Major International Business Headlines Brief::: 27 September 2019

[Bulls n' Bears]

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Major International Business Headlines Brief::: 27 September 2019

 


 

 


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

 


 

 


 

 

*  Ethiopia appoints Ethio Telecom privatisation adviser

*  South Africa's Capitec profit jumps 20%, meets expectations

*  Lucara finds blue diamond in Botswana mine

*  Kenya parliament rejects finance ministry request to scrap commercial lending rate caps

*  Egyptian share losses an 'unjustified reaction' -bourse head

*  South African rand weaker after overnight U.S. dollar surge

*  Kenyan budget carrier Jambojet to double passengers in three years

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

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

*  Saudi Arabia to open up to foreign tourists with new visas

*  Thomas Cook: 40% of holidaymakers back in UK

*  Facebook tests hiding likes from Australian users

*  Boeing 'misjudged 737 Max pilot reactions'

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

Ethiopia appoints Ethio Telecom privatisation adviser

ADDIS ABABA (Reuters) - Ethiopia has appointed a transaction adviser in the privatisation process for state-run Ethio Telecom, and another adviser will be selected in coming weeks to oversee licensing in the telecoms sector, a senior finance ministry official said.

 

State Minister of Finance Eyob Tekalign Tolina said that Ethio Telecom had appointed international consulting firm KPMG to help with a process aimed at selling off stakes in the telecom.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

South Africa's Capitec profit jumps 20%, meets expectations

JOHANNESBURG (Reuters) - South African lender Capitec Bank on Thursday reported profit for the first half of the year grew 20%, in line with expectations, thanks to strong customer growth and a smaller impairment charge.

 

The performance outshone more muted growth at many rivals, who have struggled after the economy suffered its worst contraction in a decade and the unemployment rate hit an 11-year high after years of already stagnant growth.

 

“We’re fortunate to be growing, continuously hiring employees and not retrenching,” Capitec CEO Gerrie Fourie said in a statement.

 

Many South African lenders registered flat or minimal growth in their domestic retail banks, and large traditional lenders have been shuttering branches and cutting jobs in a bid to modernise their operations and bring costs down to compete with a host of new, digital-only rivals.

 

Headline earnings per share - the main profit measure in South Africa - stood at 2,545 cents for the period ending Aug.31, compared with 2,128 cents a year earlier. Stripping out non-operational factors, income from operations rose 7%.

 

Its shares were up 0.49% at 0728 GMT, with the strong results largely expected by the market after the lender previously said half-year earnings could rise by up to 21%.

 

“The result was more or less guided for... so that wasn’t a surprise,” Harry Botha, banking analyst at Avior Capital Markets, said, adding Capitec’s growth was more muted if a 17% decline in the bank’s credit impairment charge was excluded.

 

In the past two years, the bank has been reducing its exposure to the lowest-income consumers and tightening its credit policies, as well as trying to diversify away from a reliance on risky unsecured lending.

 

The reliance on risky lending and focus on the lower-income market leaves Capitec more exposed than peers to any increase in bad debts, and analysts had been concerned over a potential rise in troubled loans during the period.

 

But while the bank’s gross loan book grew by 17% to 60.25 billion rand ($4.02 billion), its total arrears of up to three months had decreased by 11% by the end of Aug 2019 - one of its best performances on arrears to date, Fourie said.

 

($1 = 14.9799 rand)

 

 

 

Lucara finds blue diamond in Botswana mine

(Reuters) - Canadian miner Lucara Diamond Corp said on Thursday it recovered a 9.74 carat blue gem diamond from its Karowe mine in Botswana, the latest in a series of high-value finds.

 

Lucara’s find comes just three days after London-listed Petra Diamonds Ltd said it recovered an extremely rare 20.08 carat blue diamond from its flagship Cullinan mine in South Africa, the world’s main source of blue diamonds.

 

Blue diamonds comprise only about 0.02% of mined diamonds and are highly sought after for their color and rarity.

 

Lucara earlier this year unearthed the largest uncut diamond - 1,758-carat and weighing close to 352 grams - in recent history from the Botswana mine.

 

The company also said on Thursday it had found a 4.13 carat pink gem diamond.

 

 

 

Kenya parliament rejects finance ministry request to scrap commercial lending rate caps

NAIROBI (Reuters) - Kenya’s parliament rejected on Wednesday the Finance Ministry’s request to scrap commercial lending rate caps, a lawmaker who was present during a vote on the 2019/20 (July-June) fiscal budget said.

 

“The caps are going to remain,” Jude Njomo, who first pushed for changes in the banking laws in 2016 to introduce the caps, told Reuters by phone.

 

 

 

Egyptian share losses an 'unjustified reaction' -bourse head

CAIRO/LONDON (Reuters) - Recent losses in Egyptian shares are unjustified, the bourse’s chairman Mohamed Farid said on Thursday, after protests against President Abdel Fattah al-Sisi caused shares to plunge on the Cairo bourse early in the week.

 

Anti-government protests broke out last weekend, and a call for new demonstrations on Friday has further rattled foreign investors.

 

On Thursday, the benchmark index rebounded for a second day, gaining 1.7 percent as of 1100 GMT. But the blue-chip index is still down 6 percent for the last week, Refinitiv data showed.

 

“It’s an unjustified reaction and not significant compared to (other) stock markets,” Farid told MBC Masr TV.

 

Investors are waiting to see whether protesters will defy a ban and how security forces will respond.

 

Protests have become rare since Sisi, who took power after removing President Mohamed Mursi in 2013 following mass demonstrations against the Islamist leader.

 

“The question is: if you are getting a large turnout of demonstrators and there is a big crack-down how is that going to go down? I don’t think it will go down well,” said Kevin Daly at Aberdeen Standard.

 

“We are all waiting to see what is going to happen after prayers on Friday, and will it run into the weekend,” he said.

 

Finance ministry officials met investors in London this week on a trip which had been scheduled before, according to an official and fund managers.

 

“Investors are focused on the intensity and perseverance of the such protests. Those factors will determine whether investors are concerned,” said another UK-based fund manager.

 

“But the protests are much smaller than 2011. Knowing how brutal the regime is average people will not protest unless there’s a clear agenda and there doesn’t seem to be a clear plan from the protesters,” he said.

 

The protests that overthrew President Hosni Mubarak in 2011 threw the economy into turmoil from which it has taken years to recover.

 

 

South African rand weaker after overnight U.S. dollar surge

JOHANNESBURG (Reuters) - South Africa’s rand weakened on Thursday, after the dollar surged overnight as investors nervous about an impeachment inquiry against U.S. President Donald Trump sought shelter in the greenback.

 

* The rand was down 0.2% at 15.03 versus the dollar, as of 0740 GMT.

 

* The dollar index steadied on Thursday, after rising around 0.7% a day earlier.

 

* The potential for a trade deal between the world’s two largest economies was on investors’ minds after Trump told reporters on Wednesday that the U.S. and China were having “good conversations” and that an agreement “could happen sooner than you think”. [nL2N26G0VJ]

 

* China is a major trading partner of South Africa, so any deal would be good for South Africa’s exports.

 

* Government bonds were little changed on Thursday, with the yield on the benchmark 2026 bond down 0.5 basis points to 8.34%.

 

* Local equities opened a touch stronger, with the Johannesburg Stock Exchange’s All-share index up 0.4%.

 

 

 

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.”

 

 

 

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)

 

 

 

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)

 

 

 

Saudi Arabia to open up to foreign tourists with new visas

Saudi Arabia will open its doors to international tourists for the first time as part of a broader push to cut its economic dependence on oil.

 

On Friday, the kingdom will launch a visa regime for 49 countries and relax strict dress codes for female visitors.

 

Tourism Minister Ahmad al-Khateeb described it as a "historic moment" for the country.

 

Visas have until now largely been restricted to pilgrims, business people and expatriate workers.

 

Saudi Arabia is also hoping to secure foreign investment in the tourism industry. It wants tourism to rise from 3% to 10% of gross domestic product by 2030.

 

"Visitors will be surprised... by the treasures we have to share - five Unesco World Heritage Sites, a vibrant local culture and breathtaking natural beauty," Mr al-Khateeb said.

 

Foreign women visitors will not be required to wear the body-covering abaya robe required to be worn in public by Saudi women, but must still maintain modest dress. There will also be no restrictions on unaccompanied women visiting the country.

 

 

"We have a culture. We believe our friends and our guests will respect the culture, but definitely it is modest and it will be very clear," Mr al-Khateeb said.

 

Non-Muslims will still not be allowed to visit the holy cities of Mecca and Medina and the ban on alcohol will be maintained.

 

More details on the scheme, including which countries are eligible, are due to be provided later on Friday.

 

But Mr al-Khateeb said he did not believe the recent attack on Saudi Arabia's oil industry would put people off visiting.

 

"Our cities are among the most safest cities globally. Therefore, we don't believe at all it will impact our plans. We have all the expats living in Saudi Arabia, enjoying Saudi Arabia. We're very secure," he said.

 

Tourism hopes

The moves to open up tourism is central to Crown Prince Mohammed bin Salman's wider economic reform programme that aims to reduce the kingdom's focus on oil.

 

Under the plan, Saudi Arabia wants to increase international and domestic visits to 100 million a year by 2030. The government expects to create one million tourism jobs.

 

Still, the push comes as the kingdom faces a tarnished international image amid criticism of its human rights record following last year's murder of journalist Jamal Khashoggi, and a recent crackdown on women's rights activists.

 

In 2017 Saudi Arabia announced a massive tourism development project that will turn 50 islands and other sites on the Red Sea into luxury resorts.

 

Last year construction began on Qiddiya "entertainment city" near Riyadh, which is to include high-end theme parks, motor sport facilities and a safari area.--BBC

 

 

 

Thomas Cook: 40% of holidaymakers back in UK

The Civil Aviation Authority (CAA) says it has now flown a total of 61,000 Thomas Cook customers back to the UK, taking the total to 40% of passengers.

 

On Thursday it used 69 flights to bring back 15,000 people as part of its repatriation scheme following the collapse of the holiday group.

 

Some 72 flights are due to operate on Friday to return 16,000 people.

 

The CAA says Operation Matterhorn will continue until 6 October with more than 1,000 flights planned in total.

 

The authority said 95% of passengers have been flown home on the planned day of their departure.

 

"An operation of this scale and complexity will inevitably cause some inconvenience and disruption and I am very grateful to holidaymakers for bearing with us as we work around the clock to bring them home," said Richard Moriarty, chief executive of the CAA.

 

Separately, Thomas Cook staff are due to meet at Manchester Airport today. They plan to raise the topic of unpaid wages.

 

The latest data from the Insolvency Service shows that 6,000 Thomas Cook staff in the UK have been made redundant and just over 3,000 employees are currently retained.

 

What went wrong at Thomas Cook?

Thomas Cook: Your questions answered

Thomas Cook collapsed after it failed to find funding to continue paying its bills. Its appeal to the government for £250m was rebuffed.

 

Condor, Thomas Cook's German-based airline business, received a €380m (£336m) loan from the German government which will allow it to operate until a buyer is found.

 

There had been warning signals that all was not well at Thomas Cook.

 

In May, the company reported a £1.5bn loss for the first half of its financial year, with £1.1bn of the loss caused by the decision to revalue My Travel, the business it merged with in 2007.

 

Thomas Cook also came close to collapse in 2011. Trading was weak and, just as now, it had too much debt. The firm owed about £2bn when the pension deficit was included. Its rescue plan involved a £425m fundraising from shareholders to help it cut borrowings.

 

However, all that rescue money was used up, taking its debts back to about £1.7bn by the time the company collapsed.--BBC

 

 

 

Facebook tests hiding likes from Australian users

Facebook will follow Instagram by hiding the number of likes on users' posts during a trial in Australia.

 

>From Friday, some Australian users will no longer be able to see the number of likes - or reactions - on another person's Facebook post.

 

The controversial change has been trialled by sister platform Instagram in several countries since July.

 

Facebook said removing likes from view was an attempt to reduce social pressure among users.

 

People will still be able to see the number of likes on their own posts, the company said.

 

"[It is about] taking that number out of the equation, so that people can focus on the quality of their interactions and the quality of the content rather than on the number of likes or reactions," spokeswoman Mia Garlick told the Australian Associated Press.

 

Ms Garlick said the company had consulted mental health experts and anti-bullying groups over the change. It had also been forecast by tech experts.

 

Earlier this month, a Hong Kong engineer wrote in a blog that she had discovered prototype code in Facebook's Android app which suggested that it was testing the setting. Facebook declined to comment at the time.

 

Instagram has not made public any data from its trial in seven countries: Australia, New Zealand, Brazil, Canada, Japan, Italy and Ireland.

 

The change prompted backlash from some social media influencers who said that displaying likes was an important business metric for them.

 

The platforms have not said whether the trials will be extended or become permanent.--BBC

 

 

 

Boeing 'misjudged 737 Max pilot reactions'

Boeing needs to pay more heed to how pilots react to emergencies in its safety assessment of the 737 Max plane, US transport chiefs have said.

 

The 737 Max has been grounded since March following two fatal crashes.

 

The US Federal Aviation Administration (FAA) must decide if the plane is safe.

 

But according to the US National Transportation Safety Board (NTSB), the crews in the fatal crashes "did not react in the ways Boeing and the FAA assumed they would".

 

The 737 Max plane has not flown commercially since an Ethiopian Airlines aircraft crashed shortly after take-off on 10 March, killing 157.

 

It followed a Lion Air crash on 28 October last year which killed 189.

 

In both incidents, investigators have focused on the role played by a software system called MCAS (Manoeuvring Characteristics Augmentation System), which was designed to make the aircraft easier to fly.

 

Inquiries have shown the software - and the failure of sensors - contributed to pilots not being able to control the aircraft.

 

Boeing has said it is revising the plane's software to improve safeguards.

 

But the director of the NTSB's Office of Aviation Safety, Dana Schulze, said Boeing "did not look at all potential flight deck alerts and indications that pilots might face when this specific failure condition occurred in Lion Air and Ethiopian Airlines".

 

Earlier this month, Europe's aviation safety watchdog, the European Aviation Safety Agency (Easa), said it would not accept a US verdict on whether the 737 Max was safe.

 

Instead, it will run its own tests on the plane before approving a return to commercial flights.--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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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.

 


 

 


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