Major International Business Headlines Brief::: 13 August 2020

Thu Aug 13 06:12:54 CAT 2020

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Major International Business Headlines Brief::: 13 August 2020

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ü  S.Africa's economic woes bigger than monetary policy -cenbank governor

ü  S.African bank Absa's warns of steep drop in half-year profits

ü  Kenya's KCB Group H1 after-tax profit plummets 40% due to COVID-19

ü  African e-commerce group Jumia takes lockdown revenue hit

ü  South African business confidence recovers from 35-year low

ü  Ghana expects 5.8% increase in cocoa output in 2020/2021

ü  Ghana's inflation rises to 11.4% in July

ü  Gold slumps below $1,900 as U.S. dollar, yields rise

ü  US holds off on threatened tariff hike in EU Airbus fight

ü  First-time buyers: Four ways the property market 'will be tougher'

ü  UK economy: The recession-pandemic double whammy

ü  The millions being made from cardboard theft

ü  Sports Direct owner Frasers delays annual accounts again

ü  Boris Johnson warns 'long, long way to go' for UK economy

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S.Africa's economic woes bigger than monetary policy -cenbank governor

JOHANNESBURG (Reuters) - Formally adding unemployment or economic growth to the South African central bank’s mandate would risk policy mistakes and hurting its credibility, Governor Lesetja Kganyago said on Wednesday.

The Reserve Bank (SARB) has long been under pressure to take more drastic measures to revive growth in Africa’s most advanced economy, with calls for the bank to slash lending rates and finance government through quantitative easing (QE).

The bank has cut rates by 300 basis points in 2020 to a record-low 3.50%.

And in March it launched a bond-buying program, purchasing government debt in the secondary market to ease a liquidity collapse in the capital markets prompted by the COVID-19 pandemic.

But with the economy, already in recession before the coronavirus and set to contract by more than 7% this year, and the government budget nearing double-digits deficit, labour and some politicians have called for more drastic action, including a widening of the bank’s mandate.

“The problem is that formally adding an extra mandate, in the context of our propensity to stagflation, could encourage policy mistakes and weaken credibility,” Kganyago said in a speech broadcast virtually by the University of Pretoria.

“While we would all like South Africa to reach permanently high growth, this is beyond the powers of a central bank,” Kganyago said, adding the bank would stick to inflation-targeting policy.

“We are in very difficult circumstances, but QE isn’t the answer. We need to focus on real solutions.”

S.African bank Absa's warns of steep drop in half-year profits

JOHANNESBURG (Reuters) - South African lender Absa said on Wednesday its half-year earnings could be almost wiped out as a steep rise in bad loans dented its performance.

The bank, previously owned by Barclays, said first-half headline earnings per share were expected to decline by between 92% and 97% from the comparative period’s 920 cents ($0.5286).

“Credit impairments were four times higher,” Absa said, adding it expected bad debts to fall significantly in the second half of the year.

“The Covid-19 pandemic, national lockdowns and weak economy during the first half had a material impact on customer loan and transaction volumes, while significantly lower policy rates reduced our net interest margin,” it said.

Its balance sheet, however, remained resilient, it said.

Its shares, which had finished trading for the day when the statement was released, closed 0.94% lower on Wednesday.

($1 = 17.3985 rand)

($1 = 17.4051 rand)

Kenya's KCB Group H1 after-tax profit plummets 40% due to COVID-19

NAIROBI (Reuters) - Kenya’s KCB Group said on Wednesday its after-tax profit plummeted in the first half, hit by the effects of the novel coronavirus pandemic, and that it expected strained business conditions for the rest of the year.

The bank, Kenya’s biggest lender by assets, said its after-tax profit fell 40% to 7.6 billion shillings ($70.1 million), while pretax profit also slid 28% to 12.82 billion shillings.

“The second quarter was the toughest in our recent history as the pandemic hurt economic activity across markets,” Chief Executive Joshua Oigara said in a statement.

Oigara said the bank expected the rest of the year to be challenging.

“We project a continued strain on the business and economy in the remaining part of the year as the COVID-19 pandemic evolves,” he said.

“We will accelerate our support to customers, roll out cost management initiatives and seek avenues to boost efficiency though digitisation to cushion the business from emerging pressures.”

The bank said it had set aside 11 billion shillings in provisions for loan losses in the first half, up from 3 billion a year earlier, due to the expected impact of the pandemic.

Thursday’s results are the first to fully capture the effects of the COVID-19 pandemic on the bank’s performance.

KCB, which also operates in Rwanda, Burundi, Tanzania, Uganda and South Sudan, said its net interest income rose 22% to 31.1 billion shillings, while net loans and advances rose 17% to 559.9 billion shillings.

During the first half it restructured 101 billion shillings in facilities to cushion customers against the effects of the COVID-19 crisis, it said.

It said its ratio of non-performing loans to total loans rose to 13.7% from 7.8% a year before, mainly due to the consolidation of NBK - which it acquired last year - and increased defaults due to the pandemic.

($1 = 108.3500 Kenyan shillings)

African e-commerce group Jumia takes lockdown revenue hit

LAGOS (Reuters) - African e-commerce group Jumia’s revenues slid by 10% in the second quarter, dashing hopes that lockdowns aimed at stemming the spread of the new coronavirus would lead to a flood of online orders.

Still, the loss-making company highlighted an 8% rise in orders and ongoing cost cuts that its co-CEO said pointed to a path to profitability.

Jeremy Hodara, the company’s co-CEO, told Reuters that the 26% drop in Jumia’s adjusted loss before interest, tax, depreciation and amortisation, a rise in gross profits per order, and higher orders of fast-moving consumer goods, showed the company was on the right track, despite coronavirus disruptions.

“We committed that we are going to show significant progress on our path to profitability. And that’s what we did,” Hodara said.

Jumia was the first Africa-focused tech start-up to list on the New York Stock Exchange and reached a market capitalisation of over $1.5 billion just after it went public in April 2019.

Revenue for the quarter fell to 34.9 million euros ($41.1 million). The company said while there were surges in demand in markets that went into total lockdown, this only happened in 24% of its adjustable market.

Softer restrictions elsewhere led to “less drastic changes in consumer behaviour”, Sacha Poignonnec, one of Jumia’s founders and its co-CEO, said, while the company also lost revenue due to logistical problems and closed borders.

“Things went back to normal sometime in (the second quarter),” Poignonnec said.

Jumia’s shares fell some 20% by 1628 GMT, to $12.76 per share.

Its share price on Wednesday was roughly 70% below last year’s peak, though it rose above $19 last week from a low of $2.33 in March.

The company also said it would pay $5 million to settle class action lawsuits alleging misstatements and omissions related to its initial public offering.

($1 = 0.8495 euros)

South African business confidence recovers from 35-year low

JOHANNESBURG (Reuters) - South African business confidence recovered from a 35-year low in July, boosted by improving global economic activity, but the measure remained well-below average, over worries about the slow re-openinng of the economy and soaring local infections.

On Wednesday the South African Chamber of Commerce and Industry’s (SACCI) monthly business confidence index (BCI) rose to 82.8 in July from 81.4 in June.

The sentiment gauge had crashed to 70.1 in May, its lowest since the inception of the survey in 1985, and below last year’s average of 92.6.

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Ghana expects 5.8% increase in cocoa output in 2020/2021

ACCRA (Reuters) - Ghana expects cocoa output of around 900,000 tonnes in the 2020/2021 season, up 5.8% from the forecast for 2019/2020, the country’s Cocoa Board (COCOBOD) said, according to a parliamentary report published on Wednesday.

Ghana is the world’s second-biggest cocoa producer. Its growing season runs from October to September.

The report also said the COCOBOD planned to raise $1.3 billion in syndicated loans to fund cocoa purchases during 2020/21 from a consortium of banks and financial institutions, with the government as guarantor.

The loan will carry annual interest of one month Libor plus 1.75%, a commitment fee of 0.62% per year and an upfront flat fee of 1.25%.

Ghana's inflation rises to 11.4% in July

ACCRA (Reuters) - Ghana’s consumer price inflation rose to 11.4% year-on-year in July from 11.2% the previous month, driven by higher food and transport prices, the West African nation’s statistics office said on Wednesday.

Ghana’s inflation has risen in recent months above the central bank’s targeted range of 8%, plus or minus 2 percentage points due to the impact of the novel coronavirus outbreak that has hit the cocoa, gold and oil-dependent economy.

Food price inflation continued to dominate during the month, Samuel Annim, head of the statistics service told a news conference, adding food inflation stood at 13.7% compared with 9.7% for non-food inflation.

Ghana’s Central Bank’s Governor Ernest Addison said last month that he expected inflation to return to the bank’s medium-term target band by the second quarter of 2021, provided adequate fiscal measures were taken to cushion the impact of the pandemic.

Gold slumps below $1,900 as U.S. dollar, yields rise

(Reuters) - Gold dropped more than 2% to break below the key $1,900 per ounce level on Wednesday as a resurgent dollar forced bullion investors to reassess their positions after a record-breaking price rally.

Spot gold fell as much as 2.5% to a near three-week low of $1,863.67, resuming its free fall after a brief hiatus in early trade. It was down 1.6% to $1,881.55 by 0540 GMT, extending losses after a 6% plunge on Tuesday.

U.S. gold futures slid 2.8% to $1,892.

Prices of silver tumbled 3.3% to $23.96 per ounce after slumping 15% in the previous session.

“It looks like some of the euphoria is coming out of the gold market,” with a test of support around $1,800 now looking possible, IG Markets analyst Kyle Rodda said.

“A lot hinges on U.S. yields and the factors driving them at the moment. Also, dollar’s strength will be something very important to watch over the next few days and weeks.”

A jump in U.S. Treasury yields helped the dollar extend its winning streak, making gold more expensive for those holding other currencies. Higher yields also increase the opportunity cost of holding non-yielding gold. [USD/] [US/]

Gold suffered its biggest one-day drop in more than seven years on Tuesday as equities surged and the dollar firmed. However, growing uncertainty about a U.S. stimulus deal weighed on Asian stocks on Wednesday.

Bullion’s gains for the year now stood at about 25%, as investors buy the metal as a hedge against a coronavirus-driven slowdown and fears of currency debasement as central banks flood the economy with money to ease the blow.

With central bank policies likely to remain “loose for the foreseeable future,” gold could move back towards $2,000, said ING analyst Warren Patterson.

Platinum eased 0.3% to $927.60, while palladium rose 1.1% to $2,113.49.

US holds off on threatened tariff hike in EU Airbus fight

The US has said it will hold off an a threatened hike in tariffs on $7.5bn (£5.75bn) worth of European and UK goods that it imposed as punishment for subsidies for plane-maker Airbus.

The move comes as the two sides wrestle to put to an end their 16-year trade battle over state aid for Airbus and American rival Boeing.

The US last year raised border taxes on more than 100 items, including jumpers, single-malt whiskies and cheese.

It has said the EU has not done enough.

"The EU and member states have not taken the actions necessary to come into compliance with WTO decisions," America's top trade official, Robert Lighthizer, said on Wednesday. "The United States, however, is committed to obtaining a long-term resolution to this dispute.

The European Union cautiously welcomed the US decision not to increase the amount of goods subject to tariffs.

"The Commission acknowledges the decision of the US not to exacerbate the ongoing aircraft dispute by increasing tariffs on European products," an EU spokesperson said.

Airbus last month said it would alter some deals responsible for the dispute, saying the changes, including increasing its interest rates on loans with France and Spain, eliminated "any justification" for the US border taxes.

The move prompted EU officials to call for an end to "unjustified" tariffs. Many American businesses have also protested the duties, which raise prices for American buyers.

On Wednesday Airbus spokesman Clay McConnell said in a statement the company "profoundly regrets that, despite Europe's recent actions to achieve full compliance, USTR [US Trade Representative] has decided to maintain tariffs on Airbus aircraft - especially at a time when aviation and other sectors are going through an unprecedented crisis."

When did the tariffs start?

The US announced tariffs on $7.5bn worth of goods last year after the World Trade Organization ruled that state aid provided to Airbus to launch its A380 and A350 jets was illegal and authorised American retaliation.

In February, the US raised the rates being charged on aircraft from 10% to 15%, leaving the 25% duty on other items unchanged.

This summer, American officials again threatened to raise tariff rates or make new items subject to the import tax.

The items threatened with new duties included salmon fillets, gin and olives.

The US is required by law to review the tariffs periodically. On Wednesday it announced minor tweaks to the list, for example, removing sweet biscuits made in the UK and adding jams from France and Germany.

Trade lawyer Jamieson Greer, former chief of staff to US Trade Representative Robert Lighthizer, told the BBC: "The reality is that this can all be solved if Airbus took some action to provide restitution".

More tariffs ahead?

The European Union, which brought its own case challenging American subsidies for Boeing, has threatened to hit the US with tariffs of its own. It is waiting for the World Trade Organization to decide how big such a punishment might be.

The US in May said it had eliminated the benefits in dispute. That WTO ruling is expected later this year.

"In the absence of a settlement, the EU will be ready to fully avail itself of its own sanction rights," Trade Commissioner Phil Hogan said last month.

The issue has also complicated trade talks between the US and the UK.

UK Trade Secretary Liz Truss raised the matter in talks with Mr Lighthizer this month, as the two sides held a third round of negotiations.

The secretary "was clear that the UK considers these tariffs to be unacceptable and continued to push for their immediate removal," the Department for International Trade said.--BBC

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First-time buyers: Four ways the property market 'will be tougher'

Official forecasts predict a fall in UK house prices with the economy in recession and jobs being lost.

First-time buyers may be rejoicing about the prospect of cheaper property.

Yet a report by the Resolution Foundation suggests home ownership could become increasingly "out of reach" for this group of people.

It comes as a survey of agents predicts a medium-term downturn in the housing market, following a short-lived boom after lockdown.

Will house prices fall?

The coronavirus crisis has led to people losing their jobs, incomes being hit, and the economy slumping.

Reopening the housing market and government support has led to a short-term rise in house prices and demand for property.

This will not last, commentators say, and over the coming months, house prices will inevitably fall on average, according to the government's official forecaster, the Office for Budget Responsibility.

It has predicted falls of anything between 2% this year, to 22% by the later half of next year.

Its central forecast is an 11% fall by the end of 2021 and flatlining thereafter.

Good or bad news for first-time buyers?

Usually, first-time buyers would see house price falls as a chance for property to become more affordable.

Some young people in stable jobs, with savings, and who have had the chance to put more aside in lockdown will benefit, the Resolution Foundation's Housing Outlook report says.

Yet, the typical first-time buyer faces four major obstacles, it suggests:

·         Lenders will be asking for a larger deposit. The typical first-time buyer family, aged around 30 and putting aside 5% of their income, will need to save for more than 20 years to pay for it. A long-term financial downturn would mean mortgage lenders will need to protect themselves against borrowers being unable to repay, so would require a larger deposit upfront

·         Saving has just got tougher. More than half of renters aged between 25 and 34 do not have savings. Others have either had to cut or dip into savings during lockdown owing, in part, to lower incomes

·         The government's stamp duty holiday in England and Northern Ireland does not help. Before the current stamp duty holiday, many first-time buyers did not buy a home expensive enough to be charged stamp duty. They may also have had some advantage over movers, as the starting point was more favourable to first-time buyers. That advantage has disappeared for the time-being

·         Moving for a job may be expensive. With jobs being lost, young workers may find they need to relocate. Extra travel could hit savings, while moving to a city for work is likely to mean higher housing costs

·         "Although prices are projected to fall - perhaps dramatically - in the wake of the pandemic-induced recession, this drop won't make things any easier for typical young first-time buyers looking to purchase their first home," said the report's co-author Lindsay Judge.

"The current crisis looks set to deepen pre-existing inequalities and the growing divide between those who are able to look forward to home ownership, and those for whom this dream is increasingly out of reach."

Boom and bust?

The Resolution Foundation has called for targeted government support for first-time buyers to support their incomes, or give them some kind of advantage over homeowners and landlords when trying to buy a property.

A separate survey of agents by the Royal Institution of Chartered Surveyors (RICS) said that July saw a rise in housing demand and sales across he UK, helped by the stamp duty holiday.

There has also been greater demand from tenants.

However, some surveyors say as government support for workers is withdrawn, then the trend could reverse.

"Significantly, some contributors are now even referencing the possibility of a boom followed by a bust," said Simon Rubinsohn, chief economist at Rics.

"I can't increase my offer any more without help from Mum and Dad."

Cordelia Clark's first home felt within reach. The 27-year-old was about to scramble on to the housing ladder, but then a twist appeared.

One of the UK's biggest mortgage lenders, Nationwide, altered the rules.

There is now a tighter limit on how much your family can help you when you are getting your deposit together. The bank of mum and dad - as it is often known.--BBC

UK economy: The recession-pandemic double whammy

There is anecdotal evidence that 'eat out to help out' is helping High Street footfall.

The latest economic output figures show we are in a recession like no other - a consequence of having to shut the economy down, resulting in an unprecedented hit.

The hope is that it proves to be short-lived, indeed that it is already over.

Chancellor Rishi Sunak says he has never denied that the global pandemic meant "hard times". But questions do arise about why the UK is at the wrong end of international comparisons of both the economic hit and above average deaths during the pandemic.

The half-year hit is on course to be confirmed as the worst in the G7. The second quarter hit alone, which is more sensitive to the precise timing of the peak and shutdowns, was also the worst so far reported in Europe.

On Wednesday, Mr Sunak attributed that to the fact that the UK is more reliant on hospitality and tourism. But he also expressed the need for some "humility" over the challenges ahead, that will have to be managed without a playbook to work with, as he put it.

One crucial issue transcends the sterile debate about a simple trade-off between health and wealth: that much of the shutdown has been volunteered by the public.

Second wave

It is not a case of it now being forced or enforced by the government. Large swathes of the public have decided voluntarily to maintain strong social distancing, whatever government says.

This could explain why the UK for now appears to be facing a painful double whammy. After delaying lockdown in March, the virus spread further and deeper than it did in other countries.

So the government-mandated lockdown needed to be longer than in other countries, leading to a bigger economic hit. But large swathes of the country also decided to lock themselves down, and have continued choosing mostly to stay at home.

Recession is unprecedented, says chancellor

Why is the UK in recession?

The government does appear to be learning from the experience in March. The 'eat out to help out' experiment is designed to change this psychology.

The anecdotal evidence suggests it is generating footfall - at least that was the case on a recent trip to Bath. What had been a ghost town, with key attractions shut, is now running at about a third of normal levels say local businesses.

But it also explains the absolute focus on trying to deal with Covid outbreaks locally at an early stage, and the quarantining of returning holidaymakers from some countries.

The government wants to deal with any second wave, without the need for a further national lockdown that would worsen the economy and require more borrowing to pay the wages of millions. That depends entirely on the nature of a new infection wave.

Sensitive period

What, for now, the chancellor is adamant he will not do, is extend the furlough scheme.

Asked about the logic of the scheme as a bridge, now required in some sectors for longer than anticipated, the chancellor said: "That's been one of the most difficult decisions that I've had to make... Eight months... is a very long period of time for something like that to be happening.

"I think most people would agree that that's not something that is sustainable indefinitely... But we also shouldn't pretend that absolutely everybody can and will be able to go back to the job they had. That, sadly, is not going to be the case," he told me.

"And we're not doing people any favours by pretending otherwise. What we should be doing in that circumstance is giving them new opportunities to chart a new future."

So, we are now moving into a very sensitive period. The economy is growing again, but has made up only about a third of what was lost.

The end of furlough, some radical changes to how the UK trades with the rest of Europe, and a possible new infection wave mean very choppy waters until the end of the year.--BBC

The millions being made from cardboard theft

Getting all your cardboard recycled may often seem like a pain, but there is big money to be made from all this so-called "beige gold". And sadly this is attracting criminals around the world.

Thieves are making a fortune from stealing used cardboard that's been left out to be recycled, and selling it on. This means that legitimate recycling firms, and the city and other local authorities who take a cut from their sales, are missing out on tens of millions.

"To be honest, most of us don't care who takes it away, as long as it goes," says a shopkeeper in the bustling Chamartin district of central Madrid.

Behind him stand two of the Spanish capital's well-known blue municipal recycling bins, which until February of this year had been raided daily by one of the city's numerous recycled cardboard trafficking gangs.

Meanwhile, a few miles away, at the headquarters of the Nature Protection Service (Seprona) of the Spanish Guardia Civil police force, hangs a map of Madrid covered in different coloured dots. The 18 colours mark out the 18 different routes used by the various gangs.

Seprona was brought in to help tackle the problem in 2018 after Madrid's city police force, the Policia Municipal Madrid, had failed to solve the issue with its policy of fining anyone caught stealing used cardboard. It was estimated that almost half of all cardboard put into recycling in Madrid was being stolen.

Back in February, the Seprona-led Operation Hartie (the Romanian word for paper) leapt into action, and 42 suspected cardboard gang members were arrested on suspicion of environmental offences and money laundering.

Of the 42, three were Spanish, the others were all Romanian.

They are accused of stealing and shipping more than 67,000 tonnes of waste a year since 2015, at an average value of €10m ($11.8m; £9m) per year.

Believed to have been involved in 11 of the 18 routes in the city, it is estimated that they cost the City Council of Madrid a total of €16m in lost recycling revenues.

In a case that has been delayed by the coronavirus pandemic, the trial is due to take place later this year. The police have photos of some of the men crawling in and out of recycling bins.

This photographic evidence came despite the Madrid council deliberately introducing dumpsters with small holes in 2016. "Perhaps the thieves just got thinner?" jokes the shopkeeper.

Ana Prieto, the press officer for Seprona, says the criminals set up a company that mixed the illegally collected cardboard with some that was legitimately sourced, "meaning a loss of traceability", before it was all exported "mainly to South East Asia".

While figures are not available for how much recycled cardboard is stolen globally, experts say it is very much a worldwide problem. And there are vast amounts of money to be made.

The annual value of the legitimate trade in recycled cardboard and other papers is expected to climb to $5.4bn (£4.1bn) by 2024, up from $4.3bn in 2017. This increase is not surprising when you consider the continuing rise in online shopping, and the fact that most consumer goods are delivered to you in cardboard boxes that are made from recycled fibre (said to be 93% recycled for boxes in Europe).

Over the past decade used cardboard has mostly been sent to China, to be pulped and turned into the new boxes its vast export sector requires. This has made some Chinese people very rich, such as billionaire Zhang Yin, the "queen of trash", whose firm specialises in importing used cardboard from the US.

Like any commodity, the price of recycled cardboard ebbs and flows according to global demand. Simon Ellin, chief executive of UK trade body The Recycling Association, says the current price is between £70 and £80 per tonne.

"But at the start of coronavirus it spiked to £130. Getting hold of cardboard was a bit 'name your price' at the time, because with everyone stuck at home there was a big rise in online sales," he says.

"But historically the price has been even higher. Ten years ago it was as high as £200 a tonne."

José Alfaro Moreno is team leader of the environmental crime team at Europol, the European Union's law enforcement agency. He helped on the case in Madrid, and says the theft of recycled cardboard is a pan-European problem.

"This phenomenon is far wider than you would imagine in Europe," he says. "It has crossed from [just] paper theft to money laundering, and fraud, with international and local networks interacting."

Mr Moreno adds that national police forces are now increasingly targeting the problem, particularly Italy's. Meanwhile, several media outlets have reported on the problem in the US, which has been prevalent in New York and California.

But does the problem exist in the UK? Mark Hall from recycling firm Business Waste says he "wouldn't be surprised".

"The problem is that recycled cardboard is so untraceable," he says. "It is not as if it has a tracker on it.

"And theft is hardly ever reported by companies, because why would they? If magic pixies have nicked their waste cardboard then it means they don't have to pay a firm like mine to come and pick it up. So they are going to keep schtum [quiet]."

This is very much the opinion of the shopkeeper we spoke to in Madrid.--BBC

Sports Direct owner Frasers delays annual accounts again

The release of annual results at Mike Ashley's Frasers Group - formerly Sports Direct - have been delayed for the second year running.

The group's profit and sales figures for the last 12 months were due to be published on Thursday 13 August, but have been put back a week.

Last year they were delayed by a week, and even then were hours late as the firm struggled to finalise its figures.

Frasers sought to reassure investors the delay was not because of problems.

In a statement to the Stock Exchange, the company said: "It is now anticipated that the company's full year results for the period ending 26th April 2020 will be published on 20th August 2020.

"Due to the undoubted scrutiny of our accounts, management and our auditors RSM will take this extra week to robustly review the final accounts and ensure that all necessary disclosures have been completed," it said.

"For the avoidance of doubt we can confirm there are no significant matters to address outside of normal audit completion procedures and the final accounts disclosure review."

The company blamed the delay on "final IFRS 16 disclosures still being completed and reviewed".

IFRS 16 is an International Financial Reporting Standard relating to the accounting of leases, which specifies how they must be recognised, measured, presented and disclosed.

Tax bill

The company's 2019 results were delayed by a week and then subject to continuous delays before finally being released more than 10 hours late and after the stock market had closed.

The figures included the shock news of €674m (£605m) tax bill from Belgian authorities. The company's then auditor Grant Thornton resigned in the wake of the chaos.

It also led to shareholder advisory firm Pirc calling the company "an embarrassment to UK corporate governance".

"Years of ineffective chairing seem to have taken their toll, and the company veers from one mistake to the next," Pirc said.

Mr Ashley was forced to write to the then business secretary, Andrea Leadsom, to explain the difficulties in finding a suitable adviser to check the firm's annual accounts.

This year analysts had expected Frasers to release its figures around mid July, but no announcement of a date was made until the end of the month, when it was scheduled for 13 August.

But even the 20 August figure may not prove to be final as the company said it only "anticipated" the results will be published on that date.

'Poorly timed'

In March, Mr Ashley was forced to apologise for a series of blunders in the way his chain has reacted to the coronavirus lockdown.

The retailer lobbied the government to keep his shops open, arguing they were an "essential service", but backed down after a backlash from staff and media.

In an open letter published at the time, Mr Ashley admitted his request was "ill judged and poorly timed" and said he would "learn from his mistakes".

He also admitted the firm's communications to staff and the public were "poor".

"I am deeply apologetic about the misunderstandings of the last few days. We will learn from this and will try not to make the same mistakes in the future," he said.--BBC

Boris Johnson warns 'long, long way to go' for UK economy

Boris Johnson has warned the UK has a "long, long way to go" before the economy improves, after official figures showed the largest drop in employment in over a decade.

"Clearly there are going to be bumpy months ahead and a long, long way to go," the Prime Minister said.

However, he said parts of the economy were "showing great resilience".

Between April and June, the number of people in work fell by 220,000, the Office for National Statistics said.

The drop in the number of people employed was the largest quarterly decrease since May to July 2009, the depths of the financial crisis.

Mr Johnson said he had "absolutely no doubt" that government schemes would "help this country get through it", adding: "it will get through it stronger than ever before".

The youngest workers, oldest workers and those in manual occupations were the worst hit during the pandemic, the ONS added.

The figures do not include the millions of people who are furloughed, those on zero-hours contracts but not getting shifts, or people on temporary unpaid leave from a job, as they still count as employed.

As such, they do not capture the full impact of the pandemic. Similarly, the UK unemployment rate was estimated at 3.9%, largely unchanged on the year and the previous quarter.

Jonathan Athow, deputy national statistician at the ONS, said: "The groups of people most affected are younger workers, 24 and under, or older workers and those in more routine or less skilled jobs.

"This is concerning, as it's harder for these groups to find a new job or get into a job as easily as other workers."

How bad is this likely to get?

The UK economy has been battered by the coronavirus pandemic, but unemployment has not surged as much as feared because large numbers of firms have furloughed staff.

However, analysts said unemployment was set to worsen in coming months as the scheme wound down, warning of a looming "cliff-edge" and a "lull before the storm".

>From restaurants to retailers, many UK businesses are already planning job cuts with 140,000 redundancies announced in June alone.

According to the ONS, the number of average hours worked continued to fall in April-June, reaching record lows both on the year and on the quarter.

The number of people claiming universal credit - a benefit for those on low pay as well as unemployed people - rose to 2.7 million in July, up by 117% since March.

Theatre technician Charlotte Baker, 29, is out of work as a result of the coronavirus crisis.

She started a new job at the Fairfield Halls in Croydon in September last year and was furloughed in March.

In June, she was made redundant, even though she could have been kept on furlough.

Now management at the Fairfield Halls has said the venue will not reopen until April next year, forcing her to contemplate a possible career change.

"It's definitely an uphill struggle and it's proving harder than previous ones," she told the BBC. "It's hard to have a positive outlook."

Charlotte has been looking into doing a carpentry course, but to obtain the necessary City and Guilds qualification would require her to spend £5,000 on training.

"It's a mountain to climb. I wouldn't mind climbing that mountain if it's something that I'm passionate about, but I'm not sure," she says.

"I'm hoping to make a decision by the end of August."

Jobless in the pandemic: 'It's hard to stay positive'

Between April and June there were falls in pay for those still working, with regular pay levels down 0.2% compared with a year earlier - the first negative pay growth since records began in 2001.

The number of people on zero-hours contracts also increased to more than one million.

"Early indicators for July 2020 suggest that the number of employees in the UK on payrolls is down around 730,000 compared with March 2020," said the ONS.

It believes the main reason this is more extreme than the fall in employment is because of workers who have a job but are not doing any paid work at the moment.

Redundancy: 'It’s been stressful and upsetting'

Which sectors are hiring and which are cutting back?

It added that a large number of people were estimated to be temporarily away from work, including furloughed workers - approximately 7.5 million in June 2020, with more than three million of these being away for three months or more.

The number of workers covered by the furlough scheme has since risen to 9.6 million by 9 August, and has yet to record a fall in any week since it began, separate statistics published on Tuesday by HM Revenue and Customs show.

The ONS said there had also been a sharp fall in the number of self-employed people between April and June.

It said there were 4.76 million self-employed people, 14.5% of all people in employment, a record 238,000 fewer than the previous quarter.

Is it all bad news?

If you're a glass-half-full sort of person, there is some less than awful news in the latest labour market figures.

The number of vacancies, for example, rose from its record low by 10% in May to July as lockdown restrictions were eased. The number of hours worked saw a record drop in the second quarter from April to June, but in July it was down by only 3%, less than half the fall in May and June.

However, there are some less jolly signs. The number on employer payrolls had only dropped marginally in the previous two months, but saw a much bigger drop in July, down 114,000, in spite of the reopening of many shops, restaurants and pubs.

And employers are increasingly making employees bear the risk that there isn't enough work for them to do, with the number of zero-hours contracts rising above one million for the first time.

And then there's the record drop in self-employment. And all this in spite of the government spending more than £40bn trying to protect employment through furlough and self-employed income support.

Unemployment tends to peak well after economic shocks have been and gone: this time will be no different.

What are economists saying?

Ruth Gregory, senior UK economist at Capital Economics, said the latest employment figures were "the lull before the storm".

She added: "The cracks evident in the latest batch of labour market data are likely to soon turn into a chasm, with the unemployment rate rising from 3.9% to around 7% by mid-2021."

She said further rises in unemployment in the coming months were "all but inevitable as the furlough scheme unwinds".

Capital Economics forecasts that the unemployment rate will peak at 7% in mid-2021 and remain above its pre-pandemic level of 4% until the end of 2022.

Ms Gregory said this suggested that the economic recovery would be "slow going".

UK employment falls by biggest amount in a decade

Jeremy Thomson-Cook, chief economist at Equals Money, said the figures showed the true level of those out of work had been "very effectively lowered by the government's furlough scheme" and that the worst lay ahead.

"Unfortunately, the end of the furlough scheme will present a cliff-edge, statistically and economically, for those currently relying on government support to make up their wages."

What's the political reaction?

Chancellor Rishi Sunak said the figures showed that the government's "unprecedented support measures" were working to "safeguard millions of jobs and livelihoods that could otherwise have been lost".

Shadow work and pensions secretary Jonathan Reynolds said it was "extremely worrying" that older workers, the self-employed and part-time workers had been hit hardest.

"Labour has repeatedly warned the government their one-size-fits-all approach will lead to job losses. These figures confirm what we feared - Britain is in the midst of a jobs crisis."--BBC

INVESTORS DIARY 2020

Company

Event

Venue

Date & Time

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

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