Major International Business Headlines Brief::: 07 August 2020

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Major International Business Headlines Brief::: 07 August 2020

 


 

 


 <mailto:info at bulls.co.zw> 

 


 

 


 

 

ü  Afreximbank commits $400 mln to Mozambique LNG project

ü  S.African regulator working to clarify companies' rights in pandemic
insurance claims

ü  South Africa's MTN to exit Middle East to focus on Africa

ü  Glencore scraps $2.6 billion dividend after first-half loss

ü  Nigeria's Access Bank buys loss-making Zambian Cavmont

ü  Miners need more engineers to meet new tailings dam safety standard

ü  South Africa's Shoprite to close another store in Kenya, 115 jobs to go

ü  Gold Fields sees 300% profit rise on gold rally

ü  Somalia expects to announce winners of first petroleum auction early 2021

ü  TikTok: Trump signs order to address 'threat' of Chinese app

ü  US slaps 10% levy on some Canadian aluminium

ü  Anger rises as British Airways cuts start to bite

ü  Animal Crossing boosts Nintendo sales

ü  Bank of England boss Bailey backs end of furlough scheme

 


 <mailto:info at bulls.co.zw> 

 


 

Afreximbank commits $400 mln to Mozambique LNG project

JOHANNESBURG (Reuters) - Cairo-based African Export-Import Bank has
committed $400 million in loans and guarantees to Mozambique’s $20 billion
liquefied natural gas (LNG) project, the multilateral lender said on
Thursday.

 

Afreximbank’s move follows a similar commitment for the same sum by The
African Development Bank last month.

 

“The ... financing will be used to partially finance ... activities required
to extract natural gas offshore, its transfer to onshore processing
facilities and then its conversion to LNG for export ... around the world,”
the Afreximbank statement said.

 

The Mozambique LNG Area 1 Project is ranked Africa’s single largest foreign
direct investment to date. It will consist of two LNG trains with a total
capacity of around 13 million tons per year.

 

French energy major Total, the operator, has secured a $14.9 billion senior
debt agreement, the biggest project financing Africa has seen.

 

 

 

 

S.African regulator working to clarify companies' rights in pandemic
insurance claims

JOHANNESBURG (Reuters) - South Africa’s financial watchdog is consulting
with lawyers and the insurance industry on a potential test case to clarify
whether insurers should pay rejected claims from firms hit by the impact of
the coronavirus, it told Reuters on Thursday.

 

Several lawsuits have been filed by individual firms, mostly in tourism and
hospitality, after they were told by insurers that their policies did not
cover coronavirus lockdowns.

 

A test case would aim to provide legal certainty in the matter, said
Makgompi Raphasha, head of insurers and retirement fund administrators at
the Financial Sector Conduct Authority (FSCA).

 

“It is too early for the FSCA to say when the case will be heard or when
legal certainty might be achieved,” he said in an emailed response to
questions, adding consultations with various stakeholders needed to conclude
first.

 

Britain’s Financial Conduct Authority (FCA) has already taken a group of
insurers to court as part of its own test case – that could affect 370,000
policyholders – and there have been questions as to whether the FSCA would
take a similar approach.

 

Cases brought by individual firms turn on specific policy wordings, and are
sometimes seen as applying to only one particular insurer or even one
particular claimant.

 

A South African court already found in favour of claimant Cafe Chameleon in
a case against the country’s fourth-largest non-life insurer Guardrisk. But
the insurer is appealing and others say the judgement is not applicable to
their policies.

 

Two other big South African insurers, Old Mutual and Santam, have told
Reuters previously they would be open to participating in a test case if the
FSCA was to launch one.

 

They, as well as others in the sector, have offered either interim relief
payments or settlements for clients, many on the brink of failure, amid
pressure from the FSCA and reputational damage over their stance.

 

 

 

South Africa's MTN to exit Middle East to focus on Africa

JOHANNESBURG (Reuters) - South African mobile operator MTN Group will exit
the Middle East in the medium term, it said on Thursday, starting with the
sale of its 75% stake in MTN Syria, as part of plans to focus on Africa.

 

MTN is in advanced talks to sell the stake in MTN Syria to TeleInvest, which
holds the other 25% of the business, Group President and Chief Executive
Officer Rob Shuter told media on a conference call as the firm reported its
half-year results.

 

Headline earnings per share (HEPS) more than doubled in the first half to
430 cents, beating analyst estimates of 271 cents. Service revenue rose 9.4%
on strong demand for data and financial and digital services during the
coronavirus lockdown.

 

Shuter said MTN had good positioning in its Middle East markets but was “a
very small contributor in a very complex environment”.

 

“We felt we were best served in the medium term to rather focus our energies
in our core African markets that are closer to home,” he said.

 

Among reasons for divesting from the region, he cited losing money on
falling regional currencies, the Middle East’s volatile geopolitics, and
problems with Western sanctions, though he did not mention Iran
specifically.

 

 

MTN’s entry into the region has been marred by allegations, which it has
denied, that it used bribes to win a 15 year operating licence in Iran and
also that it aided militant groups in Afghanistan.

 

The company’s Middle East assets contributed less than 4% to group earnings
before interest, taxes, depreciation, and amortization in the first half
ended June 30.

 

U.S. sanctions have made it harder to repatriate cash from its Iran joint
venture.

 

Shuter said the initial focus will be on leaving Syria, Afghanistan and
Yemen, and that it planned to divest its 49% minority holding in Irancell
over time.

 

Data revenue rose 32.7% in the first half, while digital increased 24.6% and
fintech revenue climbed 18%.

 

MTN has filed with the New York stock exchange to prepare for a secondary
sale of shares in African online retailer Jumia, in which it has a 18.9%
stake, Shuter said.

 

The sale is part of the group’s 25 billion rand ($1.42 billion) divestment
plan aimed at simplifying its portfolio over the next three to five years.

 

MTN is also in advanced talks to sell its 20% shareholding in Belgium’s
Belgacom International Carrier Services SA.

 

($1 = 17.5872 rand)

 

 

 

Glencore scraps $2.6 billion dividend after first-half loss

LONDON (Reuters) - Glencore became the first major mining company to scrap
its dividend, saying on Thursday the economic outlook was too uncertain
because of the coronavirus pandemic and that it would prioritise cutting
debt instead.

 

The mining and commodities trading company said its net debt jumped 12% in
the first six months of the year to $19.7 billion and that it was booking a
$3.2 billion charge, mainly due to the broader economic fallout on its
businesses from the pandemic.

 

While its trading division’s record $2 billion first-half operating profit
helped boost overall adjusted earnings, the hefty charges meant Glencore
ended up posting a net loss of $2.6 billion - the same amount it had been
due to pay in dividends.

 

The record trading performance, mainly thanks to oil markets, came at the
expense of higher net debt as Glencore used more working capital as a
one-off in the exceptional COVID-19 circumstances to buy and store large
amounts of cheap crude.

 

Glencore shares listed in London had slumped nearly 7% by 1130 GMT,
underperforming the 3% drop in the broader index that includes its rivals.

 

“The board has concluded that it would be inappropriate to make a
distribution to shareholders in 2020, instead prioritising the acceleration
of net debt reduction to within our target range,” Chief Executive Ivan
Glasenberg said.

 

He said the company would wait to see how the pandemic evolves and then
review whether to resume dividend payments next year.

 

Rivals Rio Tinto and Anglo American have already gone ahead with their
payouts and BHP is expected to follow suit.

 

“We believe Glencore has missed an opportunity to send a strong message to
the market about its dividend policy being robust through the cycle,” said
analysts at Jefferies, which reiterated its “hold” recommendation for
Glencore shares.

 

The $3.2 billion in charges were mainly related to its oilfields in Chad,
which shut down during the pandemic, its Colombian coal operations, Mopani
copper mine in Zambia and zinc mining in Peru.

 

OLD GUARD ON WAY OUT

Glencore’s adjusted earnings before interest, taxes, depreciation and
amortisation (EBITDA) fell 13% to $4.8 billion in the six months to June
from a year earlier, beating the $4.3 billion expected by 14 analysts in a
survey compiled by Vuma.

 

Thanks to the record first-half trading performance, the company said it
expected the division to post operating profit at the top end of the $2.2
billion to $3.2 billion range by the end of the year.

 

Glencore’s trading divisions set it apart from other mining companies and it
has proved more resilient during commodity downturns.

 

The trading arms of oil majors such as Royal Dutch Shell, Total and Eni have
all also reported bumper profits by storing oil when prices plunged earlier
this year and then selling later at higher prices.

 

Glasenberg told a conference call that cash flow would help it lower debt
below its cap of $16 billion by the end of 2020.

 

“Glencore’s value is attractive, its balance sheet robust and commodity mix
well positioned for recovery,” analysts at UBS said. “We expect it to
outperform as visibility improves on management change, deleveraging,
regulatory investigations and the turnaround of African Copper.”

 

Glasenberg said planning for a new generation of managers to take over had
not been affected by the COVID-19 crisis and that he would leave once the
Glencore old guard was gone.

 

He said long-time executive and head of coal marketing Tor Peterson was
still due to leave the company and another veteran, Daniel Mate, who led its
zinc business, left last month.

 

The change in senior managers that has been taking place over the last two
years has been spurred in part by multiple investigations into the company
for bribery and corruption, particularly by the U.S. Department of Justice.

 

 

 

Nigeria's Access Bank buys loss-making Zambian Cavmont

WINDHOEK (Reuters) - The Zambian subsidiary of Nigeria’s Access Bank has
agreed to buy Cavmont Capital Holdings, the Zambian arm of Namibian
financial services group Capricorn, for a nominal fee of 1 kwacha ($0.0014),
Capricorn said.

 

The Namibian entity owns 98.03% of Cavmont Capital Holdings, which owns 100%
of loss-making Cavmont Bank. Under the terms of the deal, Access Bank Zambia
will acquire the entire issued ordinary share capital, assets and
liabilities of Cavmont Bank.

 

Capricorn said on Thursday it has agreed to reinvest 300 million kwacha into
the new entity as part of the agreement.

 

Cavmont Bank recorded a loss after tax of 19.8 million Namibian dollars
($1.14 million) in 2019, an improvement on a 46.6 million Namibian dollar
loss the previous financial year.

 

“This merger, which will see the combined bank becoming a top 10 bank in
Zambia, will increase our scale and improve our operating leverage by
enabling us to deliver our existing retail and wholesale offerings to a
wider base of customers,” Access Bank Zambia Managing Director Joana
Bannerman said.

 

The transaction is expected to be completed during October 2020, subject to
regulatory approvals from relevant authorities.

 

($1 = 735.0300 kwacha)

 

($1 = 17.4410 Namibian dollars)

 

 <mailto:info at bulls.co.zw> 

 

Miners need more engineers to meet new tailings dam safety standard

JOHANNESBURG/TORONTO (Reuters) - Mining companies need more skilled
engineers if they are to meet strict new global safety standards for
tailings dams aimed at preventing catastrophic failures like those in recent
years that have killed hundreds of people and inundated nearby communities
with mine waste.

 

“Most companies are realizing that there is a skills gap, because you have
senior people moving out and not enough younger people moving in,” said
mining engineering professor Priscilla Nelson, who is setting up a new
tailings program at the Colorado School of Mines.

 

Experts said miners had not placed as much importance on tailings
management, with little prestige attached to the unglamorous work of
trekking to remote mine waste dams, where engineers analyze the consistency
of the slurry and verify the integrity of the structure.

 

In Brazil, more than 250 people died in 2019 when the Vale SA’s Brumadinho
upstream tailings dam collapsed, flooding the nearby community with mine
waste.

 

The disaster, which came not long after another fatal tailings dam collapse
in Brazil, prompted a year-long effort by an industry, investor and U.N.
panel, which launched the global tailings standard on Wednesday.

 

In June, Reuters exclusively reported details of the standard, which the
International Council of Mining and Metals (ICMM) says its members will
adhere to within three to five years depending on tailings dams’ risk
classification. The standard is not binding but the panel expects that
miners will adhere to it.

 

ICMM CEO Tom Butler said members that are “consistently non-compliant” with
the new standard may face expulsion from the organisation.

 

“We want to see every company that has a tailings facility adopt the
standard,” he said.

 

Bruno Oberle, chair of the tailings review panel, said the standard does not
however apply to abandoned tailings dams with no owner.

 

‘LIFTING THEIR GAME’

Tailings dams, some of which tower dozens of meters high and stretch for
several kilometers, are the most common waste-disposal method for miners.

 

 

The industry will struggle to implement the new safety rules without new
training and investment in tailings management and academic courses to feed
a dwindling pipeline of new talent.

 

A submission published with the standard said deep technical know-how is
concentrated among a “relatively small” group of tailings specialists
globally. After that there is a “rapid fall-off” of expertise among
management and other key players, like regulators.

 

“There is a lack of resources within the mining industry to manage
tailings,” said John Howchin, secretary-general of the Council on Ethics of
the Swedish National Pension Funds, which helped craft the standard.

 

Brumadinho showed how devastating a tailings failure could be. Brazilian
state prosecutors have charged Vale’s former CEO with homicide over the
disaster.

 

“Any more failures - no matter whose mine it is - will affect the whole
industry. Everyone has to lift their game,” said Andy Fourie, director of a
new tailings management training program at the University of Western
Australia.

 

BHP and Rio Tinto each contributed 2 million Australian dollars ($1.43
million) to the program, which will offer training for free to their
employees and, for a fee, to other mining companies.

 

Rio Tinto said the new global standard would likely increase demand for
tailings expertise across the industry and said it would “prioritise our
resources to the facilities with the highest consequence classifications.”

 

More than a third of the world’s tailings dams are at high risk of causing
catastrophic damage to nearby communities if they crumble, a Reuters
analysis of company data found last year.

 

Adam Matthews, director of ethics and engagement at the Church of England
pensions board, said on Wednesday companies that don’t take the standard up
will present a “very clear risk” to investors.

 

Angelica Andrade, a Brumadinho community member, gave an emotional tribute
to her sister who died in the disaster.

 

“I don’t care how much it’s going to cost to implement the standard,” she
said. “It is time for the mining sector to stop being all about profits, and
act with humanity.”

 

Environmental NGO Earthworks said the standard does not provide sufficient
safeguards for communities as, among other things, it does not include a
minimum recommended distance between dams and neighbouring communities.

 

 

 

South Africa's Shoprite to close another store in Kenya, 115 jobs to go

JOHANNESBURG (Reuters) - South Africa’s Shoprite Holdings will lay off 115
staff and close another Kenyan store, less than a year after its opening as
part of the supermarket’s expansion into the east African country, a letter
seen by Reuters shows and the company confirmed.

 

In the letter, addressed to the Kenyan Union of Commercial Food and Allied
workers (KUCFAW), Shoprite said it will close its City Mall store in Nyali,
Mombasa.

 

“It is contemplated that the intended date of termination on account of
redundancy will be August 31, 2020,” Shoprite said in the letter dated July
30 and seen by Reuters on Wednesday. It added trading would cease before the
end of August.

 

In an emailed response, Shoprite confirmed the closure and said it was
evaluating all of its operations across Africa “based on current and future
performance”.

 

“It is unfortunate that we have no alternative but to terminate the
employment of the valued employees that have helped to establish this store.
The decision was not taken lightly,” it said.

 

In April, Shoprite closed one of its four stores in Kenya, citing a few
months of “trading in a difficult economic climate”, after the store was
opened last September.

 

The closure of the Nyali store, which opened on Aug. 29 last year, will
leave two in Kenya.

 

Shoprite, owner of supermarket chain Checkers, has been reviewing its
long-term options in Africa as currency devaluations, supply issues and low
consumer spending in Angola, Nigeria and Zambia have reduced earnings.

 

On Monday it said it was considering reducing or selling all of its stake in
its Nigerian subsidiary.

 

It opened its first supermarket in Kenya at Westgate Mall, Nairobi, in
December 2018.

 

The retailer, with stores in 14 African countries, had hoped to take
advantage of disarray in Kenya’s grocery sector after the collapse of Uchumi
Supermarkets and Nakumatt, two of Kenya’s top three retailers, potentially
made way for international chains such as Shoprite and Carrefour.

 

 

 

Gold Fields sees 300% profit rise on gold rally

JOHANNESBURG (Reuters) - South African miner Gold Fields said on Wednesday
booming gold prices could drive up half-year profits by more than 300%,
triggering a 10% rally in its shares.

 

Gold Fields has already said the COVID-19 pandemic would have a limited
negative impact on its performance, even though miners have had to shut
operations during lockdowns and infections among employees.

 

Now, it says it is set to reap hefty gains as an ultra-low interest rate
environment and expectations of more economic stimulus packages to offset
the economic impact of the pandemic have driven gold, its main product, to
record highs.

 

It said its headline earnings per share - the main profit measure in South
Africa - for the six months to June 30, were likely to be between 290% and
310% higher than the $0.05 per share reported last year.

 

“The increase in earnings for the period is driven largely by the increase
in the gold price received,” it said in a trading statement, adding that
attributable gold equivalent production rose only marginally.

 

Gold Fields kept its production guidance for the full-year at the same
level, but said its costs could be higher than previously flagged after
these rose during the first half.

 

 

 

Somalia expects to announce winners of first petroleum auction early 2021

CAPE TOWN (Reuters) - Somalia expects to announce the winners of its first
oil and gas licensing round early next year, as the country seeks petro
dollars to help rebuild its struggling economy, a senior government oil
official said on Wednesday.

 

Battered by violence and an Islamist insurgency since clan warlords
overthrew a dictator in 1991, Somalia is offering seven deep water offshore
blocks in its maiden licensing round in one of the world’s last frontier
markets.

 

The oil and gas auction officially opened on Tuesday.

 

“We are expecting that in the first quarter of next year to finalise and
award the block contracts,” Ibrahim Ali Hussein

 

told Reuters in his first interview with international media since his
appointment last week as the CEO of the Somali Petroleum Authority (SPA).

 

The government had previously mooted offering 15 blocks in this licensing
round but cut this down to seven due to capacity constraints, Hussein, a
former advisor to Somalia’s energy minister, said. Seismic data previously
indicated the 15 blocks could contain around 30 billion barrels of oil.

 

He said the coronavirus pandemic had delayed talks between the government
and a joint venture of legacy rights holders Shell and Exxon Mobil to
convert their existing concession into a production sharing agreement (PSA).

 

“If there was not coronavirus, the roadmap that we agreed ... was to get the
contract back before the end of this year, December,” he said.

 

Converting the concession into a PSA would also help end a force majeure by
the oil majors that has been in place since 1990, Hussein said. Shell and
Exxon hold exclusive petroleum exploration and production rights over five
shallow water offshore blocks.

 

“We have an ongoing and constructive dialogue with the Somali authorities
about a roadmap potentially to convert the existing concession to a
production sharing agreement,” a Shell spokesman said.

 

No-one at Exxon was immediately available to comment.

 

 <mailto:info at bulls.co.zw> 

 

TikTok: Trump signs order to address 'threat' of Chinese app

US President Donald Trump has signed an executive order to ban transactions
with TikTok's parent company ByteDance.

 

The executive order says the US "must take aggressive action against the
owners of TikTok to protect our national security".

 

Under the order, beginning in 45 days, any US transaction with ByteDance
will be prohibited.

 

TikTok denies accusations it is controlled by or shares data with the
Chinese government.

 

On Thursday night, he issued a follow-up executive order taking similar
action to ban WeChat, an app owned by China-based tech giant Tencent.

 

What did Trump say?

In both executive orders, he says he has found "additional steps must be
taken to deal with the national emergency with respect to the information
and communications technology and services supply chain".

 

He adds: "The spread in the United States of mobile applications developed
and owned by companies in the People's Republic of China (China) continues
to threaten the national security, foreign policy, and economy of the United
States."

 

He refers to both apps as a "threat".

 

Mr Trump said TikTok's data collection could allow China to track US
government employees and gather personal information for blackmail, or to
carry out corporate espionage.

 

He noted that reports indicate TikTok censors content deemed politically
sensitive, such as protests in Hong Kong and Beijing's treatment of the
Uighurs, a Muslim minority. 

 

The US president said the Department of Homeland Security, the
Transportation Security Administration (which oversees US airport screening)
and the US Armed Forces have already banned TikTok on government phones. 

 

What is TikTok?

The fast-growing app - which has up to 80 million active monthly users in
America - has exploded in popularity in recent years, mostly with people
under 20.

 

They use the app to share 15-second videos that often involve lip-synching
to songs, comedy routines and unusual editing tricks.

 

These videos are then made available to both followers and strangers. By
default, all accounts are public, although users can restrict uploads to an
approved list of contacts.

 

TikTok also allows private messages to be sent but this facility is limited
to "friends".

 

The app is reported to have around 800 million active monthly users, with
its biggest markets having grown in the US and India.

 

Though as Mr Trump notes in his executive order, India has already blocked
TikTok, as well as other Chinese apps.

 

Australia, which has already banned Huawei and telecom equipment-maker ZTE,
is also considering banning TikTok.--BBC

 

 

 

 

US slaps 10% levy on some Canadian aluminium

US President Donald Trump has reimposed a 10% tariff on some Canadian
aluminium products, saying it was done to protect US industry.

 

Canada and the US reached a deal last year to lift tariffs on steel and
aluminium imports that had been imposed on grounds of "national security".

 

The US had imposed a 25% tax on steel and 10% on aluminium on Canada in
2018.

 

Prime Minister Justin Trudeau recently said he believes a new levy would
have "no justification".

 

Speaking in Ohio on Thursday, Mr Trump said the tariffs were necessary to
defend the US aluminium industry because Canadian producers had broken their
commitment to stop flooding the US market with a cheaper product.

 

The step was "absolutely necessary to defend our aluminium industry," he
said.

 

As part of a 2019 agreement lifting the measures, the US and Canada said
they would monitor imports and, if a country is determined to be buying in
too much, one of the other nations could request a consultation and
potentially reimpose tariffs.

 

A 10% tariff on imports of "non-alloyed unwrought aluminium from Canada" was
imposed on Thursday.

 

What does the US say? 

In a statement on Mr Trump's presidential proclamation, the office of the
United States Trade Representative said that "imports from Canada of the
product that accounts for the largest share of Canada's aluminium exports to
the United States have surged above historical levels".

 

What has Donald Trump actually achieved on trade?

What Trump wants from global trade

The surge has only intensified in recent months, despite a drop in US
demand, according to the statement.

 

Canada was exempted from the tariffs in 2019 "on the basis of an agreement
that imports of steel and aluminium products from Canada would remain at
historical levels".

 

What's the reaction? 

The US Chamber of Commerce is warning that a decision to bring back the
tariffs could raise costs for US manufacturers.

 

Myron Brilliant, head of international affairs for the industry group, told
Reuters the move was "a step in the wrong direction" and that the measures
are opposed by US aluminium manufacturers.

 

In late June, a group of 15 aluminium executives sent a letter to US Trade
Representative Robert Lighthizer calling for continued tariff exemptions for
aluminium in North America.

 

They said they had government data discounting a "surge", and argued that
current import levels are largely consistent with historical trends.

 

Canada's deputy Prime Minister Chrystia Freeland called the measures
"unwarranted and unacceptable" and denied Canadian aluminium undermined US
national security.

 

She said in a statement that Canada "will always stand up for our aluminium
workers" and the country plans to "swiftly impose dollar-for-dollar
countermeasures".

 

Canada's Chamber of Commerce said the "tariffs were the wrong instrument
when they were first imposed in 2018, and they remain the wrong instrument
now". 

 

National Foreign Trade Council, a US-based pro-trade group, called imposing
the new measures a "misguided action", warning it could undermine the new
free trade agreement between the US, Canada and Mexico, which came into
force in July.   

 

But Michael Bless, chief executive of Century Aluminum, said the move "helps
to secure continued domestic production of this vital strategic material and
level the playing field for thousands of American aluminium workers",
according to Reuters.--BBC

 

 

 

 

Anger rises as British Airways cuts start to bite

It has been dubbed 'Black Friday' by unions.

 

Thousands of long-serving cabin crew at British Airways are expected to find
out on Friday whether or not they will be made redundant.

 

Many of those who remain will suffer steep pay cuts, and significant changes
to their terms and conditions.

 

Other workers such as engineers, ground crew and office staff are also
expected to hear whether they have a future at the airline over the coming
days.

 

More than 6,000 staff across the business have already applied for voluntary
redundancy, unions say.

 

British Airways has begun culling employee positions as part of a major
cost-cutting drive, which it insists is vital to ensure its long-term
survival.

 

But the way in which it has done so has provoked deep resentment among a
large proportion of its workforce - and threats of industrial action.

 

'Absolutely gutted'

"I'm looking at losing 50% of my take-home pay", says Vicky - a cabin crew
member who works in BA's long-haul fleet.

 

"I'm a single mother. I can't afford to have half of my pay taken away from
me".

 

Vicky - not her real name - is in her mid-thirties. She has been with the
company for more than 15 years.

 

Although she lives in the north east, she was among hundreds of staff who
travelled to BA's headquarters near Heathrow earlier this week, to vent
their anger at the company's management.

 

"It's the most stressful time I've ever been through", she says. "I feel
absolutely gutted".

 

BA cabin crew: I won't earn enough to pay my mortgage

Job cuts plan

British Airways, like other airlines, has suffered deeply from the impact of
the coronavirus pandemic. In the three months to the end of June it lost
more than £700m.

 

For weeks, at the height of the lockdown, the bulk of its fleet was
grounded, and it was unable to operate more than a handful of planes each
day.

 

The company does not expect the aviation industry to recover fully until at
least 2023.

 

In April, its parent company International Airlines Group (IAG) announced
plans for a major restructuring of BA's business, which it said could result
in up to 12,000 redundancies.

 

BA then made it clear it needed to cut costs dramatically - and warned that
concessions would be needed from remaining staff on pay, as well as on terms
and conditions.

 

It said that if an agreement could not be reached with unions, it would
force its plans through - by handing staff their notice, and offering them
new contracts on different terms.

 

'Ultimatum'

Unions have condemned this policy as "fire and rehire".

 

It has also been heavily criticised by many MPs, with the chair of the
transport select committee, Conservative Huw Merriman, describing it as "the
equivalent of putting a gun to someone's head".

 

Despite significant tensions between the two sides, the pilots' union Balpa
has since managed to reach an agreement with BA, which reduced the number of
possible redundancies in exchange for significant concessions on pay.

 

But relations between the company and unions representing other staff -
Unite and GMB - have been considerably more strained. No deal has yet been
done, and BA has pushed forward with its plans.

 

Those plans have major implications for BA's cabin crew.

 

The company currently has different crew divisions, or 'fleets', which
operate as separate units with their own terms and conditions.

 

It wants to create a single organisation, and put all crew on the same type
of contract.

 

For lower paid staff, principally those who have joined the company since
2010, this would mean a modest salary increase.

 

For longer serving crew, who are well-paid by industry standards, it would
mean a cut in basic salary of 20%. But because they will also lose other
allowances, many say they will see their overall take-home wages drop by 40%
to 50%.

 

Executives insist such changes are necessary, in the face of what IAG's
chief executive Willie Walsh described last week as the biggest crisis the
airline has ever faced.

 

Mr Walsh told the BBC: "Anyone who believes that this is just a temporary
downturn and therefore can be fixed with temporary measures, I'm afraid
seriously misjudges what the industry is going through."

 

But many employees believe the company is deliberately exploiting the
immediate crisis to justify pushing through far-reaching, irreversible
changes.

 

"I really love my job", says Vicky

 

"I'm just really upset with how things have planned out. I think it's a
permanent solution to a temporary problem. Yet our managers are only taking
temporary pay cuts."

 

British Airways: A breakdown in trust?

Staff elsewhere in British Airways are also affected by the changes, with
the threat of compulsory redundancy hanging over them and the prospect of
steep pay cuts ahead.

 

John - again, not his real name - is an engineer who helps maintain BA's
long-haul aircraft at Heathrow.

 

He wants to stay in his job, because he is worried his qualifications would
not be recognised in other industries and he would struggle to find an
employer willing to take him on.

 

"Let's be realistic", he says, "No-one is going to take someone in their 50s
and train them up when they can get a 20-something instead. It's not going
to happen."

 

John says many of his colleagues are in a similar position - and the worry
is proving an unwelcome distraction at work.

 

"I've been walking around checking an aircraft prior to departure, and I
find I can't remember what I've been looking at - so I have to do it again",
he says.

 

"I can't see how you can be expected to work like that. But this process is
being driven by accountants, and they can't see further than their noses".

 

Like many other BA staff I have spoken to, John believes the company's
response to the crisis has proved catastrophic for morale - at a company
once widely admired for the fierce loyalty and enthusiasm of its staff.

 

"I think this will do the airline a lot of harm" he says. "I can't see how
they get out of it".

 

Although BA is still in talks with unions, relations are far from cordial.

 

Last week the general secretary of Unite, Len McCluskey described the
company's strategy as "despicable", and said the union was working towards
industrial action with immediate effect.

 

But the airline insists it has no option.

 

"Many airlines have already made thousands of staff redundant" said a
spokesperson. "We are not immune to this crisis. We have to adapt to
survive.

 

"So we will continue with the proper, lawful consultative process and we
will keep inviting union representatives to discuss our proposals


 

"It is not too late to find solutions - as we have done with Balpa - and to
protect jobs".--BBC

 

 

 

Animal Crossing boosts Nintendo sales

More than 22 million copies of the latest Animal Crossing video game have
been sold since its March release as the pandemic drives a gaming surge.

 

Developer Nintendo said the title's popularity lifted profits from April to
June to 106.4bn yen (£770m) - more than five times higher than a year ago.

 

Sales show "no loss of momentum", and other games are also seeing strong
demand, the Japanese firm added.

 

Animal Crossing's success also boosted sales of its Switch gaming device.

 

Nintendo said it sold 5.7 million Switch units in the quarter, up from 2.1
million a year ago. More than half of the consoles played for the first time
in the quarter were used for Animal Crossing, it added.

 

The gains came despite lockdown-related production strains - Nintendo said
it had difficulty getting parts.

 

The company said those issues have eased, although a lag between production
and delivery means shortages continue in many regions.

 

"We work hard to be able to deliver these products to consumers as quickly
as possible," Nintendo said.

 

Virtual island

The original Animal Crossing was released in 2001.

 

The latest title, Animal Crossing: New Horizon - in which players share an
island with anthropomorphic creatures and complete tasks to earn money - has
been a runaway success during the pandemic, drawing in people looking for
escape and alternative ways to socialise.

 

 

Nintendo said the 10.6 million Animal Crossing: New Horizons games sold in
the quarter outstripped other Nintendo games sales by a factor of 10.

 

In overall sales, it trails only the firm's Mario Kart 8 Deluxe, which has
sold more than 26 million copies since its release in 2017.

 

Overall Nintendo sales were 358.1bn yen in the quarter, more than double
last year. Profits reached 106.4bn yen, compared with 16.6bn yen last year.

 

"The numbers are insane," industry analyst Serkan Toto of Kantan Games said
on Twitter.

 

But Nintendo has said the gaming boom is likely to fade as lockdowns ease.

 

It did not change its full-year forecast for 200bn yen in profits, which
would be a decline from the 259bn yen it earned in its last financial
year.--BBC

 

 

 

Bank of England boss Bailey backs end of furlough scheme

The Governor of the Bank of England has backed the government's decision to
end its furlough scheme in October.

 

Andrew Bailey told the BBC it was important that policymakers helped workers
"move forward" and not keep them in unproductive jobs.

 

He said coronavirus would inevitably mean that some jobs became redundant.

 

The Bank also predicted the economic slump caused by Covid-19 will be less
severe than expected, but warned the recovery will also take longer.

 

More than nine million jobs have been furloughed under the government's job
retention scheme, but the Bank expects most people to go back to work as the
economy recovers.

 

Trade unions have urged Chancellor Rishi Sunak to extend the scheme, which
pays a share of workers' wages, to avoid mass job losses.

 

However, Mr Bailey said it was right to focus on helping people to find new
jobs.

 

"It's been a very successful scheme, but he's right to say we have to look
forward now," he said. "I don't think we should be locking the economy down
in a state that it pre-existed in."

 

The Bank said a faster easing of lockdown measures and a "more rapid"
pick-up in consumer spending had helped the economy rebound faster than it
had assumed in May.

 

Its latest Monetary Policy Report showed spending on clothing and household
goods were back to pre-Covid levels.

 

However, the Bank warned of a "material" rise in unemployment this year as
it held interest rates at 0.1%.

 

Mr Bailey said recent data suggested the recovery in consumer spending was
gaining traction, while spending on food and energy bills remained above
pre-Covid levels.

 

He said: "We have had a strong recovery in the last few months. The pace
puts the economy ahead of where we thought it would be in May."

 

However, Mr Bailey cautioned against reading too much into recent figures:
"We don't think the recent past is necessarily a good guide to the immediate
future," he said.

 

The Bank said spending on leisure and entertainment, which accounts for a
fifth of all consumer spending, remained subdued.

 

Business investment was also weak, which would weigh on the recovery.

 

Slower recovery

The Bank expects the UK economy to shrink by 9.5% this year.

 

While this would be the biggest annual decline in 100 years, it is not as
steep as its initial estimate of a 14% contraction.

 

The Bank said the UK still faced its sharpest recession on record, with the
outlook for growth now "unusually uncertain".

 

Mr Bailey said it was the "largest quantum of uncertainty in a forecast"
that policymakers had ever published.

 

The Bank expects the UK economy to grow by 9% in 2021, and 3.5% in 2022,
with the economy forecast to get back to its pre-Covid size at the end of
2021.

 

This compares with growth estimates of 15% and 3% respectively, in a
scenario the Bank set out in May.

 

Unemployment is expected to almost double from the current rate of 3.9% to
7.5% by the end of the year as government-funded support schemes come to an
end.

 

Average earnings are also expected to shrink for the first time since the
financial crisis.

 

The Bank said more workers faced a pay cut or freeze in 2020, adding: "In
many cases, bonuses have been scaled back or withdrawn altogether for this
year."

 

Its latest forecasts are based on the assumption that there is no second
wave of the virus and that there is a smooth transition to a new EU free
trade agreement at the start of 2021.

 

Meanwhile, a fall in energy prices and the temporary VAT cut for hotels,
theme parks and other hospitality businesses means the cost of living is
expected to barely rise this year.

 

The Bank expects inflation, as measured by the consumer prices index (CPI),
to fall close to zero by the end of 2020, before gradually rising back to
its target of 2%.

 

Negative rates 'under review'

The Monetary Policy Committee (MPC) said it would not even think about
raising interest rates until there was "clear evidence" the recovery had
taken hold.

 

Mr Bailey also signalled that policymakers were against using negative
interest rates any time soon, adding that such a move may have unintended
consequences.

 

It could stop the UK's already fragile banks from lending, or lead to
customers withdrawing their money and holding it in cash.

 

Policymakers also noted that High Street banks would find it difficult to
cut savings rates below zero.

 

"They are part of our toolbox," said Mr Bailey. "But at the moment we do not
have a plan to use them."

 

He said the public may find the policy difficult to understand. "There would
be a lot of explaining to do on what this means, why we're doing it, and
what the benefits would be."

 

Ruth Gregory, an economist at Capital Economics, said the Bank was likely to
increase its money printing programme by a further £100bn later this year.

 

She also expects the Bank to keep interest rates at 0.1% "or below" for "at
least five years".

 

Are banks passing rate cuts on?

Millions of households that already had a variable-rate mortgage have
benefitted from recent interest rate cuts.

 

However, the Bank said borrowing had become more expensive over the past six
months for first-time buyers and others moving up the property ladder,
particularly for people with small deposits.

 

Banks also continued to reduce rates on savings accounts. The average
instant-access savings account now pays 0.1% annual interest, compared with
0.4% in February.

 

Lenders said they were restricting credit due to the uncertain economic
outlook.

 

One in six mortgages in the UK is currently subject to a payment holiday
because of the pandemic.

 

Virus is 'worst shock' in company's 49-year history

Stuart Paver, the managing director of Pavers Shoes says the pandemic is the
"worst shock" the company's suffered since it was founded by his mother in
1971.

 

The company which has always been profitable, has now lost £7m over the past
five months.

 

"We went from having 170 stores to no stores, and 1500, 1600 people on
furlough", he says.

 

"It's about survival and how you come through and how you have a business
that can continue to employ as many people as possible, so it was really
batten down the hatches ..and really just sort of work hard to make sure we
were secure".

 

The company is now gradually reducing the number of furloughed workers and
turnover in the stores is picking up, but Stuart Paver says it's still down
40% from last year. Normally in a recession, he'd expect to lose between 5
and 8% of his turnover.

 

Mr Paver thinks recovery for businesses like his depends on consumer
confidence.

 

"There's still a lot of people that won't venture into town.. we just need
those people to become confident and come back in".--BBC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 


 


 

 


 

INVESTORS DIARY 2020

 


Company

Event

Venue

Date & Time

 


Zimbabwe

National Heroes Day

Zimbabwe

10  August 2020

 


Zimbabwe

Defence Forces’ Day

Zimbabwe

11  August 2020

 


Old Mutual Zimbabwe

AGM

virtual

12  August 2020 | 3pm

 


CBZ

AGM

Virtual

14  August 2020 | 6pm

 


Lafarge

AGM

Virtual

18 August 2020  | 12pm

 


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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