Major International Business Headlines Brief::: 01 April 2020

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Major International Business Headlines Brief::: 01 April 2020

 


 

 


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ü  South Africa announces tax relief for business hit by coronavirus

ü  Nigeria imposes offshore oil worker restrictions in coronavirus battle

ü  Egypt's banks told to limit withdrawals and deposits

ü  Angola to cut budget as fifth year of recession looms large

ü  Moody's downgrade to 'junk' adds to South Africa pain

ü  South African fuel prices to drop sharply in April

ü  Namibia suspends mining operations as coronavirus lockdown takes effect

ü  World Bank, IMF urge debt relief for poorer countries hit by coronavirus

ü  Algeria's annual inflation slips in February

ü  South Africa may approach the IMF for "health funding" -Mboweni

ü  Zoom under increased scrutiny as popularity soars

ü  Banks bow to pressure and axe shareholder payments

ü  A fifth of smaller UK firms 'will run out of cash'

ü  Big splash: The world's largest designer of water parks

 

 


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South Africa announces tax relief for business hit by coronavirus

JOHANNESBURG (Reuters) - South Africa’s National Treasury said on Sunday it
was introducing a new tax subsidy of 500 rand ($28) per month for each
worker to employers for the next four months to cushion financial losses
suffered by firms due to the coronavirus.

 

In a statement, the treasury said it would also permit businesses with
revenue of 50 million rand or less to delay paying 20% of their employees’
tax liabilities over the next four months.

 

“The tax adjustments are made in light of the National State of Disaster and
due to the significant and potentially lasting negative impacts on the
economy from the spreading of the COVID-19 virus,” the treasury said in a
statement.

 

South Africa entered a 21-day lockdown on Friday with people restricted to
their homes and most businesses shuttered. The country has reported over
1,180 cases of coronavirus and now faces a near certain deep recession.

 

The announcement also follows Friday’s decision by Moody’s to cut the
country’s debt to subinvestment, meaning all three of the top ratings firms
now rank the country at junk.

 

Earlier, Finance Minister Tito Mboweni told the Sunday Times newspaper South
Africa would consider approaching the International Monetary Fund and World
Bank for funding to fight the coronavirus.

 

($1 = 17.6250 rand)

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

Nigeria imposes offshore oil worker restrictions in coronavirus battle

YENAGOA, Nigeria (Reuters) - Nigeria’s petroleum regulator has ordered oil
and gas companies to reduce their offshore workforce and move to 28-day
staff rotations as part of measures to curb the spread of the coronavirus,
according to a circular seen by Reuters.

 

Health experts fear a widespread outbreak in Africa’s most populous country,
which has about 200 million inhabitants, and the country is keen to protect
oil production, which provides 90% of much-needed foreign exchange.

 

A coronavirus case on an offshore rig could spread quickly among workers and
have a potentially devastating impact on production.

 

Sarki Auwalu, director of the Department of Petroleum Resources, said that
only staff on essential duties would be allowed to travel to offshore or
remote locations.

 

“Non-essential staff currently at offshore/remote locations should be
withdrawn with immediate effect,” he said in a statement.

 

Nigeria, which has 97 confirmed coronavirus cases, has shut international
airports, closed all land borders and imposed curbs on cargo vessels allowed
to dock at its ports in an effort to contain the outbreak.

 

Rivers State, in which Port Harcourt serves as the hub of Nigeria’s oil
industry, closed its own borders to human traffic this week.

 

Oil and gas companies operating in Nigeria have previously said that the
health and safety of workers was their top priority.

 

Industry sources said that a number of oil companies had already shifted
from 14-day rotations to 28 days. Some are also implementing a 14-day
quarantine for workers before they leave for rigs.

 

Oil prices have fallen by two thirds since the start of the year, which has
forced Nigeria to cut its budget and prompted oil companies to reduce their
spending plans.

 

 

 

Egypt's banks told to limit withdrawals and deposits

CAIRO (Reuters) - Egyptian banks have been instructed to apply temporary
limits on daily withdrawals and deposits in a move seemingly designed to
control inflation and hoarding as concern grows over the spread of the
coronavirus.

 

The daily limit for individuals would be 10,000 Egyptian pounds ($635) and
50,000 pounds for companies, a central bank statement said, though
businesses will be exempt from the withdrawal limits if the money is used to
pay employees.

 

The central bank has also limited daily ATM withdrawals and deposits to
5,000 pounds, it said in a statement.

 

“Not official, but I heard (it was designed) to control hoarding and
inflation,” said one analyst who asked not to be named.

 

“This could reduce hoarding and panic buying and contain prices,” a second
analyst said.

 

The central bank has also urged people to limit their use of banknotes and
to rely on electronic transfers and e-payments.

 

“All banks cancelled fees on transfers and e-payment methods for the
citizens’ convenience,” the statement added.

 

Egypt reported 40 new coronavirus cases and six fatalities on Saturday,
bringing the totals to 576 confirmed infections and 36 deaths.

 

Egypt ordered mosques to shut their doors to worshippers for two weeks from
March 21.

 

The Ministry of Islamic Endowments said on Sunday that it would extend the
closure indefinitely.

 

($1 = 15.7500 Egyptian pounds)

 

 

 

Angola to cut budget as fifth year of recession looms large

LAGOS (Reuters) - Angola’s finance minister said the country’s economy will
contract by 1.21% in 2020, marking a fifth year of recession, as the
coronavirus and a slump in oil prices batter its finances.

 

Finance Minister Vera Daves de Sousa said Africa’s third-largest economy is
freezing 30% of its “goods and services” budget and recalibrating spending
plans based on a maximum oil price of $35 a barrel - $20 lower than
previously envisaged.

 

    She said the “deterioration of the surrounding economic environment” was
having a significant impact on the oil-producing nation.

 

Crude oil prices - slammed by a coronavirus-related drop in demand and a
battle for market share between Saudi Arabia and Russia - have fallen
precipitously, with Brent crude settling a little below $25 a barrel on
Friday. [O/R]   

 

Angola’s capital expenditure has been suspended until the budget review is
complete, according to a statement issued after a Council of Ministers
meeting on Friday, and Daves de Sousa warned that the country will
experience an increase in exchange rate depreciation and higher than
expected inflation.

 

    She added that the budget freeze would exclude food, medicine, cleaning
and sanitation expenditure. She also said that the planned end to
subsisidised fuel would be postponed and that humanitarian aid and donated
imports would be exempt from value added tax and customs duty.

 

    “We will do everything so that this pandemic reaches the smallest number
of Angolans,” she said.

 

The Angolan sovereign wealth fund, meanwhile, will release a total of $1.5
billion, Daves de Sousa said, on condition of future repayment through
increased tax on the Bank of Angola’s rolling debts.

 

    Daves de Sousa said that oil production, which provides the bulk of
government funds, is expected to fall to 1.36 million barrels per day (bpd)
and that the average carat price for diamonds, another key Angolan resource,
had dropped to $100.30 from $162.

 

    Angola has been mired in recession since 2016, with oil production
dropping at its ageing offshore fields.

 

The government is in the midst of a number of sweeping reforms aimed at
diversifying the economy away from oil, streamlining oil regulations to
attract investment and reduce bloated state spending.   

 

 

 

Moody's downgrade to 'junk' adds to South Africa pain

JOHANNESBURG (Reuters) - Moody’s downgraded South Africa’s sovereign credit
rating to “junk” status on Friday, heaping more pain on an economy already
in recession and now staring down the barrel of a steep contraction over the
global coronavirus pandemic.

 

The ratings firm downgraded the rating one notch to ‘Ba1’ from ‘Baa3’ and
maintained a negative outlook, meaning another downgrade could follow if the
economy performs worse or government debt rises faster than expected.

 

South Africa’s finance ministry said the downgrade would add to prevailing
financial market stress.

 

Moody’s said the main driver behind the downgrade was “the continuing
deterioration in fiscal strength and structurally very weak growth”.

 

“The rapid spread of the coronavirus outbreak will exacerbate South Africa’s
economic and fiscal challenges and will complicate the emergence of
effective policy responses,” it added.

 

Finance Minister Tito Mboweni said the government was not “trembling in our
boots” and was committed to reforms to address weak growth and ailing
state-owned companies.

 

The majority of analysts polled by Reuters this week had predicted the
downgrade.

 

The agency is the last of the big three agencies to downgrade Africa’s most
industrialised economy to sub-investment grade, after S&P Global and Fitch
moved there in 2017.

 

Moody’s left South Africa on the brink of junk in November after it revised
the outlook on its rating to negative following a bleak mid-term budget.

 

An annual budget in February showed a worsening of the fiscal picture, and
the country started a 21-day nationwide lockdown on Friday that will dent
output as workers have been told to stay at home to prevent the spread of
the coronavirus.

 

Having a lower credit rating typically increases a government’s cost of
borrowing by raising the premium that investors demand to hold its debt.

 

The latest downgrade will see South Africa kicked out of the benchmark World
Government Bond Index (WGBI) of local-currency debt, triggering up to $11
billion of forced selling, analysts estimate.

 

However, one factor that could make the reaction more muted when markets
open on Monday is that a rebalancing of the WGBI has been postponed until
the end of April, potentially delaying some selling by funds tracking the
index.

 

Another factor that could stem losses is that South African assets have sold
off heavily this year.

 

The rand is down around 20% against the U.S. dollar, and yields on the 2030
government bond are up well over 2 percentage points since the end of 2019.

 

Some analysts have argued that the downgrade to junk could prompt buying by
removing a pillar of uncertainty that has clouded the outlook for local
assets for some time.

 

But Kevin Lings, chief economist at asset manager Stanlib, said that
prospect was remote for now. “I’m not convinced that because you have
eliminated this uncertainty foreigners will come in,” he said.

 

“Our market is now more beholden to the virus than the credit rating.”

 

 

 

South African fuel prices to drop sharply in April

JOHANNESBURG (Reuters) - The retail price of petrol in South Africa will
fall by as much as 12% from April 1, while the price of wholesale diesel
will fall by around 9.5%, the energy department said on Saturday.

 

The price of petrol will decrease by 188 cents to 13.96 rand ($0.8) per
litre in the commercial hub of Gauteng province, while diesel will fall by
133 cents to 12.69 rand per litre.

 

($1 = 17.6250 rand)

 

 

Namibia suspends mining operations as coronavirus lockdown takes effect

WINDHOEK (Reuters) - Namibia on Saturday ordered mining companies to cease
operations for three weeks as the country entered its first day of a partial
lockdown, and stepped up measures to curb coronavirus infections which
currently stand at eight people.

 

Mines and Energy Minister Tom Alweendo said in a statement mining activities
should be discontinued during the lockdown, which lasts until April 16.

 

The sector generates around 50% of the small southern African nation’s
export revenue, contributing 9.3% to gross domestic product (GDP) in 2019,
and is key to reversing the recent recession driven by a sharp decline in
primary production.

 

Namibia, with a population just under three million, has yet to record any
coronavirus deaths, but has acted quickly to curb its spread, this week
banning travel from all countries, restricting social movement, and ordering
most people to work from home.

 

 

 

World Bank, IMF urge debt relief for poorer countries hit by coronavirus

WASHINGTON (Reuters) - The heads of the World Bank and International
Monetary Fund on Friday underscored the need to provide debt relief to
poorer countries hit by the coronavirus pandemic, and said official
bilateral creditors would have to play a major role.

 

The IMF and the World Bank have both launched emergency programs to offer
grants and loans to member countries, with a heavy focus on developing
countries and emerging markets, some of which are already in debt distress.
They have also called on official bilateral creditors to provide immediate
debt relief to the world’s poorest countries.

 

“Poorer countries will take the hardest hit, especially ones that were
already heavily indebted before the crisis,” the World Bank’s president,
David Malpass, told the International Monetary and Financial Committee, the
steering committee of the IMF.

 

“Many countries will need debt relief. This is the only way they can
concentrate any new resources on fighting the pandemic and its economic and
social consequences,” he said, according to a text of his remarks.

 

Malpass said the bank had emergency operations under way in 60 countries,
and its board was considering the first 25 projects valued at nearly $2
billion under a $14 billion fast-track facility to help fund immediate
health-care needs.

 

The World Bank was also working with 35 countries to redirect existing
resources to the pandemic, with almost $1 billion of those projects already
approved. Overall, the bank plans to spend $160 billion over the next 15
month, he said.

 

Malpass said the IMF and World Bank would present a joint plan for debt
relief at the institution’s virtual Spring Meetings in April, but gave no
details.

 

The poorest countries face official bilateral debt service payments of $14
billion in 2020, including interest and amortization payments, Malpass said,
of which less than $4 billion was owed to the United States and other Paris
Club members. China, a major creditor, is not a Paris Club member.

 

Given the large share of debt held by official bilateral creditors, Malpass
said it was critical to ensure their “broad and equitable participation” in
addressing the crisis.

 

The IMF’s managing director, Kristalina Georgieva, warned that half of the
low-income countries were already in “high debt distress” and much would
depend on the official creditors.

 

She said there were already discussions among the world’s 20 largest
economies, the Group of 20, and in the Paris Club, but there would also be a
role for private creditors, as was the case during the global financial
crisis of 2008-2009.

 

“The sooner we do it, the better,” she said. “The same way the fund during
the global financial crisis brought together both official creditors and
private creditors to assess a good pathway through a dramatic crisis, we
have to do it this time around as well.”

 

 

 

Algeria's annual inflation slips in February

ALGIERS (Reuters) - Algeria’s annual inflation fell to 1.8% in February from
1.9% in January due to lower prices for some foodstuffs, official data
showed on Saturday.

 

On a monthly basis, the consumer price index dropped by 0.6% in February,
the National Statistics Bureau said.

 

Prices for meat and poultry fell 3.6% while the cost of manufactured
products fell 1%, the data showed.

 

Algeria has imposed import restrictions on some goods, mainly foodstuffs, in
a bid to reduce spending after a fall in energy export earnings.

 

 

 

South Africa may approach the IMF for "health funding" -Mboweni

JOHANNESBURG (Reuters) - South Africa may approach the International
Monetary Fund and World Bank for funding to fight the coronavirus that
threatens to drag the country’s economy deeper into recession, Finance
Minister Tito Mboweni said in the Sunday Times newspaper.

 

“This morning in a conversation with the (central) Reserve Bank and the
Treasury I indicated that we should proceed and speak to the IMF and the
World Bank about any facility that we can access for health purposes,”
Mboweni said in an interview with the weekly newspaper.

 

South Africa entered a 21-day lockdown on Friday, with people restricted to
their homes and most businesses shuttered. The country has reported 1,187
cases of coronavirus and now almost certainly faces a deep recession.

 

On Friday, the country lost its last investment-grade credit rating when
Moody’s downgraded South Africa to junk, citing persistently weak growth,
fast-rising debt and the impact of an unreliable electricity supply.

 

“We take no ideological position in approaching the IMF and World Bank. They
are creating facilities for this environment and SA should also take
advantage of those facilities in order to relieve pressure on the fiscus,”
Mboweni said in the interview.

 

 

 

Zoom under increased scrutiny as popularity soars

The videoconferencing app Zoom has come under fresh high-level scrutiny as
its popularity soars during the coronavirus pandemic.

 

New York's attorney general has written to the firm raising concerns over
its ability to cope with the rise in users.

 

Zoom is now being used by millions of people for work and leisure, as
lockdowns are imposed in many countries.

 

But its data security and privacy measures have been questioned.

 

The letter from the office of New York Attorney General Letitia James asked
Zoom whether it had reviewed its security measures since its popularity
surged. It also pointed out that in the past the app had been slow to
address issues.

 

In response to a request from the BBC for comment, a company spokesperson
said: "Zoom takes its users' privacy, security, and trust extremely
seriously.

 

"During the Covid-19 pandemic, we are working around-the-clock to ensure
that hospitals, universities, schools, and other businesses across the world
can stay connected and operational. We appreciate the New York Attorney
General's engagement on these issues and are happy to provide her with the
requested information," it added.

 

Zoom is in everyone's living room - how safe is it?

Racist 'zoombombing' during synagogue meeting

Laid off over Zoom: Firms cut staff by conference call

Users have flocked to Zoom as governments around the world ordered large
parts of their populations to stay at home to slow the spread of the virus.
It is now ranked as the number two and number one app in the UK and US,
respectively.

 

Zoom has had security flaws in the past, including a vulnerability which
allowed an attacker to remove attendees from meetings, spoof messages from
users and hijack shared screens. Another saw Mac users forced into calls
without their knowledge.

 

It also doesn't offer end-to-end encryption, according to online news
publication The Intercept. This is encryption that should mean no-one other
than participants can see a meeting.

 

Zoom told it: "Currently, it is not possible to enable E2E encryption for
Zoom video meetings." This means Zoom can access the video and audio of
meetings, it reported.

 

Because Zoom uses email domains to identify users who may be in the same
company, the service will sometimes allow small internet service providers'
customers to see each others' private data, reported Vice's tech website
Motherboard.

 

The company told Motherboard that it regularly updates a list of private
email providers to avoid this.

 

Zoom has also been criticised for its "attendee tracking" feature, which,
when enabled, lets the host of the Zoom call check if participants are
clicking away from the main Zoom window during a call.

 

More recently, the UK Prime Minister Boris Johnson last week tweeted a
picture of himself chairing a Cabinet meeting using Zoom, leading to
questions about how secure it was.

 

The company has pushed back at those concerns, telling the BBC: "Globally,
2,000 institutions ranging from the world's largest financial services
companies to leading telecommunications providers, government agencies,
universities, healthcare and telemedicine practices have done exhaustive
security reviews of our user, network and data centre layers confidently
selecting Zoom for complete deployment."

 

"We are in close communication with the UK Ministry of Defence and National
Cyber Security Centre and are focused on providing the documentation they
need."--BBC

 

 

 

Stock markets suffer worst quarter since 1987

Stock markets around the world suffered historic losses in the first three
months of the year amid a massive sell-off tied to the coronavirus.

 

The Dow Jones Industrial Average and London's FTSE 100 saw their biggest
quarterly drops since 1987, plunging 23% and 25% respectively.

 

The S&P 500 lost 20% during the quarter, its worst since 2008.

 

The drops come as authorities order a halt to most activity in an effort to
slow the spread of the virus.

 

Economists have warned the hit to the global economy is likely to be worse
than the financial crisis, with forecasters for IHS Markit, for example,
predicting growth will shrink 2.8% this year, compared to a 1.7% drop in
2009.

 

No country has been left untouched. The data firm expects China's growth to
sputter to 2%, while the UK could see growth drop 4.5%. The outlook for
countries such as Italy and less developed economies is even worse.

 

"We remain very concerned about the negative outlook for global growth in
2020 and in particular about the strain a downturn would have on emerging
markets and low income countries," the president of the International
Monetary Fund, Kristalina Georgieva, said on Tuesday.

 

In the US, one central bank analysis suggested the unemployment rate could
rise to more than 32% over the next three months, as more than 47 million
people lose their jobs.

 

Globally, many indexes remain more than 20% lower than they were at the
start of the year. A steep slide in oil prices, due to a drop in demand and
a price war between producers, has compounded the problems on financial
markets.

 

Governments have pledged massive rescue funds, which has helped to lift
share prices in recent days.

 

On Tuesday, the FTSE gained almost 2%, while Germany's Dax and France's CAC
40 saw more modest gains.

 

But the main US indexes stumbled, with the Dow dropping 1.8%, the S&P 500
down 1.6%, and the Nasdaq off almost 1%.

 

Energy and financial firms were among the worst performers in the quarter.
Retailers, which have seen sales evaporate as stores closed, suffered some
of the biggest losses on Tuesday, with Macy's down almost 9% a day after it
said it would put the majority of its staff on unpaid leave.

 

"Despite monetary and financial stimulus, we expect volatility of equities
to remain elevated as long as the duration and impact of Covid-19 remain
unknown, oil prices stay depressed and earnings visibility is murky,"
analysts for US Bank Wealth Management wrote.--BBC

 

 

 

Banks bow to pressure and axe shareholder payments

Some of the UK's biggest banks have agreed to scrap dividend payments and
hold onto the cash, which may be needed during the coronavirus crisis.

 

The Bank of England welcomed the decision to suspend the payments to
shareholders and urged the banks not to pay bonuses to senior staff either.

 

The banks, which include NatWest, Santander and Barclays, were due to pay
out billions to shareholders.

 

But in recent days they have come under pressure to hold onto the money.

 

'A sensible step'

The deputy governor of the Bank of England, Sam Woods, wrote to some banking
bosses asking them to suspend dividend payments. He asked them to confirm
their decision by Tuesday evening.

 

In a statement, the Prudential Regulation Authority, which is part of the
Bank of England, said: "Although the decisions taken today will result in
shareholders not receiving dividends, they are a sensible precautionary step
given the unique role that banks need to play in supporting the wider
economy through a period of economic disruption."

 

Between them, Lloyds, Royal Bank of Scotland, Barclays, HSBC and Standard
Chartered were expected to pay a total of £15.6bn to shareholders, according
to analysis from investment firm AJ Bell.

 

But they will now retain those funds and not pay out any money to
shareholders until at least the end of the year, which the Bank of England
said "should help the banks support the economy through 2020".

 

Many economists are predicting that the UK, in common with other large
economies, will enter a recession this year, with output set to plummet.

 

Last week, a closely-watched early indicator of economic activity fell to
its lowest ever reading. That led economists at Capital Economics to predict
a 15% contraction in the UK's economy during the second quarter of the year.

 

'Prudent' move

Stephen Jones, chief executive for UK finance, the trade body for banks and
finance companies, told the Today programme that banks were considering
scrapping dividends before the Bank of England mandated it.

 

"It's very prudent for banks to be retaining capital rather than
distributing it in the current environment," he said.

 

Losses will increase on existing loans, he said, meaning lenders need a
bigger buffer to protect deposits and keep the bank running.

 

"It's important that the banks are given as much firepower as they can to
support the economy," he added.

 

However, the Bank said it did not expect the cash to be needed, noting that
the banks had more than enough money in reserve to deal with both a global
recession and a shock in the financial markets.

 

Banks were criticised during the financial crisis 12 years ago when they
paid dividends months before needing the biggest bailouts in history.

 

Since then, banks have been forced to hold more capital to prevent the need
for more public money to be spent on them, although not all banks have fully
recovered. The government still owns 62% of Royal Bank of Scotland, for
example.

 

Barclays' investors will be the first to be affected by the halting of
dividends. Its shareholders had been due to share a payment of more than
£1bn on Friday.

 

Barclays chairman Nigel Higgins said suspending the payment was a "difficult
decision".

 

"The bank has a strong capital base, but we think it is right and prudent,
for the many businesses and people that we support, to take these steps now,
and ensure that Barclays is well placed to continue doing what we can to
help through this crisis," he added.

 

UK consumers are protected up to £85,000 per bank under the Financial
Services Compensation Scheme. In other words, if a bank collapses, savers
will get any money in these accounts up to £85,000 paid back in
compensation.

 

Joint accounts have a protection level of £170,000.

 

This is a significant move from the commercial banks.

 

They decided not to pay shareholders several billion pounds worth of
dividends after receiving a firmly-worded letter from the Bank of England,
which wants the banks to hold on to the money to support lending in the
economy. And, with some of the payments due to be made in just days, the
impact will be felt almost immediately by some shareholders.

 

The Bank of England's watchdog, the Prudential Regulation Authority, also
made clear that it does not expect any of the UK commercial banks to pay
cash bonuses either, although that is yet to be agreed.

 

The logic here is to preserve cash for where it is needed, but the regulator
has also been making the point that this crisis is a moment of potential
redemption for the sector. The banks have the opportunity to distance
themselves from the financial crisis, which they created, to become the
economic saviours of the coronavirus crisis. But that depends on them
preserving cashflow, overdrafts and funding lines to businesses that will
become viable again once the pandemic passes.

 

For example, the chancellor's freelance worker scheme will result in
substantial cash sums being deposited in bank accounts, but not until June,
and much depends on banks keeping workers financially afloat until then.

 

The cancellation of dividends also piles on the pressure for other sectors
that have received money for furloughing workers - or even more direct
government backing - to also consider scrapping their dividend payouts.

 

"These are difficult decisions, not least in terms of the immediate impact
they will have on shareholders," said Barclays chairman Nigel Higgins.

 

"The bank has a strong capital base, but we think it is right and prudent,
for the many businesses and people that we support, to take these steps now,
and ensure that Barclays is well placed to continue doing what we can to
help through this crisis."--BBC

 

 

 

A fifth of smaller UK firms 'will run out of cash'

Nearly a fifth of all small and medium-sized businesses in the UK are
unlikely to get the cash they need to survive the next four weeks, in spite
of unprecedented government support.

 

That's according to research published today, which suggests that between
800,000 and a million businesses nationwide may soon have to close.

 

Many firms have told the BBC that banks have refused them emergency loans.

 

Others can't get through on the phone or were told the money will take
weeks.

 

The banks say they are following the rules set out by the government.

 

Banks under fire for coronavirus loan tactics

Chancellor Rishi Sunak said two weeks ago that businesses would be able to
walk into bank branches and discuss Coronavirus Business Interruption loans
of up to £5m to help them survive the shutdown.

 

The promise from the chancellor was that "any good business in financial
difficulty who needs access to cash to pay their rent, the salaries of their
employees, pay suppliers, or purchase stock, will be able to access a
government-backed loan, on attractive terms".

 

However, thousands of struggling firms can't get through to their banks by
phone or, when they do, are being told by the banks they're not eligible.

 

And Mayor of London Sadiq Khan has told BBC Radio 5 Live that 'banks have
got to step up' to help small and medium-sized businesses survive during the
coronavirus pandemic.

 

Steve Lord runs Belgrave & Powell, a Nottingham-based engineering group
employing 120 people and supplying services to customers such as BAE's
Samlesbury site, where the F-35 and Typhoon fighter jets are made.

 

'Disappointment after disappointment'

Since Salmesbury halted production, his business - like millions of others -
is facing the prospect of cash drying up, threatening its ability to pay
wages and stay afloat.

 

"I was heartened and astonished to see the unprecedented help that was
announced by the government two weeks ago," he said. "But we put one of our
most senior people on it and as each day passed it was disappointment after
disappointment."

 

He said some of the approved lenders were demanding interest rates of up to
30%, which Mr Lord believes is "taking advantage of the situation".
Meanwhile, he said, High Street banks were charging around 7%, however he
was told it could be as long as a month before his firm got the money.

 

Mr Lord thinks too much control has been handed to the banks and approved
lenders: "The government needs to make it so everyone's offering the same
terms."

 

"It seems to be that if you are lucky you are banking with the right party,
if you're not lucky you'll end up having to close your business."

 

'The loans won't help'

Another business owner, Peter Jackson - who runs jewellery shops employing
40 people across the north-west of England - said his bank decided he was
ineligible because the firm made a small loss in 2019. But Mr Jackson said
his business was viable before the shutdown and expected to make a profit
this year. It also owns valuable stock.

 

"I thought the whole point of the loans was to help business like mine stay
afloat," he said. "But they're not going to help."

 

The figures identifying how many businesses would not be able to access cash
come from a network of accountants serving more than 12,000 small and
medium-sized businesses across the country.

 

After analysing the government help on offer, those accountants say that 18%
of their clients were unlikely to get access to the cash they will need to
survive a four-week lockdown.

 

The findings echo similar reports from other business groups, estimating
that up to a fifth of businesses could close if the lockdown lasts a month
or more.

 

Bank say they're following rules set by the government, which mean firms can
only get the emergency loans if they can't borrow in a normal commercial
way, like borrowing against the value of a property.

 

Businesses wanting to borrow more than £250,000 are being told by banks that
directors must sign personal guarantees. That means if the loan goes bad
owing to a prolonged shutdown, their personal property is on the line.

 

Joshua Wade runs a fast-growing ethical cosmetics business, Skin and Tonic.
He said lenders were insisting on early repayment penalties as well as
personal guarantees.

 

"The Business Interruption Loan Scheme is, in principle, very welcome
support right now," he said.

 

"But the huge barrier for us is the requirement for all directors to give
personal guarantees. As founders and executive directors, we already are
risking everything but we simply can't ask our non-executive directors to
take that risk on in such challenging and uncertain times."

 

A spokesperson for UK Finance, the bank trade body, said: "Lenders are
working hard to get financing to all businesses who need it as quickly as
possible and are using the Coronavirus Business Interruption Loan Scheme
(CBILS) where appropriate, with some funding having already been provided
under the scheme.

 

 

"All lenders will take into account a business's individual circumstances
when considering applications and many business loans can be provided either
unsecured or secured on business assets."

 

Kirsty McGregor, founder of the Corporate Finance Network, told the BBC:
"Small and medium-sized businesses employing less than 250 people employ
most of the workforce - 23 million people.

 

"We could lose up to a million of them in the next month or so. And it will
be irreversible which will be catastrophic for the UK economy."

 

Ms McGregor suggested the government needs to encourage small businesses to
take over companies going bust in their area so employees can still be
paid.--BBC

 

 

 

Big splash: The world's largest designer of water parks

In 1980 Geoff Chutter found himself "mortgaged to the underside of the
nostrils", and the owner of a brand new water park.

 

The then 28-year-old had no previous experience of working in the world of
giant water slides and swimming pools, but he thought it would be more fun
than continuing to work as an accountant. So he decided to build his own.

 

Geoff had previously spent five years employed by the auditing firm KPMG
Canada, until one day he came across the country's first water park in the
western province of British Columbia.

 

He was sent there on a work assignment, and he was immediately intrigued.
"It had some basic component that I thought was hugely fun," says Geoff.

 

"How good would it be to spend your life putting smiles on families' faces?"

 

So, inspired, he decided to quit the day job, take a leap of faith, and open
Canada's second water park. Joining with a business partner, he found 18
acres of land in the city of Penticton, British Columbia, and constructed
one.

 

Fast forward 40 years, and Geoff's business - Whitewater West - is today the
world's largest designer and manufacturer of water parks.

 

When he opened that first park back in 1980, Geoff says it was "very much
house is on the line, savings on the line - modest as they were". He adds:
"In reflection, the only thing more naïve than myself was the Royal Bank of
Canada [who gave us the money]."

 

At the time, the water parks industry was in its infancy, with the first
modern attraction opening in Florida in 1977. So Geoff couldn't simply buy
in slides, or even follow some already drawn up plans. Instead he had to
design and build his park from scratch, working with an engineering firm to
create everything.

 

During the park's inaugural summer, something fortuitous happened. "Four
[separate] fellows came by and said 'Gee, I'd like to do that in my home
town. How'd you do it?'" he says.

 

Geoff ended up signing contracts to build four new parks, three in Canada
and one in Washington State, in the US.

 

Launching his new endeavour he had soothed his stress with the thought that,
if the venture failed miserably, he always had accounting to fall back on.

 

But riding that first wave of success, he says that he has "frankly never
looking back".

 

Three years after his park opened, he sold it, divesting completely from
park ownership and operations, to instead focus on waterslide and pool
design, engineering, manufacturing, and delivery.

 

Today, Whitewater has 600 employees around the world, and projects across
six continents, from Russia to India, Brazil to the US, and Australia to
South Africa.

 

With annual sales of $200m (£116m), the firm works with everyone from
hotels, to amusement park behemoths like Disney, for whom it designed the
vast Typhoon Lagoon wave pool in Orlando, Florida.

 

"We're the big boys in the industry - we're the gorillas in the living room,
for sure," says Geoff.

 

The water parks industry has boomed over the decades, with 30.9 million
visiting the top 20 water parks in the world alone in 2018, according to
sector-wide figures. To try to stay ahead of the curve in an industry always
seeking bigger thrills and fresh experiences, Geoff says that the company
focuses on innovation.

 

Teams of designers, architects and engineers work at its headquarters in
Vancouver, alongside artists and sculptors, to create the next most popular
water slides, and other aqueous attractions.

 

While some of Whitewater's North American rivals have not expanded outside
of the US and Canada, Geoff says that he was always keen to build a truly
global presence.

 

Paths to Success

More from the BBC's Paths to Success mini-series:

 

·         How I built a haircare business that reaches 12 countries

·         'It was never my plan to be the boss of a huge company'

·         'That was the worst day of my business life'

·         'I had the glimmer of hope things would work out'

·         How a serious accident led to business success

He credits the time he spent in France as a teenager - he attended the
American School of Paris from 1966 to 1969 - with making him see the world
"an awful lot smaller", and that "it's your oyster". So he was always keen
to explore the possibilities of expanding the company worldwide.

 

"We saw our competition - North American-based - afraid to venture out," he
says. "So we went to Asia, we went to Europe."

 

On occasions, he says the company was warned by sceptics that water parks
just wouldn't work in some countries. In Japan, for example, where
Whitewater opened its first overseas project in 1988, there were concerns
that Japanese women would be too worried about sun exposure to embrace a
water park.

 

"Yet to this day our number one attendance day was 68,000 in a park in
Tokyo, completely blowing up that theory," he says.

 

The business was also told that modesty concerns would get in the way of any
success in the Middle East, but Geoff says that women-only events at a park
in Dubai are a hit.

 

"A lot of cultures we've gone into, we've been told 'Nice idea, but you're
going to fail there'," says Geoff. "[Yet], those components of water, sun,
family, friends - they're very powerful when they're together."

 

The firm now has regional offices in Barcelona, Dubai, and Shanghai, and
manufacturing operations in Turkey, the Philippines and Canada.

 

Dave Sangree, present of consulting firm Hotel and Leisure Advisors, says
that Geoff's stewardship of Whitewater has been "impressive".

 

Turning his attention to the wider water park industry, Mr Sangree says that
it is expected to only continue to grow, especially in Africa and parts of
Asia where the market is not fully developed.

 

"You have a growing middle-class worldwide, people love to spend time with
their children worldwide, and water parks are certainly a fun alternative,"
adds Mr Sangree.

 

Back at Whitewater's headquarters, Geoff is particularly excited about
developing and building surf pools.

 

"I think it's going to be huge fun to be able to say, surf in Saskatoon,
surf in Toronto, and have world-class waves [miles from the ocean]," he
says.

 

It does sound more enjoyable than being an accountant.--BBC

 

 

 

 

 

 

 

 

 


 

 


 

INVESTORS DIARY 2020

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


Companies under Cautionary

 

 

 


 

 

 

 


Bindura Nickel Corporation

 

 

 


Padenga Holdings

 

 

 


Delta Corporation

 

 

 


Meikles Limited

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 


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

 


 

 


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