Major International Business Headlines Brief::: 30 April 2020

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Major International Business Headlines Brief::: 30 April 2020

 


 

 


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ü  Kenya's central bank cuts benchmark lending rate again

ü  IMF OKs $3.4 bln emergency aid for Nigeria's pandemic response

ü  Kenya's GDP growth to plunge to 1.5% in 2020 due to coronavirus -World
Bank

ü  South African retailer Edcon to file for bankruptcy protection

ü  South Africa's PSG Group mulls unbundling stake in Capitec Bank

ü  Kenya's Safaricom dials up Google for million smart phone offer

ü  S.Africa union tells mineworkers to resist Harmony Gold mine restart

ü  S.Africa's Village Main Reef postpones potential job cuts until lockdown
ends

ü  South African state airline SA Express faces liquidation

ü  Coronavirus: Stock markets boosted by remdesivir drug hopes

ü  Tesla warns on shutdown as Musk calls for end to lockdown

ü  US blacklists five Amazon foreign websites

ü  Coronavirus: US economy shrinks at fastest rate since 2008

ü  Coronavirus: Half world's workers may see livelihood destroyed

 

 

 


 <mailto:info at bulls.co.zw> 

 


Kenya's central bank cuts benchmark lending rate again

NAIROBI (Reuters) - Kenya’s central bank cut its benchmark lending rate
again on Wednesday, to 7.0% from 7.25%, saying measures to tackle the impact
of the coronavirus were having an effect but it needed to do more due to the
adverse economic outlook.

 

Kenya has confirmed 384 cases and 14 deaths, and its tourism and agriculture
exports businesses have suffered from global shutdowns aimed at curbing the
virus’ spread.

 

It has imposed a daily curfew, suspended international passenger travel and
restricted movement in and out of the regions most affected by the virus,
including the capital Nairobi.

 

“In light of the continuing adverse economic outlook, the (monetary policy
committee) decided to augment its accommodative monetary policy stance,” the
central bank said in a statement.

 

The bank forecast economic growth of 2.3% this year, down from its March
forecast of 3.4%, and from its estimate of 6.2% earlier this year.

 

“Taking into account the recent growth projections for our trading partners,
Kenya’s GDP growth in 2020 is forecast to decline sharply,” the bank said.

 

At its meeting in March, the bank cut the lending rate by 100 basis points,
and also lowered the cash reserve ratio for commercial banks to 4.25% from
5.25%.

 

It said it stood ready to take any additional measures as necessary and that
it would reconvene within a month.

 

The bank said 43.5% of the funds — 35.2 billion Kenyan shillings ($328.48
million) — released into the banking system had already been used, with most
going to the tourism, real estate, trade and agriculture sectors.

 

It also said that as a result of emergency measures it announced in
mid-March, loans worth 81.7 billion Kenyan shillings ($762.41 million) had
been restructured mainly in tourism, restaurants and hotels, real estate,
building and construction and trade.

 

The bank said there was a need to set up a mechanism to cushion small and
medium businesses.

 

It said it forecast the current account deficit to be 5.8% of gross domestic
product this year, from its projection of 4.0 to 4.6% in March, and from
5.8% in 2019 and 2018.

 

The bank said a projected fall in remittances was going to be more than
offset by lower oil imports.

 

Finance Minister Ukur Yatani said on Tuesday 2020 economic growth would
decline to 2.5% but may fall to 1.8%, compared with 5.4% in 2019, because of
the coronavirus outbreak.

 

The Finance Ministry had forecast growth of 6.1% for this year before the
health crisis swept around the globe.

 

The International Monetary Fund and World Bank have also slashed Kenya’s
2020 economic growth forecasts.

 

The government has announced a series of tax cuts for individuals and
companies and allowed lenders to restructure loans for individuals and firms
who might fall into distress.

 

($1 = 107.1600 Kenyan shillings)

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

IMF OKs $3.4 bln emergency aid for Nigeria's pandemic response

WASHINGTON (Reuters) - The International Monetary Fund said on Tuesday its
executive board approved $3.4 billion in emergency financial assistance for
Nigeria to support the oil exporter’s response to the coronavirus pandemic.

 

The global lender said it remained closely engaged with Nigerian authorities
and was ready to provide policy advice and further support as needed.

 

The outbreak and sharp fall in oil prices have magnified headwinds in the
Nigerian economy, triggering a historic decline in growth and large
financing needs, the IMF said.

 

The funds will help Nigeria limit its decline in international reserves and
finance temporary spending hikes to contain the pandemic and mitigate its
economic impact as well that of falling oil prices.

 

IMF Managing Director Kristalina Georgieva said on Monday she expected the
fund to provide Nigeria with significant emergency financing by the end of
April. [nL2N2CF0PQ]

 

In a statement, Mitsuhiro Furusawa, IMF deputy managing director, said
additional declines in oil prices and more protracted containment measures
would seriously affect the country’s economy and strain its financing.

 

He welcomed Nigeria’s immediate actions to respond to the crisis, including
steps to help households and businesses, and move toward a more unified and
flexible exchange rate.

 

“Once the COVID-19 crisis passes, the focus should remain on medium-term
macroeconomic stability, with revenue-based fiscal consolidation essential
to keep Nigeria’s debt sustainable and create fiscal space for priority
spending,” he said.

 

Furusawa said Nigeria would need additional assistance from development
partners to close the large financing gap, and underscored the importance of
proper governance arrangements and independent audits to ensure emergency
funds are used as intended.

 

 

 

Kenya's GDP growth to plunge to 1.5% in 2020 due to coronavirus -World Bank

NAIROBI (Reuters) - Kenya’s economic growth is expected to drop to 1.5% this
year, and contract 1% in the worst-case scenario under the impact of the
coronavirus outbreak that has hit tourism, agricultural exports and
remittances, the World Bank said on Wednesday.

 

As of Tuesday, Kenya had 374 confirmed cases of the novel coronavirus, with
14 deaths. To stem the disease’s spread, Kenya has suspended commercial
flights in and out of the country, imposed a dusk-to-dawn curfew and banned
public gatherings. It has also halted movement into and out of Kenya’s five
regions most affected by the virus, including the capital Nairobi.

 

Tourism and horticulture, foreign exchange earners and major employers are
some of the sectors most affected by the outbreak-induced slowdown.

 

“The COVID-19 shock is expected to further reduce growth... with large
impacts on services (transport, retail trade, tourism, events, leisure,
etc), industry (manufacturing and construction), and agriculture,” the World
Bank said in its economic update for Kenya released on Wednesday.

 

“Measures taken to slow down the rate of infection, including home
confinement, travel restrictions, the closure of schools and entertainment
spots, the suspension of public gatherings and conferences, and a nightly
curfew are expected to affect both production and consumption...”

 

In January, the World Bank forecast 6% economic growth this year in Kenya,
East Africa’s largest economy.

 

The bank said a more severe global recession would hit Kenya’s export
demand, tourism earnings and remittances, while weather-related shocks and a
widening fiscal deficit could also present more downward risks.

 

“This is a type of shock that is applying for everyone. This is a truly
exogenous shock,” Peter Chacha, senior economist for World Bank Kenya, said
in a conference call on Monday before the report’s release.

 

The bank said Kenya’s economic growth could rebound to 5.2% in 2021 if its
virus containment measures ease by the second half of this year.

 

On Tuesday, Finance Minister Ukur Yatani said 2020 economic growth would
decline to 2.5% but may fall to 1.8%, compared with 5.4% in 2019, because of
the coronavirus outbreak. [nL8N2BV52T]

 

Yatani said Kenya expects to access 75 billion shillings ($701.26 million)
from an International Monetary Fund standby facility by mid-May to help the
economy withstand the effects of the COVID-19 pandemic.

 

Kenya has limited financial room to navigate the crisis after years of
increased borrowing to fund a range of infrastructure projects including a
new, Chinese-built railway, left it with gaping budget deficits.

 

“The extent of COVID-19’s impact on the economy could add excess fiscal
pressures resulting in another round of fiscal slippage, which could derail
efforts to contain debt growth and further crowd out private sector-led
growth after the crisis,” the bank said in its report.

 

The Nairobi government has passed a series of tax cuts aimed at cushioning
individuals and companies from the impact of the coronavirus.

 

 

 

 

South African retailer Edcon to file for bankruptcy protection

JOHANNESBURG (Reuters) - South African retailer Edcon will file for
bankruptcy protection in the next few days, it said on Wednesday, becoming
the country’s first major corporate casualty of the coronavirus pandemic.

 

Edcon said it had lost 2 billion rand ($108 million) of sales since the
virus reached South Africa in early March and the government responded with
a nationwide lockdown that forced non-essential shops to close.

 

That hit, coupled with a decline in collections from debtors, meant the
company, which owns department stores chain Edgars and budget clothing
retailer Jet, was unable to pay suppliers and creditors in March and April,
it said in a statement.

 

According to its website, Edcon has more that 14,000 permanent staff and
around 25,000 temporary employees.

 

When the five-week lockdown is lifted on May 1, Edcon’s stores will be
re-opened under the business rescue proceedings, a form of bankruptcy
protection.

 

In a letter addressed to creditors, suppliers and stakeholders, seen by
Reuters, Chief Executive Grant Pattison said the start of the process meant
a moratorium on legal and enforcement actions against the company.

 

“We will be working closely with the appointed business rescue
practitioners, shareholders and government to find a way to plug the
financial hole,” he said in the letter.

 

“It is my hope that some version of the business will emerge to continue to
serve customers.”

 

Edcon said it anticipates that sales will be depressed for some time during
the phased lifting of the lockdown, which may last several months.

 

Just before the country went into the lockdown on March 26, Pattison warned
the group might need to seek protection from creditors and would be heavily
dependant on business support packages offered by government and other
agencies and funders.

 

Edcon has been grappling with debt for several years after troubles in its
credit business in 2014 coincided with an economic slowdown. Bain Capital,
which took control of Edcon in a leveraged buyout in 2007, gave up equity
control in 2016 to creditors.

 

Since then it has been trying to restructure by trimming its head office and
stores, negotiating lower rents, and pushing its own clothing brands while
cutting back on international labels.

 

A lifeline came in March last year when it secured 2.7 billion rand in new
cash and rent deductions from shareholder the Public Investment Corporation
and participating landlords.

 

Edcon said on Wednesday the money had been substantially used to fund losses
for the financial years ending March 2019 and March 2020.

 

($1 = 18.4991 rand)

 

 

 

 

South Africa's PSG Group mulls unbundling stake in Capitec Bank

(Reuters) - Investment holding firm PSG Group Ltd said on Wednesday it was
“seriously considering” separating its stake in Capitec Bank to avoid an
increase in administrative burden under a new legislation that may deem it a
status of financial conglomerate.

 

PSG Group is the largest shareholder in Capitec Bank, with a near 31% stake.
PSG has a market capitalisation of ZAR 36.92 billion ($2.00 billion).

 

($1 = 18.4924 rand)

 

 

Kenya's Safaricom dials up Google for million smart phone offer

NAIROBI (Reuters) - Kenya’s biggest telecoms operator Safaricom is
partnering with Google to offer 1 million affordable smart phones, its chief
executive said on Wednesday.

 

The Kenyan company, which is part-owned by South Africa’s Vodacom and
Britain’s Vodafone, is ramping up its data business to offset a decline in
mobile calls, where it has seen a small revenue fall due to saturation.

 

“Data penetration is still not at the right level. Many people don’t have
smart phones,” Chief Executive Peter Ndegwa told Reuters after an online
investor briefing.

 

Data is one of Safaricom’s fastest growing revenue lines and it hopes that
increased smart phone usage will boost it further.

 

Customers will pay as little as 20 shillings a day for nine months, Ndegwa
said, as Safaricom seeks to eventually convert about 4 million 2G and
3G-enabled phones to 4G.

 

“If you have an app, you can’t use it on a 2G phone,” he said, adding that
Safaricom is also planning to fully cover the East African nation with its
4G network by the end of this year, to further boost the data business.

 

Rapid growth in the data business during the second half lifted Safaricom’s
annual earnings before interest and tax 13.3%to 101.5 billion shillings
($950 million).

 

Revenue from mobile data, where Safaricom has been aggressively fighting for
market share by offering internet bundles without expiry, rose 12.1% to 40.7
billion shillings, after recording 21% growth in the second half.

 

UNIT TRUST TEST

Earnings growth was also driven by the first-ever drop in operating
expenses, Safaricom’s finance chief Sateesh Kamath said.

 

He attributed the drop to digitisation, increased efficiencies and the
maximisation of the use of the assets.

 

Revenue from its M-Pesa financial services business, which allows users to
transfer cash, make payments, borrow and save, jumped 12.6% to 84.4 billion
shillings, a third of Safaricom’s service revenue.

 

Safaricom is testing a unit trust investment product on the platform, which
will generate new revenues, the operator said, without providing more
details.

 

It proposed a dividend of 1.40 shillings per share and said the coronavirus
pandemic has made it impossible to issue guidance for the year to March 31,
2021.

 

Ndegwa, who became CEO this month after heading Diageo’s continental Europe
business, said the uncertainty was mainly due to a lack of clarity on how
long the crisis will last.

 

The company is foregoing about 5.5 billion shillings in revenue from M-Pesa
after it removed charges on small transfers, to facilitate cashless
transactions and help slow the spread of the coronavirus.

 

“If the crisis takes longer, we will need to support our customers even
more,” he said.

 

($1 = 107.0500 Kenyan shillings)

 

 

 

S.Africa union tells mineworkers to resist Harmony Gold mine restart

JOHANNESBURG (Reuters) - The National Union of Metalworkers of South Africa
(NUMSA) has told members not to go back to work at Harmony Gold’s Target
mine on Friday, the union said as mines across the country prepare to
restart as the COVID-19 lockdown eases.

 

“As far as we know, Harmony has not implemented the necessary safety steps
to ensure that the workplace is safe,” NUMSA said in a statement on Tuesday.
“As we speak, with the current skeleton staff, they are failing to maintain
proper health and safety standards.”

 

Mineworkers worldwide are resisting going back to work in deep mines where
social distancing is nearly impossible and where they are sometimes not
provided with adequate personal protective equipment (PPE).

 

NUMSA said it demanded Harmony Gold “drastically” reduce the number of
people in shaft cages, provide the necessary PPE, disinfect mine
accommodation, and pay employees their full salary for the duration of the
lockdown.

 

In response to a request for comments, Harmony Gold said it rolled out a
COVID-19 prevention strategy across its operations before South Africa’s
lockdown was announced, and had a plan to ensure a safe restart.

 

“Harmony’s COVID-19 Standard Operating Procedure is aimed at ensuring a safe
return to work for each of its employees and meeting the conditions
contained in the amended lockdown regulations published in the Government
Gazette on 16 April 2020 for the safe resumption of operations,” the
statement read.

 

Harmony added that it has a medical hub at each of its mines.

 

South Africa government imposed a strict lockdown on March 27 to stop the
spread of the new coronavirus. Most mines were forced to temporarily shut
down.

 

However, mindful of the economic damage caused by the shutdown of a sector
which contributes 8% of gross domestic product, the government on April 16
said it would allow mines to start up again at up to 50% capacity.

 

On May 1 South Africa will begin a phased reopening of the economy with
travel restrictions eased and some industries, such as mining, allowed to
operate.

 

 

 

S.Africa's Village Main Reef postpones potential job cuts until lockdown
ends

JOHANNESBURG (Reuters) - South African gold miner Village Main Reef, which
planned a turnaround of its operations that could lead to job cuts, said on
Wednesday it had agreed to postpone the retrenchment process until after the
nationwide coronavirus lockdown.

 

The unlisted miner, controlled by China-based parent company Heaven Sent
Gold, said it met with the mines minister earlier in April and agreed that
the process would be halted until after the lockdown.

 

The National Union of Mineworkers (NUM), its majority union said last week
up to 6,309 workers could lose their jobs at its Tau Lekoa mine, Kopanang
mine and West Gold Plant. [nL5N2CB3R9]

 

“We were just starting to see positive signs of improvement in March, when
unfortunately, the turnaround strategy was abruptly interrupted by the
outbreak of COVID-19 in South Africa and the subsequent Lockdown (and its
extension),” said Village Main Reef Chief Executive Officer Jeff Dong.

 

Job cuts are a politically sensitive issue in South Africa, where
unemployment stands at around 29%. The mining sector employs around 450,000
people, according to 2019 figures from the Mineral Council industry body.

 

South Africa imposed a strict 21-day lockdown on March 27, which was
extended until May, to stop the spread of the new coronavirus, forcing most
mines to temporarily shut down.

 

However, mindful of the economic damage caused by the shutdown of the
sector, the government on April 16 said it would allow mines to start up
again at up to 50% capacity.

 

 

 

South African state airline SA Express faces liquidation

JOHANNESBURG (Reuters) - A South African court placed state-owned SA Express
under “provisional liquidation” on Tuesday after the airline’s
administrators said rescue efforts weren’t likely to succeed.

 

SA Express, which flies to domestic and regional destinations, entered a
form of bankruptcy protection earlier this year after losing a court battle
with a contractor, logistics firm Ziegler.

 

It later suspended all operations as the global COVID-19 pandemic caused
demand for flights to plunge and governments to impose travel restrictions.

 

The ruling in the Johannesburg High Court means affected parties can still
give reasons why the airline shouldn’t be liquidated before a final order is
made.

 

Public Enterprises Minister Pravin Gordhan said in a statement: “Government
is reviewing its options in all airline assets.”

 

SA Express is a separate business to much larger state airline South African
Airways, which is also under bankruptcy protection and fighting for its
survival.

 

The pair have been a major drain on public resources in recent years,
absorbing billions of rands of bailouts.

 

The public enterprises ministry said last month that the financial woes of
SA Express were rooted in corruption and mismanagement under previous
executives.

 

It rejected an initial request for funding from the airline’s business
rescue team because it lacked a credible business case, it said. The rescue
team did not respond to phone calls seeking comment.

 

 

 

Coronavirus: Stock markets boosted by remdesivir drug hopes

Shares in the US and Asia have risen on hopes that an experimental drug
could help treat symptoms of Covid-19.

 

The top US infectious disease expert said that early results of a clinical
trial on anti-viral treatment remdesivir were "quite good news".

 

Investors are betting the drug could help countries emerge from lockdowns
aimed at curbing the outbreak.

 

Gilead Sciences, which is developing the drug, saw its shares rise by more
than 5.5% New York trading.

 

White House health advisor Anthony Fauci said a National Institute of
Allergy and Infectious Diseases' (NIAID) study showed that the drug had a
"clear-cut, significant, positive effect in diminishing the time to
recovery" from the coronavirus.

 

Markets had already begun to rise after Gilead said preliminary indications
from a remdesivir trial showed that it helped patients recover more quickly.

 

A potential medical breakthrough like this is seen as a key step towards
governments being able to ease the tight restrictions they have imposed on
the movement of people as they try to slow the spread of the infection.

 

Lockdowns across the world have frozen economic activity, led to hundreds of
millions of people being put out of work and raised concerns of a long, deep
global recession.

 

Shares also got a boost from a promise by the US central bank that it would
continue to shore up the American economy against the impact of the
pandemic.

 

At the end of its two-day monetary policy meeting, the Federal Reserve left
key interest rates near zero, while Chairman Jerome Powell warned that the
US economy would drop at an "unprecedented rate" in the current quarter.

 

But he also said growth would pick up as restrictions were lifted and vowed
that the Fed would continue to support the recovery.

 

In morning trade Japan's Nikkei 225 was up by 2.6% and Australia's S&P/ASX
200 was 1.7% higher.

 

That came on the back of strong gains for US stock markets. The Dow Jones
Industrial Average closed 2.2% higher, the S&P 500 ended up by 2.7% and the
Nasdaq gained 3.6%.--BBC

 

 

 

Tesla warns on shutdown as Musk calls for end to lockdown

Demand for Tesla's electric cars held up in the first three months of the
year, despite upheavals caused by the coronavirus pandemic.

 

Quarterly revenues jumped 30% from last year to $5.9bn (£4.7bn), allowing
the firm to turn a small profit of $16m.

 

It is the third quarterly profit in a row for the company, marking a
turnaround after years of losses.

 

But Tesla said forced shutdowns and limits on deliveries had clouded its
forecast for coming months.

 

"Frankly I would call it forcibly imprisoning people in their homes against
all their constitutional rights...that's my opinion," Tesla boss Elon Musk,
who has been opposed to the lockdown measures, told investors in an earnings
call on Wednesday.

 

"It will cause great harm, not just to Tesla but to many firms. While Tesla
will weather the storm, there are many small companies that will not.

 

"And all of people's - everything they've worked for their whole lives has
been destroyed in real time.

 

"We're going to have, and have many suppliers that are on super hard times,
especially the small ones, and it's causing a lot of strife to a lot of
people."

 

He added that Tesla was "a bit worried about not being able to resume
production in the Bay area", and said this should be considered "a key risk"
because the firm only has two car factories - one in Shanghai and one in
Fremont, California.

 

Mr Musk stressed that he did not mind if people wanted to stay at home, but
he was concerned that citizens were being forced to lose their livelihoods
as the lockdown continued.

 

Mr Musk had resisted closing Tesla's main car factory, located in
California, waiting several days after the state's shelter-in-place order in
March to formally suspend production.

 

More recently, he has celebrated plans to relax lockdown orders, writing on
Twitter "FREE AMERICA NOW" early on Wednesday. He had previously dismissed
concerns about the coronavirus as being "dumb".

 

Uncertain guidance

Tesla said it still had the ability to deliver more than 500,000 cars this
year, despite announced shutdowns. But it warned that this could change, as
re-opening dates remain unclear.

 

"It is difficult to predict how quickly vehicle manufacturing and its global
supply chain will return to prior levels," the firm said.

 

"Due to the wide range of potential outcomes, near-term guidance ... would
likely be inaccurate.

 

"For our US factories, it remains uncertain how quickly we and our suppliers
will be able to ramp production after resuming operations. We are
coordinating closely with each supplier and associated government."

 

Tesla's performance comes as car sales have plunged. Ford earlier reported a
$2bn loss in the first quarter and warned investors that it expected another
$5bn hit in the April-June period.

 

Nicholas Hyett, equity analyst at Hargreaves Lansdown, thinks it is no
surprise that Tesla is withdrawing guidance, given the economic risks ahead.

 

"If the world slips into a potentially dramatic economic slowdown, demand
for big ticket items will likely fall and we would be very surprised if
Tesla escape unscathed," he said.

 

"Given that the group's only recently achieved sufficient scale to be
sustainably profitable, that would be less than ideal."

 

Mr Musk's commentary on the virus, which has also included promotion of
unproven medicines, has drawn outcry.

 

It has also revived memories of the controversies he stirred using the
social media platform two years ago, when he made several accusations
against a British cave diver following a rescue operation in Thailand.--BBC

 

 

 

US blacklists five Amazon foreign websites

Five of online retail giant Amazon’s foreign websites have been placed on a
blacklist by the Trump administration.

 

Its e-commerce platforms in the UK, Germany, France, India and Canada have
been added to a “notorious markets” register.

 

The US trade representative’s office said the sites facilitated the sale of
counterfeit and pirated products.

 

Amazon said the move was politically motivated and that it has invested
heavily to prevent illegal activities.

 

The trade representative’s office said that the adding of the Amazon sites
was the result of complaints from US businesses over the sale of fake goods.

 

While the list carries no legal weight, it puts the spotlight on those
companies included on it, especially when they are household names like
Amazon.

 

Amazon described the inclusion of its sites as a “political act” motivated
by President Donald Trump’s apparent dislike of Jeff Bezos, its founder and
chief executive.

 

“This purely political act is another example of the administration using
the US government to advance a personal vendetta against Amazon,” the
company said in a statement.

 

The online shopping giant also said it has made significant investments in
technology to stop counterfeit products from being sold on its platforms.
Amazon’s US website was excluded from the list.

 

According to the report, complaints said the Amazon sites didn’t provide
clear information about sellers and that the process to remove platforms
selling counterfeit goods was “lengthy and burdensome”.

 

In Amazon’s statement it said it had invested significantly in tackling the
problem, and had blocked more than 6 billion bad listings before they were
published to the platform last year.

 

“We are an active, engaged stakeholder in the fight against counterfeit,” an
Amazon spokesperson added.

 

Mr Trump has frequently clashed with Amazon and personally with Mr Bezos,
who owns the Washington Post newspaper. In the past Mr Trump has said that
Amazon doesn’t pay enough in taxes.

 

Last year, Amazon challenged the US Department of Defense in court after
being passed over for a $10bn (£8bn) Pentagon cloud computing contract,
which went to Microsoft. The deal is currently being blocked while federal
judges investigate the claims.--BBC

 

 

 

 

Coronavirus: US economy shrinks at fastest rate since 2008

The US economy suffered its most severe contraction in more than a decade in
the first quarter of the year, as the country introduced lockdowns to slow
the spread of coronavirus.

 

The world's largest economy sank at an annual rate of 4.8%, according to
official figures released on Wednesday.

 

It marked the first contraction since 2014, ending a record expansion.

 

But the figures just hint at the full crisis, since many of the restrictions
were not put in place until March.

 

The pandemic "is causing tremendous human and economic hardship across the
United States and around the world", policymakers at America's central bank
said on Wednesday.

 

The US has tried to cushion the economic blow with nearly $3tn (£2.4tn) in
new spending, including direct payments to many families. The Federal
Reserve has also taken with a slew of emergency steps, including lowering
interest rates to near zero.

 

On Wednesday, Federal Reserve Chair Jerome Powell said the bank would
maintain those levels until it was "confident that the economy has weathered
recent events and is on track". But he warned that the ongoing crisis would
"weigh heavily" on the economy.

 

"Will there be a need to do more? I would say the answer to that will be a
yes," Mr Powell said at a virtual press conference.

 

'Unprecedented' shock

Since mid-March, more than 26 million people in the US have filed for
unemployment, and the US has seen historic declines in business activity and
consumer confidence. Forecasters expect growth to contract 30% or more in
the three months to June.

 

"This is off the rails, unprecedented," said Mark Zandi, chief economist at
Moody's Analytics. "The economy has just been flattened."

 

The contraction in the US economy is part of a global slowdown as a result
of the coronavirus pandemic.

 

In China, where restrictions were in place for much of the quarter, the
economy shrank by 6.8% - its first quarterly contraction since
record-keeping began in 1992.

 

And on Wednesday, Germany said its economy could shrink by a record 6.3%
this year.

 

"We will experience the worst recession in the history of the federal
republic" founded in 1949, Economy Minister Peter Altmaier said.

 

Business hit

Before the coronavirus knocked the global economy off course, the US economy
was expected to grow about 2% this year.

 

But by mid April, more than 95% of the country was was in some form of
lockdown. Although some states have started to remove the orders, they
remain in place in many others, including major economic engines such as New
York and California.

 

Many companies have warned of significant hits related to the pandemic as
they share quarterly results with investors.

 

On Tuesday, General Electric said its revenues had fallen 8% in the first
quarter, while Boeing - already in crisis after fatal crashes of its 737 Max
plane - reported a 48% revenue fall, and said it planned to reduce output
and cut jobs.

 

"The coronavirus pandemic is affecting every aspect of our business,
including airline customer demand, production continuity and supply chain
stability," chief executive Dave Calhoun said.

 

Despite the widespread warnings, share prices have increased in recent weeks
after steep declines earlier in the year. Those gains reflect the Fed's
intervention, but not its forecast for the economy, said Seema Shah, chief
strategist at Principal Global Investors.

 

"[Mr Powell] provided a very sobering assessment of the economic impact,
acknowledging that this will not just be a short, sharp shock, but a more
prolonged event," she said.

 

"With financial markets being backstopped by the Fed for the foreseeable
future, they will likely continue to signal a narrative that is very
detached from the Fed's own solemn economic assessment."

 

Consumer hit

The Commerce Department on Wednesday said consumer spending - which accounts
for about two thirds of the US economy - dropped 7.6% in the first three
months of the year.

 

Spending on food services and accommodation plummeted more than 70%, while
clothing and footwear purchases were down more than 40%.

 

Health spending also plunged - despite the virus - as concerns about
infection prompted doctors to postpone routine treatments and other medical
care.

 

The economic pain in the US is expected to be even more severe in the
April-June period, but economists say even the estimate for the first
quarter is likely to be revised lower, as the government receives more data.

 

"It's very difficult to gauge the depth of the decline," Mr Zandi said. "We
won't really know the extent of the economic damage for years."--BBC

 

 

 

Coronavirus: Half world's workers may see livelihood destroyed

Half of the world's workers are in danger of having their livelihoods
destroyed by the coronavirus pandemic, a United Nations agency has warned.

 

The International Labour Organisation's updated analysis emphasises its
severe impact on people in informal work.

 

It says many have already suffered massive damage to their capacity to earn
a living.

 

Without alternative income, these workers and their families would have no
means to survive, it says.

 

The new analysis says 1.6 billion people's livelihoods are threatened by the
virus, equivalent to almost half the global workforce.

 

Total hours worked are expected to be 10.5% lower than before the crisis
began. That is equivalent to 305 million full time jobs.

 

More than 60% of the global workforce is in countries where there are
recommended or required closures. That is actually down from the ILO's
previous figure because of the resumption of some of the activity that was
curtailed in China.

 

But it still means the ability of many workers to support themselves is
severely curtailed.

 

The report's emphasis on informal workers reflects the fact that they are
especially vulnerable. There is a high level of poverty in the group, they
have little legal protection and the work is often insecure.

 

The ILO says that in the first month of the crisis their income is estimated
to have dropped by 60%.

 

In some regions the impact estimated is much larger: 81% in Africa and the
Americas and 70% in Europe and Central Asia. It has been less severe in the
Asia and the Pacific region though still substantial at more than 20%.

 

'Barely breathing'

The report also says more than 400 million enterprises are at high risk of
serious disruption.

 

They are present in large numbers in industries that have been especially
exposed to the impact of the health crisis: the retail and wholesale trades,
manufacturing, accommodation and food services.

 

The ILO calls for urgent measures to support workers and enterprises,
especially smaller ones. It calls for stronger employment policies and
better-resourced systems of social protection. It also says international
coordination of economic stimulus measures and debt relief will be critical
for a sustainable recovery.

 

The ILO's Director General Guy Ryder said: "For millions of workers, no
income means no food, no security and no future. Millions of businesses
around the world are barely breathing. They have no savings or access to
credit. These are the real faces of the world of work. If we don't help them
now, they will simply perish"--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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