Major International Business Headlines Brief::: 15 April 2020

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Major International Business Headlines Brief::: 15 April 2020

 


 

 


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

 


 

 


 

 

ü  South Africa rules out IMF programme as central bank cuts rates

ü  South African central bank delivers surprise rate cut and signals more to
come

ü  IMF approves $1 bln in emergency aid for Ghana, $442 mln for Senegal

ü  Safaricom sees 70% jump in data usage as Kenyans stay at home due to
coronavirus

ü  Absa Kenya has restructured 4.25% of loans to ease coronavirus impact

ü  S.Africa's Capitec skips dividend, full-year profits rise 19%

ü  Ugandan shilling posts some gains as banks pare positions

ü  South Africa's rand firms as Chinese trade data lifts riskier currencies

ü  Record oil output cuts fail to make waves in coronavirus-hit market

ü  'World faces worst recession since Great Depression'

ü  US airlines to receive $25bn rescue package

ü  Accenture: ‘Every business will be a health business’

ü  Chancellor Sunak warns of 'tough times' for UK economy

ü  GSK and Sanofi join forces to create vaccine

 

 

 


 <mailto:info at bulls.co.zw> 

 


South Africa rules out IMF programme as central bank cuts rates

JOHANNESBURG (Reuters) - South Africa’s Finance Minister Tito Mboweni ruled
out an International Monetary Fund structural adjustment programme on
Tuesday but said the COVID-19 pandemic would cause a deep recession and
stretch weak public finances.

 

Mboweni’s comments came after the central bank unexpectedly cut its main
lending rate by 100 basis points to 4.25%, another step to try to limit the
economic fallout from the coronavirus.

 

Africa’s most industrialised nation was already in recession before it
recorded its first coronavirus case in March. Investors are growing
increasingly anxious about how the government will fund a gaping budget
deficit while time it’s also making critical healthcare interventions.

 

The country has the most confirmed coronavirus cases on the continent, at
2,415.

 

Addressing reporters on a conference call, Mboweni said cabinet ministers
would discuss more economic interventions on Wednesday.

 

On the possibility of IMF funding he said: “We are not looking for budget
support. We would be looking for the COVID-19-specific packages that we can
access, and we are talking to them about that.

 

“We are looking at programmes which would not be accompanied by any
structural adjustment programme,” he said. “We know what to do, we know what
our structural reform programme is.”

 

Asking multilateral institutions, especially the IMF, for cash is deeply
unpopular with a faction in the governing African National Congress and
trade unions the party uses to rally support before elections. The ANC and
two allies warned Mboweni earlier this month against seeking IMF assistance.

 

Mboweni said the government would revise its fiscal framework given the
effects of COVID-19 but wouldn’t say when an “emergency budget” might
happen.

 

“The budget revisions are happening almost every day, ... at some stage very
soon we will have to make a consolidated budget statement,” he said.

 

A copy of the minister’s speaking notes circulated by the National Treasury
said elements to the government’s fiscal response included re-prioritising
some expenditure towards healthcare, a plan to stabilise debt and shutting
down South African Airways.

 

The airline is under a form of bankruptcy protection and depends on
government bailouts for its survival. Mboweni declined to elaborate.

 

ECONOMIC DESTRUCTION

Ramaphosa’s government has been praised for imposing restrictions on
movement before any coronavirus deaths had been recorded. But attention is
now turning to the probable economic consequences.

 

Central bank governor Lesetja Kganyago told a news conference on Tuesday
that the bank’s decision to cut rates was unanimous, after Ramaphosa
extended a 21-day lockdown for a further two weeks on Thursday.

 

“Both the supply and demand effects of this extension reduce growth in the
shorter term as businesses stay shut for longer and households with incomes
spend less,” Kganyago said. “This will likely also increase job losses.”

 

The central bank now expects gross domestic product to contract 6.1% in
2020.

 

The rand turned weaker after the central bank rate cut and its bleak
assessment of the economy’s prospects, trading down around 1.7% at 18.3650
to the U.S. dollar at 1330 GMT.

 

Mboweni said the government had not decided whether to introduce a basic
income grant but that it had to be considered. He added that no agreement
had been reached on pay increases for public-sector employees due to take
effect this month.

 


 <mailto:info at bulls.co.zw> 

 


 

South African central bank delivers surprise rate cut and signals more to
come

JOHANNESBURG (Reuters) - South Africa’s central bank cut lending rates to
record lows on Tuesday following an unscheduled meeting of its policy
committee in response to the economic turmoil wrought by the coronavirus
outbreak.

 

The usually conservative South African Reserve Bank (SARB) reduced its main
lending rate by another 100 basis points (bps) to 4.25% after bringing
forward its May monetary policy committee (MPC) meeting, and signalled
further cuts could follow.

 

Africa’s most industrialised nation has recorded the most confirmed
coronavirus cases on the continent, at 2,173, but that number is expected to
rise significantly as the government embarks on a mass-testing drive.
[nL8N2BW3CU]

 

The central bank had already cut rates by 100 bps in March and by 25 bps in
January. But calls for authorities to take further steps to support the
economy intensified after President Cyril Ramaphosa extended a nationwide
lockdown by two weeks on Thursday. [nL5N2BX72W]

 

Central bank governor Lesetja Kganyago said the decision to cut rates was
unanimous among MPC members. He said it was a response to the extension of
the lockdown and the hit to the economy, which the bank expects to contract
6.1% in 2020.

 

“Both the supply and demand effects of this extension reduce growth in the
shorter term as businesses stay shut for longer and households with incomes
spend less,” Kganyago said.

 

“This will likely also increase job losses with further consequences for
aggregate demand.”

 

The bank does, however, see growth recovering gradually, to 2.1% in 2021 and
2.7% in 2022, once the coronavirus crisis passes and global demand
normalises. It added that falling inflation gave it room to cut rates to
boost demand.

 

The SARB has long resisted public and political pressure to intervene more
directly in providing stimulus, but recent policy moves bring it into line
with major central banks that have run large-scale asset purchase
programmes.

 

Last month, the bank launched a bond-buying programme to plug a liquidity
drought in credit markets that threatened to destabilise commercial banks’
operations. [nL8N2BI1HY]

 

It is also considering a loans-for-funding programme, but did not give
further details about this on Tuesday. Kganyago signalled, though, that
further action was on the table.

 

“The committee notes that the more prolonged lockdown and slower recovery
creates downside risk to inflation and allows further space for monetary
policy to respond to the virus-induced demand shock to the economy,” he
said.

 

The rand weakened in response to the rate-cut decision, and was down 1.24%
at 18.3200 to the dollar at 1250 GMT.

 

 

 

IMF approves $1 bln in emergency aid for Ghana, $442 mln for Senegal

WASHINGTON (Reuters) - The International Monetary Fund on Monday said its
executive board had approved $1 billion in emergency funding for Ghana and
$442 million for Senegal to enable both countries to respond to the
rapidly-spreading coronavirus pandemic.

 

Ghana was at high risk of debt distress, the IMF said in a statement. It
said the large disbursement of emergency aid would help the West African
countries address urgent fiscal and balance of payments needs, and catalyze
support from other development partners.

 

It said it stood ready to provide further policy advice and further support
to both countries as needed.

 

 

 

Safaricom sees 70% jump in data usage as Kenyans stay at home due to
coronavirus

NAIROBI (Reuters) - Kenya’s top telecoms operator Safaricom has seen a 70%
surge in data usage as people stay at home to curb the spread of the new
coronavirus, it said on Tuesday.

 

The government closed schools and asked people to work from home where
possible last month, after the East African nation reported its first case
of the virus.

 

Confirmed cases have risen to 208 and additional restrictions, including a
night time curfew, have been imposed.

 

Safaricom, which is partly owned by South Africa’s Vodacom and Britain’s
Vodafone, said mobile phone data usage had jumped 35% as users streamed
movies, worked from home and used social media sites like Facebook.

 

The company is one of the biggest providers of internet access in Kenya,
supplying 300,000 homes with a fibre connection, and nearly all of the 47
million population with second, third and fourth generation mobile internet
coverage.

 

Along with financial services platform M-Pesa, the data business has been
one of the key drivers of earnings growth for Safaricom in recent years.

 

 

 

Absa Kenya has restructured 4.25% of loans to ease coronavirus impact

NAIROBI (Reuters) - Absa Kenya has restructured 8.3 billion shillings
($78.41 million) of loans, equivalent to about 4.25% of its net loans at the
end of last year, as it seeks to cushion customers who have been hit by the
coronavirus crisis, it said on Monday.

 

The lender, one of the largest in the East African nation by assets, is the
first to disclose the impact of the health crisis on its loan book,
following a loosening of the rules by the central bank last month.

 

“We are working with our customers to help them get through these
extraordinary times,” said Jeremy Awori, CEO of the lender, which is part of
South Africa’s Absa Group.

 

The relief, which is being determined on a case-by-case basis, applies to
personal loans, mortgages, asset finance, credit cards and business loans,
the bank said. Borrowers do not incur additional restructuring costs, it
added.

 

Absa did not comment on the potential impact of the loan restructuring on
its earnings this year. Its pretax profit stood at 10.75 billion shillings
last year.

 

Kenya has 208 confirmed cases of the COVID-19 disease caused by the virus.
Its economy, which relies on farming, tourism and cash sent home from its
citizens abroad, has already started suffering from job losses caused by the
crisis.

 

The government has halved its projected economic growth for this year to 3%
from an initial forecast of 6%.

 

Apart from allowing lenders to offer relief to distressed borrowers, the
central bank has also cut lending rates and lowered the ratio of cash that
commercial banks are required to hold.

 

Authorities have also reduced value added tax by two percentage points to
14% and proposed eliminating income tax for the lowest earners.

 

($1 = 105.8500 Kenyan shillings)

 

 

 

S.Africa's Capitec skips dividend, full-year profits rise 19%

JOHANNESBURG (Reuters) - South African lender Capitec said on Tuesday it
would not pay a dividend for its full year, although profits rose by 19%, in
line with guidance from the country’s central back to scrap payouts amid the
coronavirus outbreak.

 

The South African Reserve Bank (SARB) asked lenders to skip dividends for
2020 earlier in April to preserve capital for lending. Capitec was one of
only a few lenders to not have already declared a dividend at this time.

 

“After extensive deliberation, the board decided to support the guidance of
the Reserve Bank and decided against the declaration of the final ordinary
dividend,” Capitec, which normally pays out 40% of profits to shareholders,
said in its results statement.

 

The banks’ main rivals - South Africa’s big four lenders including FirstRand
and Absa - all reported their results and declared dividends in March. The
SARB has said dividends already announced can be paid.

 

Capitec reported a full-year profit rise of 19%, at the bottom end of a
forecast range of 18% to 21% it outlined in a trading statement last month.
[L8N2BC6T4]

 

Its headline earnings per share - the main profit measure in South Africa -
stood at 5,428 cents ($3.02), verses 4,557 cents a year earlier.

 

The lender grew to become South Africa’s sixth largest bank by assets via a
strategy focused on unsecured lending to lower-income consumers, and is
generally perceived to be more exposed to any economic downturn as a result.
Unsecured lending relies solely on consumers’ promises to repay.

 

A fear of a spike in bad debts following the outbreak of the coronavirus and
a prolonged lockdown to stem its spread have pummelled bank shares, with
Capitec in particular suffering.

 

Its credit impairment charge rose by 14% over the year to February, in line
with other banks which also saw impairments spike as the South African
economy deteriorated.

 

($1 = 17.9976 rand)

 

 

 

Ugandan shilling posts some gains as banks pare positions

KAMPALA (Reuters) - The Ugandan shilling traded stronger on Tuesday on the
back of a sell-off in the interbank market as some players sought to trim
their hard currency positions, traders said.

 

At 0936 GMT commercial banks quoted the shilling at 3,765/3,775, compared to
last Thursday’s close of 3,780/3,790.

 

Markets were closed on Friday and Monday for the Easter holidays.

 

 

 

South Africa's rand firms as Chinese trade data lifts riskier currencies

JOHANNESBURG (Reuters) - South Africa’s rand firmed against the dollar early
on Tuesday, in line with a rally in riskier currencies as China’s trade data
painted a less gloomy picture of the economic fallout from the coronavirus
pandemic than markets had feared.

 

At 0630 GMT, the rand traded at 18.0600 per dollar, 0.2% firmer than its
previous close.

 

China’s March exports fell 6.6% from a year earlier, compared with a
forecast for a 14% drop and imports fell by less than 1%, compared with a
9.5% drop anticipated by economists.

 

Analysts, however, expect the rand to remain volatile, with a grim outlook
for South Africa’s economy after the country imposed some of the toughest
restrictions on the continent to curb the spread of the new coronavirus,
including a 5-week lockdown to the end of April that has halted production.

 

“The world is still concerned about the impact of the COVID-19 outbreak on
economic growth, with many countries still enduring some form of lockdown,”
said Bianca Botes, executive director at Peregrine Treasury Solutions.

 

South Africa entered a recession in the final quarter of last year as power
cuts by state utility Eskom took a toll on the economy.

 

Government bonds were weaker, with the yield on the 10-year instrument due
in 2030 rising 14 basis points to 10.950%.

 

 

 

Record oil output cuts fail to make waves in coronavirus-hit market

SINGAPORE/LONDON (Reuters) - The minimal impact on oil prices from a global
deal for record output cuts showed that oil producers have a mountain to
climb if they are to restore market balance as the coronavirus shreds demand
and sends stockpiles soaring, industry watchers said.

 

After several days of deliberation, the Organization of the Petroleum
Exporting Countries (OPEC) and allies led by Russia hammered out an
agreement to cut output by 9.7 million barrels per day in May and June,
equal to nearly 10% of global supply. Other major producers like the United
States and Canada gave indirect commitments to cuts as well, playing up
forecasts for drastic production declines in coming months due to the
free-fall in prices.

 

The oil market has barely shrugged, however: both U.S. and Brent benchmarks
notched 1% gains on Monday. The move underscores what both investors and
producers already understand - that the monumental deal to cut supply in
face of a 30% drop in demand could only accomplish so much initially.

 

Saudi Arabia’s energy minister downplayed the move in oil prices on Monday,
saying anticipation of the cuts was the reason for a rally in oil prices
before the meeting. Since dipping below $22 a barrel two weeks ago, Brent
has rebounded by roughly 48%. [nL5N2C12HD]

 

“It’s the typical deal, you know: buy the rumour, and sell the news,” Prince
Abdulaziz bin Salman said.

 

The minister added on Monday that effective global oil supply cuts would
amount to around 19.5 million barrels per day, taking into account the
reduction pact agreed by OPEC+, pledges by other G20 nations and oil
purchases into reserves. He said that G20 nations had pledged to cut about
3.7 million bpd and that strategic reserves purchases would reach roughly
200 million barrels over the next couple of months,

 

Both Brent and WTI have lost more than half of their value this year.

 

The cut by OPEC+ may be more than four times deeper than the previous record
set in 2008 and overall oil supply may shrink by twice that with other
measures. Yet the reduction remains dwarfed by a demand drop predicted by
some forecasters to be as much as 30 million bpd in April. [nL4N2BN60G]
[nL5N2C127M]

 

“Even if these cuts provide a floor to prices they will not be able to boost
prices given the scale of inventory builds we are still staring at,” Energy
Aspects analyst Virendra Chauhan said.[nL8N2BP4OA]

 

“The absence of hard commitments from the United States or other G20 members
is (a) shortcoming of the deal.”

 

Big producers such as Canada, Norway and the United States have yet to
commit publicly to fixed quotas.

 

“The deal failed to reach the reduction levels anticipated by the market,”
Takashi Tsukioka, president of the Petroleum Association of Japan (PAJ),
said in a statement.

 

“We hope OPEC+ will continue their talks to stabilise oil markets,” he said.

 

Because of the deep OPEC+ cuts, the U.S. shale industry may avoid the
worst-case scenario of a 3.5 million bpd production drop, instead falling
just 1.8 million bpd, analysts at Bank of America said on Monday.

 

While the core number in the deal suggests a near 10 million bpd cut, Middle
East producers such as Saudi Arabia, the United Arab Emirates and Kuwait may
have to reduce by more than the 23% cut to which they signed up.

 

FOCUS ON RESERVES

Energy analysts at FGE expect oil stockpiles in developed nations to grow in
the second quarter to levels last seen in 1982.

 

The Brent futures contango, a market structure whereby future prices are
higher than those in the nearer term, deepened on Monday, for both a
six-month horizon and for a year ahead.

 

“(But) as a result of the production cuts, the global oil market will have
the largest spare capacity in at least a decade, leading to a flatter Brent
crude oil curve,” Bank of America analysts said.

 

The next major focus for markets will be numbers from the U.S. Department of
Energy on its strategic petroleum reserves (SPR).

 

A veteran Singapore oil trader, who declined to be named due to company
policy, said the inventory build would continue, albeit at slower pace
because of the OPEC+ pact. Saudi Arabia cut its crude selling prices to Asia
on Monday, while lifting prices for the United States and leaving prices to
Europe unchanged. [nL5N2C112L]

 

“Most of the SPR (held by countries around the world) are pretty full
already. Probably China still has some room, but the rest, I doubt there is
anything significant,” he added.

 

China, the world’s largest oil importer, remains the outlier. Its refiners
are set to raise crude oil throughput this month by 10% from March as the
country where the coronavirus originated recovers from the outbreak faster
than elsewhere. [nL4N2BR1ER]

 

“China is unlikely to make any firm commitment, especially as Far East
consumers are still paying a premium for Mideast supplies versus western
consumers,” one Beijing-based state oil company official said on condition
of anonymity, citing company policy.

 

 

 

'World faces worst recession since Great Depression'

The global economy will contract by 3% this year as countries around the
world shrink at the fastest pace in decades, the International Monetary Fund
says.

 

The IMF described the global decline as the worst since the Great Depression
of the 1930s.

 

It said the pandemic had plunged the world into a "crisis like no other".

 

The Fund added that a prolonged outbreak would test the ability of
governments and central banks to control the crisis.

 

Gita Gopinath, the IMF's chief economist, said the crisis could knock $9
trillion (£7.2 trillion) off global GDP over the next two years.

 

'Great Lockdown'

While the Fund's latest World Economic Outlook praised the "swift and
sizeable" response in countries like the UK, Germany, Japan and the US, it
said no country would escape the downturn.

 

It expects global growth to rebound to 5.8% next year if the pandemic fades
in the second half of 2020.

 

Ms Gopinath said today's "Great Lockdown" presented a "grim reality" for
policymakers, who faced "severe uncertainty about the duration and intensity
of the shock".

 

"A partial recovery is projected for 2021," said Ms Gopinath. "But the level
of GDP will remain below the pre-virus trend, with considerable uncertainty
about the strength of the rebound.

 

"Much worse growth outcomes are possible and maybe even likely."

 

Sharpest UK downturn in a century

The IMF predicts the UK economy will shrink by 6.5% in 2020, compared with
the IMF's January forecast for 1.4% GDP growth.

 

A decline of this magnitude would be bigger than the 4.2% drop in output
seen in the wake of the financial crisis.

 

It would also represent the biggest annual fall since 1921, according to
reconstructed Bank of England data dating back to the 18th century.

 

However, this is half the annual rate expected by the OBR, which expects GDP
to drop by 35% in the three months to June.

 

The UK's furlough scheme, which is designed to keep workers in a job amid
the government lockdown, is expected to limit the rise in unemployment to
4.8% in 2020, from 3.8% last year.

 

UK Chancellor Rishi Sunak has pledged billions of pounds in wage subsidies
and loan guarantees to help workers and businesses through the shutdown.

 

The Bank of England has also slashed interest rates to a new low and freed
up billions of pounds for commercial banks to lend.

 

Global pain

Ms Gopinath said that for the first time since the Great Depression, both
advanced and developing economies were expected to fall into recession.

 

The IMF warned that growth in advanced economies would not get back to its
pre-virus peak until at least 2022.

 

The US economy is expected to contract by 5.9% this year, representing the
biggest annual decline since 1946. Unemployment in the US is also expected
to jump to 10.4% this year.

 

A partial recovery is expected in 2021, with expected US growth of 4.7%.

 

The Chinese economy is expected to expand by just 1.2% this year, which
would be the slowest growth since 1976. Australia is expected to suffer its
first recession since 1991.

 

The IMF warned that there were "severe risks of a worse outcome".

 

It said that if the pandemic took longer to control and there was a second
wave in 2021, this would knock an additional 8 percentage points off global
GDP.

 

The Fund said this scenario could trigger a downward spiral in
heavily-indebted economies.

 

It said investors might be unwilling to lend to some of these nations, which
would push up borrowing costs.

 

The IMF added: "This increase in sovereign borrowing costs or simply fear of
it materialising, could prevent many countries from providing the income
support assumed here."

 

Economic medicine

While longer lockdowns will constrain economic activity, the IMF said
quarantines and social distancing measures were vital.

 

It said: "Upfront containment measures are essential to slow the spread of
the virus and allow health care systems to cope and to help pave the way for
an earlier and more robust resumption of economic activity.

 

"Uncertainty and reduced demand for services could be even worse in a
scenario of greater spread without social distancing"

 

The IMF set out four priorities for dealing with the pandemic.

 

It called for more money for health care systems, financial support for
workers and businesses, continued central bank support and a clear exit plan
for the recovery.

 

It urged the world to work together to find and distribute treatments and a
vaccine.

 

The Fund added that many developing nations would need debt relief in the
coming months and years.--BBC

 

 

 

US airlines to receive $25bn rescue package

The US has agreed a roughly $25bn (£19.8bn) rescue package for 10 of the
country's biggest airlines as travel plunges due to the coronavirus.

 

American Airlines, United, Delta and Southwest are among the recipients.

 

The money is to be used for payroll and will be provided through a
combination of low-cost loans and direct grants.

 

Congress had planned for the aid as part of its roughly $2tn emergency
relief bill last month but airlines had been negotiating the deal.

 

Rescue package

Under terms outlined by the US Treasury Department last week, major airlines
were expected to repay about 30% of the payroll funds they receive.

 

Congress had also included conditions when it crafted the emergency aid law,
such as prohibitions against involuntary furloughs and bars on reducing
worker pay and benefits until the end of September.

 

The terms also limit share repurchases until the end of September 2021 and
executive pay until the end of March 2022.

 

US Treasury Secretary Steven Mnuchin on Tuesday said the airline deal would
"support American workers and help preserve the strategic importance of the
airline industry while allowing for appropriate compensation to the
taxpayers".

 

"We look forward to working with the airlines to finalise the necessary
agreements and disburse funds as quickly as possible."

 

Confirmation that the airlines would use the payroll bailout lifted industry
shares in after-hours trading, sending American Airlines up more than 8% and
United Airlines up more than 7%.

 

American Airlines boss Doug Parker said his company expects to receive more
than $10bn in support, including$5.8bn in payroll funds, of which it expects
about $4.1bn is set to be a grant. The firm will also apply for a government
loan through a different programme.

 

"The support our government has entrusted to us carries immense
responsibility and an obligation that American Airlines is privileged to
undertake," American chief executive Doug Parker said.

 

Other companies set to receive aid include Southwest which said it would
receive a total of $3.2bn, including $2.3bn in payroll support.

 

Bailout concerns

Global airlines group IATA has forecast more than $300bn in losses related
to the coronavirus and warned that some 25 million jobs are at risk.

 

In the US travel has dropped more than 95%, leading to widespread
cancellations, fleet groundings and billions in losses.

 

However, the industry had faced criticism for spending money in recent years
to repurchase shares, instead of investing the money back into the company
or it workers.

 

Politicians have also been worried that bailouts of private firms will lead
to controversy as happened during the 2008 financial crisis.

 

The labour union that represents flight attendants, the Association of
Flight Attendants-CWA International, said it believed Congress had intended
airlines to receive all $25bn in payroll support in the form of grants but
it nevertheless welcomed news that the industry and the White House had come
to terms.

 

"We are closer than ever to almost a million airline workers knowing they
will receive their pay cheque and keep their healthcare and other benefits,
at least through September," the group's president, Sara Nelson, said. "This
is an unprecedented accomplishment - a truly workers-first stimulus."

 

At the beginning of April, 250 trades unions and environmental groups signed
an open letter opposing unconditional bailouts of airlines.—BBC

 

 

 

Accenture: ‘Every business will be a health business’

Consultancy firm Accenture says all firms will have to be focused on health
even after the coronavirus outbreak ends.

 

Theme parks taking guests’ temperatures to factories using thermal scanners
could become permanent fixtures.

 

“We used to say every business will be a digital business,” said Gianfranco
Casati, Accenture’s chief executive for growth markets.

 

“But today we say every business will be a health business."

 

Mr Casti gave the example of Ferrari which has launched its "Back on Track"
plan developed with a pool of virologists and health experts to create a
safe working environment for its employees.

 

He predicts that other companies may be required to put in place various
conditions for people to return to work, such as having an onsite medical
team.

 

“Companies will need to invest in health resources to make their employees
feel safe. Thankfully, technology can help them get there.”

 

Last week, Disney executive chairman Bob Iger warned the entertainment giant
might require visitors to have their temperatures checked when its theme
parks are reopened, even after restrictions on public gatherings are lifted.

 

"Just as we now do bag checks for everybody that goes into our parks, it
could be that at some point, we add a component of that that takes people’s
temperatures," Mr Iger told financial magazine Barron's.

 

Accenture, which employs 509,000 employees globally, said the majority of
its China-based staff have now returned to its offices, having been working
from home during the national lockdown.

 

“But they are not going back to how things were before. We are now faced
with the new normal.”--BBC

 

 

 

Chancellor Sunak warns of 'tough times' for UK economy

A forecast by the UK's tax and spending watchdog suggests the coronavirus
crisis will have "serious implications" for the UK economy, Chancellor Rishi
Sunak has said.

 

The Office for Budget Responsibility (OBR) warned the pandemic could see the
economy shrink by a record 35% by June.

 

Mr Sunak stressed that the forecast was only one possible scenario.

 

But he said it was important that the government was "honest with people
about what may be happening".

 

He said the OBR figures suggest that the scale of what the UK is facing
"will have serious implications for our economy", in common with other
countries.

 

"These are tough times, and there will be more to come," Mr Sunak said.

 

However, he said that while the government could not protect every business
and household, "we came into this crisis with a fundamentally sound economy,
powered by the hard work and ingenuity of the British people and British
businesses."

 

The OBR also expects the economic impact of the crisis to be temporary, he
said.

 

He added that the government is "not just going to stand by" and not act to
support the economy.

 

"Our planned economic response is protecting millions of jobs, businesses,
self-employed people, charities, and households," he said.

 

"Our plan is the right plan."

 

Mr Sunak added that at the moment "the single most important thing we can do
to protect the economy is to protect the health of our people."

 

The OBR said a three-month lockdown followed by three months of partial
restrictions would trigger an economic decline of 35.1% in the quarter to
June alone, following growth of 0.2% in the first three months of this year.

 

Robert Chote, the chairman of the OBR, said a drop of this magnitude would
be the largest "in living memory".

 

While the UK economy would contract by 12.8% this year under this scenario,
it is expected to get back to its pre-crisis growth trend by the end of
2020.

 

The OBR stressed the actual amount of growth would depend on how long the
lockdown lasted, as well as how quickly activity bounced back once
restrictions were relaxed.

 

In any case, it expects half of any sharp drop in growth in the second
quarter to be reversed in the three months to September as the economy
starts to recover.

 

Separately, the International Monetary Fund warned the virus would push the
UK into its deepest slump for a century.

 

In its report, the IMF said it expects the UK economy to shrink by 6.5% in
2020, while the global economy will contract by 3%.

 

Coronavirus-related deaths in UK hospitals have risen to 12,107, an increase
of 778 on Monday's total.

 

And more than one in five deaths in England and Wales is linked to
coronavirus, figures show.

 

The Office for National Statistics data showed the virus was mentioned on
3,475 death certificates in the week ending 3 April.

 

It helped push the total number of deaths in that week to more than 16,000 -
a record high and 6,000 more than expected at this time of year.

 

'Unprecedented financial help'

The OBR's estimates said a three month lockdown would push up the UK's
borrowing bill to an estimated £273bn this financial year, or 14% of gross
domestic product (GDP).

 

This would represent the largest deficit as a share of GDP since World War
Two.

 

While borrowing is expected to jump, the OBR said the government's
unprecedented financial help for workers and businesses would help to limit
any long-term damage.

 

The OBR expects a more lasting impact on unemployment, which is estimated to
rise by 2.1 million to 3.4 million by the end of June.

 

Under this scenario, unemployment would hit 10%, from its current 3.9% rate,
before easing to around 7.3% at the end of the year.

 

The jobless rate is expected to remain elevated until 2023, when it is
expected to drop back to 4%, in line with the OBR's March forecast.

 

These are incredible numbers indicated by the government's official, though
independent, forecasters at the OBR.

 

They illustrate what is at stake, and why the government has to get its
economic rescue plans spot on. They will feature at the COBR discussions.
Indeed some senior public health experts believe that the government needs
an economic counterpart to the influential SAGE committee of scientists.

 

But this isn't quite about a direct trade off. That existed clearly on the
way in - the economy was shut down to protect public health. On the way out
of these measures, the balance is not straightforward.

 

If the lockdown is lifted prematurely, the health system could fall over,
workers might just refuse to go to work anyway, and none of that would be
positive for the economy.

 

Indeed when it is lifted, the absence of a vaccine means that these trade
offs are likely to be considered week by week and sector by sector, for
months to come.

 

Hit to public finances

The OBR expects UK debt to be higher for years to come, with extra borrowing
expected to push Britain's debt share to above 100% of GDP this financial
year if the lockdown lasts for three months.

 

While this will drop sharply as the UK economy recovers, public debt is
expected to remain at 84.9% of GDP in four years time, much higher than the
75.3% forecast in the March Budget.

 

Mr Chote said a longer lockdown could have more serious consequences for the
economy.

 

He said: "The longer the lockdown goes on, the more likely it is that the
future potential of the economy is scarred by business failures, by less
business investment and by the unemployed finding it harder to get back into
the labour market."

 

However, the OBR stressed that the restrictions were necessary to protect
the economy from a more prolonged slowdown.

 

It said extra spending by the Treasury to support the economy would also
limit the economic damage.

 

"The government's policy response will have substantial direct budgetary
costs, but the measures should help limit the long-term damage to the
economy and public finances - the costs of inaction would certainly have
been higher," the OBR said.—bbc

 

 

 

GSK and Sanofi join forces to create vaccine

GSK and Sanofi, two of the world's biggest pharmaceutical giants, are
joining forces to try and create a vaccine to stop the spread of Covid-19.

 

The bad news is that the vaccine - even if it is successful - will not be
ready till the second half of next year.

 

GSK's chief executive Emma Walmsley told the BBC that vaccines usually take
a decade to develop and test.

 

A plan to make a vaccine available in just 18 months was a huge acceleration
of the normal process, she said.

 

GSK is also involved in a tie-up with the UK's other pharma giant
AstraZeneca to help the government hit its target of conducting 100,000
tests by the end of April.

 

Emma Walmsley said she hoped that the UK's two biggest pharmaceutical
companies could help provide 30,000 daily tests by the beginning of May.

 

A substantial contribution but leaving some way to go to hit the target.

 

GSK also said it would channel any profits made from its vaccine programme
into increased research and development into future virus threats.

 

When asked whether it was appropriate for any company to profit from a
global emergency Emma Walmsley promised that the company would not show any
net profit from vaccine sales and along with future research investment, GSK
would use any profits to subsidise vaccine deliveries to developing
countries.

 

Are we getting closer to a coronavirus vaccine or drug?

Other groups have promised faster vaccine results. Sarah Gilbert, an Oxford
University professor engaged in a separate search for a vaccine, said she
was "80 per cent confident" her team's development would work by autumn.

 

There are more than 20 vaccines currently in development. Among those under
way at the moment are:

 

GSK boss Walmsley said she wished other companies and partnerships good luck
in developing their own solutions.

 

But she also said that they were uniquely placed to bring expertise,
complementary science and - perhaps most importantly - manufacturing muscle
to produce a desperately needed vaccine in the quantities needed.--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
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been compiled from sources believed to be reliable, but no representation or
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opinions expressed and recommendations made are subject to change without
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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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