Britons' vape as smoke

Juul has for years promoted its e-cigarettes, which contain addictive nicotine, as a safer alternative to traditional tobacco products.

However, the Food and Drug Administration recently warned Juul against making health claims without presenting scientific evidence to authorities for approval.

Juul said it would not lobby against the proposed ban on flavoured e-cigarettes.

However, Mr Crosthwaite said he remains committed to making Juul's products available to adult smokers.

"Unfortunately, today that future is at risk due to unacceptable levels of youth usage and eroding public confidence in our industry," he said.

Injuries

The crackdown on Juul, which dominates the US e-cigarette market, follows a spate of serious lung injuries in the US linked to vaping.

Health authorities have not blamed the outbreak, in which nine people have died and more than 530 people been taken ill, on any one product.

Most of the patients had a history of using vaping products that contain THC, the chemical in marijuana, they said.

However, the injuries have raised alarm, especially in conjunction with surging rates of teen vaping.

Two US states, New York and Michigan, have already imposed bans on flavoured e-cigarettes, while Massachusetts has announced a four-month ban on all vaping products.

Walmart last week announced it would stop e-cigarette sales, citing the regulatory uncertainty.--BBC

Thomas Cook collapse: German company files for bankruptcy

Thomas Cook's German subsidiary has announced it is filing for insolvency in an attempt to save its national brands after the collapse of the UK parent company on Monday.

Almost 100,000 holidaymakers are travelling with the German affiliates and it is not clear what the bankruptcy proceedings will mean for them.

The German government has already granted a €380m (£335m; $420m) bridging loan to the holiday airline Condor.

Condor is 49% owned by Thomas Cook.

The central state of Hesse, where Condor is based, also stepped in to rescue the airline, arguing that it was profitable.

The company said it was "operationally healthy" and the six-month loan was aimed at preventing any "bottlenecks" resulting from its British parent company. The funding will be paid out pending an agreement with the European Commission.

Thomas Cook Germany is also based in Hesse and state premier Volker Bouffier said it was in principle willing to step in to help that company too.

It said that it had long been burdened by the weak Thomas Cook business in Great Britain and by Brexit.

How are European tourists affected?

A total of 600,00 holidaymakers have been caught up in the collapse of the UK company. Many have travelled from the UK but Thomas Cook's empire stretches across Europe and tens of thousands have travelled with its subsidiaries.

Under EU package holiday rules, holidaymakers are protected financially from a company's insolvency as well as having the right to repatriation.

The UK's Civil Aviation Authority has had the task of bringing back more than 150,000 holidaymakers. It repatriated more than 14,000 passengers on Tuesday and was expecting to bring back another 16,500 on Wednesday.

Thousands of Dutch, Belgian and Polish tourists are still abroad, but the biggest group affected outside the UK is from Germany. A spokeswoman said on Wednesday that 97,000 people were currently travelling with the company.

Thomas Cook Germany employs some 2,000 people and has several national brands, including Neckermann, Öger Tours, Air Marin and Bucher Reisen. A thousand people are employed by the company near Frankfurt.

It said it was talking to the German foreign ministry as well as the travel bankruptcy insurer, Zurich, about repatriating customers. Like Condor, it has asked the Hesse state government and the federal government for a bridging loan.

Why has Germany's Thomas Cook filed for bankruptcy?

The German subsidiary believes its brands have a future and is in negotiations with investors and hotel operators to continue in business.

Thomas Cook GmbH said it had been forced to seek insolvency to extricate itself from its (UK) parent company's "financial tie-ups and related liabilities".

"We owe this to our long-standing customers, committed employees and other partners who have supported us so much over the years and in the last difficult weeks," said chief executive Stefanie Berk.

Thomas Cook businesses in several other European countries are also trying to survive:

*         Polish subsidiary, Neckermann Polska, has suspended its activities and said it will file for bankruptcy

*         Thomas Cook Netherlands, which has 10,000 holidaymakers abroad, said on Wednesday it had been granted a delay on payments while action was taken to secure its future

*         Thomas Cook France has more than 9,600 customers abroad and will go to court on Thursday in an attempt to go into receivership and find a buyer

*         Thomas Cook Austria has filed for bankruptcy and has almost 5,000 customers abroad.

*         Founded in 1841, parent company Thomas Cook filed for bankruptcy after failing to secure emergency funding of £200m from the UK government.

In the UK, anyone who has bought a package holiday covered by the Air Travel Organiser's Licence scheme (Atol) will have the cost refunded.

However, some customers whose future holidays have been cancelled have seen the price of replacement deals spiral.

There is also concern that local businesses will be badly affected in countries where Thomas Cook operates:

The Balearic Islands in Spain is set to lose millions of euros. Thomas Cook has a tax office in Palma with hundreds of employees and works with a number of local hotels

In Cyprus, hoteliers and the wider economy could lose €50m, according to Cyprus's deputy tourism minister

The Gambia is bracing itself for a big impact on tourism, which contributes to more than 30% of its economic output

Turkey's hotel federation says many small businesses depend on Thomas Cook.--BBC

How did oil become so important?

It was 27 August 1859, and a crucial message had been sent. Entrepreneur Edwin Drake's last financial backer had finally lost patience. Pay off your debts, give up and come home, the message read.

Drake had been hoping to find "rock oil", a brownish unrefined "crude" oil that sometimes bubbled near the surface of western Pennsylvania. He planned to refine it into kerosene, for lamps - a substitute for increasingly expensive whale oil.

There would also be less useful by-products, such as gasoline, but if he couldn't find a buyer for that he could always pour it away.

The message had been sent, but Drake had not yet received it when his drill bit punctured an underground reservoir full of crude oil under pressure. From 69 ft (21m) beneath the surface, the oil began to rise.

The whales had been saved, and the world was about to change.

Just a few miles south and a few years later, came a hint of what lay in store.

When oil was struck at Pithole, Pennsylvania, in 1864, "there were not 50 inhabitants within half a dozen miles", according to the New York Times.

A year later, Pithole had at least 10,000 inhabitants, 50 hotels, one of the country's busiest post offices, two telegraph stations and dozens of brothels.

A few men made fortunes, but a real economy is complex and self-sustaining. Pithole was neither, and within another year, it was gone.

Its oil boom did not last, but our thirst for the fuel grew and grew. The modern economy is drenched in oil.

50 Things That Made the Modern Economy highlights the inventions, ideas and innovations that helped create the economic world.

It is broadcast on the BBC World Service. You can find more information about the programme's sources and listen to all the episodes online or subscribe to the programme podcast.

It's the source of more than a third of the world's energy.

That's more than coal, and more than twice as much as nuclear, hydroelectric and renewable energy sources combined.

Oil and gas together provide a quarter of our electricity, and the raw material for most plastics.

Then there's transport.

Edwin Drake may have questioned who would buy gasoline, but the internal combustion engine was about to give him an answer. From cars to trucks, cargo ships to jet planes, oil-derived fuel still moves us - and stuff - around.

No wonder the price of oil is arguably the most important single price in the world.

In 1973, when some Arab states declared an embargo on sales to several rich nations, prices surged from $3 to $12 a barrel in just six months.

It led to a global slowdown, with US recessions following subsequent price spikes in 1978, 1990, and 2001. Some economists even believe that record high oil prices played an important role in the global recession of 2008, which is conventionally blamed on the banking crisis alone.

As oil goes, so goes the economy.

So why did we become so excruciatingly dependent on the stuff?

Daniel Yergin's magisterial history of oil, The Prize, begins with a dilemma for Winston Churchill.

Churchill was made head of the Royal Navy in 1911.

One of his first decisions was whether the British Empire would meet the challenge of an expansionist Germany with new battleships powered by safe, secure Welsh coal, or by oil from faraway Persia - modern-day Iran.

Why would anyone rely on such an insecure source? Because oil-fired battleships would accelerate more quickly and sustain a higher speed, required fewer men to deal with the fuel and would have more capacity for guns and ammunition.

Oil was simply a better fuel than coal.

Churchill's "fateful plunge" in April 1912 reflected the same logic that has governed our dependence on oil - and shaped global politics - ever since.

After Churchill's decision, the British Treasury bought a majority stake in the Anglo-Persian oil company - the ancestor of BP.

In 1951, it was nationalised by the government of Iran. Our company, protested the British. Our oil, responded the Iranians. The argument would be repeated around the world over the subsequent decades.

Some countries did well. Saudi Arabia is one of the richest on the planet, thanks to its large oil reserves.

Its state-owned oil company, Saudi Aramco, is worth more than Apple or Google or Amazon.

Oil price falls as Saudi Arabia calms supply fears

Elsewhere, from Iraq to Iran, Venezuela to Nigeria, few oil-rich countries have prospered from the discovery. Economists call it the "curse of oil".

Juan Pablo Pérez Alfonzo, Venezuela's oil minister in the early 1960s, had a more vivid description. "It is the devil's excrement," he declared in 1975. "We are drowning in the devil's excrement."

More things that made the modern economy:

How Diesel’s engine changed the world

What can bees teach economists about how markets work?

How the humble brick built the world

Can a computer fool you into thinking it is human?

Why is it a problem to have lots of oil?

Exporting it pushes up the value of your currency - which can make everything other than oil prohibitively expensive to produce at home.

That means it can be hard to develop manufacturing or complex service industries.

Historically, many politicians have tried to monopolise their country's oil for themselves and their allies. Dictatorships are not uncommon. There is money - for some - but such economies tend to be thin and brittle.

That's one reason we might hope for something to replace oil. Climate change, obviously, is another.

But oil has so far stubbornly resisted giving way to batteries. This is because machines that move around need to carry their own source of power with them - the lighter the better.

A kilogram of petrol stores as much energy as 60kg of batteries, and has the convenient property of disappearing after use. Empty batteries, alas, are just as heavy as full ones.

Electric cars are finally starting to break through. Electric jumbo jets are a tougher challenge.

Battery bonanza: From frogs' legs to mobiles and electric cars

The road to clean energy

There was a time when it seemed as though oil might simply start to run out - "peak oil" was the phrase - pushing prices ever higher, and giving us the impetus to move to a clean, renewable economy.

In fact, oil is being discovered far more quickly than it is being consumed.

This is partly thanks to the rapid growth of hydraulic fracturing, or "fracking", a controversial process in which water, sand and chemicals are pumped underground under high pressure to release oil and gas.

Fracking is more like manufacturing than traditional exploration and production.

It's standardised, enjoying rapid productivity gains and the process starts and stops depending on whether the price is right.

Many critics have expressed fears about its potential long-term environmental consequences.

However, the Permian Basin - home of the US fracking industry - already produces more oil than the 14 members of the Organization of Petroleum Exporting Countries (Opec) group, apart from Saudi Arabia and Iraq.

It seems we are still drowning in the Devil's Excrement, and may continue to do so for some time.--BBC

INVESTORS DIARY 2019

Company

Event

Venue

Date & Time

Companies under Cautionary

Bindura Nickel Corporation

Padenga Holdings

Delta Corporation

Meikles Limited

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