Major International Business Headlines Brief::: 14 August 2020

Fri Aug 14 05:44:56 CAT 2020

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Major International Business Headlines Brief::: 14 August 2020

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ü  South Africa's mining output down 28.2% year on year in June

ü  Exxaro reports jump in interim core earnings

ü  South Africa's rand backtracks as relief rally pauses

ü  Famous Brands says UK burger unit met July revenue goal

ü  Shares in S.Africa's Absa bank slip after steep profit warning

ü  Congo to meet miners to debate copper concentrate export waivers

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

ü  ‘Raise sick pay’ to lower virus health and economic risk

ü  France to be added to UK quarantine countries

ü  US jobless claims below 1m for first time since March

ü  Fortnite: Apple ban sparks court action from Epic Games

ü  New Look in new bid to turn fortunes around

ü  National Express to use jobs bonus to cut bus fares

ü  WeChat-owner shrugs off Trump's proposed US ban

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South Africa's mining output down 28.2% year on year in June

JOHANNESBURG (Reuters) - South Africa’s total mining output fell 28.2% year-on-year in June compared to a revised contraction of 27.6% in May, Statistics South Africa said on Thursday.

Below is the breakdown of the main minerals.

Year-on-year output percentage changes:

June May

Gold -17.0 - 21.8 (revised)

PGM -42.5 - 26.4 (revised)

Total Mining -28.2 - 27.6 (revised)

Exxaro reports jump in interim core earnings

JOHANNESBURG (Reuters) - South African coal company Exxaro Resources reported a 40% jump in core earnings due to higher coal exports and a favourable exchange rate offsetting one-off items.

Exxaro said earnings before interest, tax, depreciation and amortisation (EBITDA) for the six months to June 30 rose 40% to 3.929 billion rand ($224.9 million), boosted by higher commercial coal revenue offsetting higher costs.

Higher coal revenue was mainly driven by increased volumes of sales to power utility Eskom and a 39% rise in export volumes during the half-year, it said.

“Despite sustained global and domestic economic headwinds, compounded by market challenges and COVID-19, Exxaro maintained a resilient financial and operational performance, continuing our positive trajectory year-on-year,” Chief Executive Mxolisi Mgojo said.

However, headline earnings per share (HEPS) fell 24% to 13.21 rand ($0.7561) per share, compared with 17.30 rand a year earlier.

HEPS were impacted by the recognition of non-controlling interest charge of 1.224 billion rand for external shareholders of Eyesizwe RF, a special purpose private company that holds a 30% shareholding in Exxaro.

Coal production increased by 7% to 1,495 kilotonnes, mainly due to its Belfast and Grootegeluk mines.

The coal miner was deemed an essential service during South Africa’s lockdown, which lasted from late March to the end of May.

($1 = 17.4720 rand)

South Africa's rand backtracks as relief rally pauses

JOHANNESBURG (Reuters) - South Africa’s rand weakened slightly early on Thursday, pausing an advance in the previous session that saw the currency trade at its firmest in three days, with investors cautiously watching developments in the global economy.

At 0600 GMT the rand was 0.07% weaker at 17.4800 per dollar, having rallied to 17.3500 on Wednesday as souring diplomatic relations between the United States and China felled the greenback.

Recent tensions between Washington and Beijing over U.S. allegations of spying against the Asian superpower have overshadowed local issues, driving demand into riskier assets as investors searched for short-term returns.

With lending rates still relatively high in South Africa, despite deep cuts by the central bank, the rand and local bonds have seen inflows from investors ditching safe-havens but analysts have said these may offer only short-term relief.

“The rand posted meaningful short-term gains yesterday as apparent stop-losses were triggered below 17.5000, and this provided the catalyst for some exporter activity that saw the local unit reach the mid-17.30s,” analysts at Nedbank wrote.

“However, it has not been able to sustain these gains; it currently holds at sub-17.5000. Local markets are likely to be cautious, as Eskom has announced the resumption of stage 2 load-shedding.”

State power firm Eskom said breakdowns of some its generating units had forced it to resume countrywide blackouts, or loadshedding, with “stage 2” seeing it slash up to 2,000MW from the national grid.

Famous Brands says UK burger unit met July revenue goal

JOHANNESBURG (Reuters) - South Africa’s Famous Brands Ltd said on Thursday its British-based unit Gourmet Burger Kitchen (GBK) has achieved its revenue target for July of roughly half year-ago levels.

The UK- and Ireland-focussed premium burger brand GBK previously forecast that in July 2020 it would target achieving 49% of the revenue it posted in July 2019.

“It is pleasing to report that this was accomplished,” Famous Brands said in a statement, adding this was achieved with the 27 restaurants it kept open for the delivery and collection of food parcels.

The future of the unit is uncertain, however, after Famous Brands said in April it would not provide any further financial assistance to GBK.

“The Board of GBK will continue to explore all options to ensure the long-term sustainability of the business,” the company said.

The owner of hamburger fast food chain Steers and casual dining restaurant Wimpy said that out of its 62 GBK stores in the United Kingdom, 37 are open and offering full service, which includes delivery, collection and dine-in.

The remaining 25 stores are closed and in Ireland, one restaurant is fully operating out of five, it said.

Famous Brands spent more than 2.3 billion rand ($132.03 million) in 2016 to buy out GBK, but the South African company has twice had to write down part of its investment in the unit and pump money into it for its survival.

($1 = 17.4209 rand)

Shares in S.Africa's Absa bank slip after steep profit warning

JOHANNESBURG (Reuters) - Shares in South Africa’s Absa fell over 5% at market open on Thursday, a day after the lender warned its half-year profits could be almost wiped out as a result of the coronavirus crisis.

Absa said in a trading statement published after market close on Wednesday that bad loans during the six months to June 30 had quadrupled compared to the same period last year, and profits could plunge by up to 97% as a result.

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Congo to meet miners to debate copper concentrate export waivers

(Reuters) - Mining companies and copper and cobalt buyers have been invited to a meeting in Kinshasa next week to discuss if there is a way to maintain waivers to an export ban that are meant to expire in September, the mining minister said on Thursday.

Congo, Africa’s biggest copper producer, banned exports of copper and cobalt concentrates in 2013 to encourage miners to process and refine the ore within its borders.

But the country does not have enough smelting capacity and has repeatedly issued waivers.

A full-scale ban would lead to a drastic fall in Congo’s copper exports.

It would also deliver a heavy blow to neighbouring Zambia, which processes Congolese copper and cobalt.

“There have been exemptions for certain reasons. Each time, we analyse the file with all the technical data. The applications are submitted with the justifications,” mines minister Willy Kitobo told Reuters.

“These mining companies and the processors interested in purchasing these concentrates have been invited to Kinshasa on (August) 20th to see what can be done.”

In January, China’s state-owned mining company CNMC launched Congo’s first large-scale smelter, the Lualaba Copper Smelter (LCS).

The government joint venture is capable of processing 400,000 tonnes of copper concentrate and producing around 120,000 tonnes of copper blister per year.

But even at full capacity, the LCS cannot process all Congo’s copper production. Congo produced 765,000 tonnes of copper concentrate in the first half of the year alone, the central bank said, up 13.4% year-on-year.

“Our initial take is that they’ll fill Lualaba’s capacity and then issue waivers for the rest,” said Indigo Ellis, head of Africa research at Verisk Maplecroft, a risk analytics company.

“But it’s not a sustainable option, the harm that it’ll cause for the industry and investment environment is negative.”

Congo Chamber of Mines president Louis Watum said he understands the government wants to boost beneficiation in-country, because of the revenue it generates, but said most mining companies cannot smelt in Congo because of inadequate electricity supply.

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)

‘Raise sick pay’ to lower virus health and economic risk

Statutory sick pay should be increased and the furlough scheme extended on a flexible basis, new research suggests.

Doing so would better manage a "crude" trade-off between lives and livelihoods as the UK economy reopens.

These are two of the recommendations in a new report from the Royal Society.

It says economic and health data should be combined to produce the best economic outcome at the smallest loss of life. The government says it has already protected 9.6 million jobs.

The report by Professors Sir Tim Besley and Sir Nicholas Stern warns that an abrupt and premature easing of restrictions would lead to a second wave of infections that would mean both a higher death toll and ultimately a greater hit to the economy.

Flexible furlough

The report is published a day after data showed the UK suffered the biggest economic hit of the world's richest nations between April and June while also incurring the highest number of excess deaths to date in Europe.

It argues that as the furlough scheme - which has supported the wages of 9.6 million workers - is phased out, statutory sick pay of £95.85 a week is a major disincentive for workers to self-isolate.

This, in turn, makes efforts to successfully implement Track Trace and Isolate schemes almost impossible.

A review of sick pay policy along with the extension of a more flexible furlough scheme would help mitigate both health and economic risks.

'Targeted' help

The blanket phasing out of the current furlough scheme across all sectors by October is not sufficiently sensitive to the risks of a second wave of infections, the report argues.

"I think the furlough scheme in its current form is almost certainly going to have to be modified to be more targeted towards occupations that can't resume anywhere near their normal level of activity," said Sir Tim Besley, professor of economics at the London School of Economics and co-author of the report.

"If people are being asked to self-isolate they need to be cushioned against the economic consequences of that".

Professors Stern and Besley also recommend minimising the rotation of staff between different shifts and the introduction of subsidised workplace testing - particularly in sectors where close contact is hard to avoid.

Risk of repeat

Combining economic and health data to optimise policy response will require high quality data and the report encourages the gathering of more detailed information from financial institutions to track the economic impact of policy interventions.

Without it, the report says, the UK risks repeating its experience of suffering the worst of both worlds.

The government insists it has protected jobs and offered help to those needing it.

"We've protected more than 9.6 million jobs through the furlough scheme, supported more than two million self-employed people and paid out billions in loans and grants to thousands of businesses," a Government spokesperson said.

"And for those in most need, we've provided an unprecedented package of support including injecting £9.3bn into the welfare system, mortgage holidays and additional help for renters.

"We've also made sick pay payable from day one and will refund employers with up to 250 staff the cost of up to a fortnight's sick pay. Employers can, and many do, pay more than the statutory rate - something we encourage."--bbc

France to be added to UK quarantine countries

People coming to the UK from France and the Netherlands will be forced to quarantine for 14 days from Saturday.

Transport Secretary Grant Shapps said the measure - which also applies to people travelling from Monaco, Malta, Turks and Caicos, and Aruba - would kick in from 04:00 BST.

He added that this was necessary to keep coronavirus infections down.

France warned the UK decision would lead to "reciprocal measures" across the Channel.

Clement Beaune, France's secretary of state for European affairs, tweeted that the UK's decision was a matter of "regret" for the French.

The UK government's decision follows a surge in cases in the countries affected in recent days.

Airlines UK described it as "another devastating blow to the travel industry already reeling from the worst crisis in its history".

With up to half a million UK tourists thought to be in France at present, the deadline is expected to induce a rush to ports and airports, with thousands of tourists desperate to avoid quarantine.

The Eurotunnel website is reportedly struggling to deal with the volume of inquiries.

John Keefe, director of public affairs at Getlink, which operates the Channel Tunnel, told BBC's Newsnight programme that the trains were "already pretty much fully booked" on Friday.

He said: "We just haven't got the space to take everybody who might suddenly want to come up to the coast."

Urging travellers to check online if there is space for them before heading to the terminal, he said people should understand "that it's not going to be easy to get back" to the UK.

The UK's ambassador to France, Lord Llewellyn, acknowledged that the new quarantine rule would be "unwelcome news" for Britons in the country, but stressed that people could continue with their holidays as long as they follow safety precautions and self-isolate on their return.

Shadow home secretary Nick Thomas-Symonds said while the Labour party supports "evidence based measures" at the border, it was "vital" that No 10 had a "joined-up strategy" and "urgently" puts in place a specific deal to support the heavily impacted travel sector.

The MP added: "That the government has still not put in place an effective track, trace and isolate system has made matters far worse and made it more likely that we are reliant on the blunt tool of 14-day quarantine."

He called on Downing Street to publish science behind its decisions, "and details of any work being done to reduce the time needed to isolate through increased testing and other measures".

According to the data company Statista, people from the UK paid 10.35 million visits to France last year, putting it second behind Spain - with 18.12 million - in terms of popularity.

The Foreign Office is now warning against "all but essential travel" to France - the quarantine measure was imposed for Spain on 25 July.

The ending of more so-called "travel corridors" - allowing movement between the UK and the other countries with the need to self-isolate on return to the UK - follows a "significant change" in the risk of contracting Covid-19, the Department for Transport said.

It added that there had been a 66% increase in newly reported cases per 100,000 people in France since last Friday.

For the Netherlands, it was up 52%. And the increase for Malta was 105%, while it was 273% for Turks and Caicos and 1,106% for Aruba.

Mr Shapps said quarantine was needed because "we've absolutely work so hard to keep our numbers down here", adding: "We can't afford to re-import those cases from elsewhere."

Bowling alleys to reopen

Ahead of a government meeting on the new measures, UK Prime Minister Boris Johnson promised to be "absolutely ruthless" in deciding on rules for holidaymakers from abroad.

"We can't be remotely complacent about our own situation. Everybody understands that in a pandemic you don't allow our population to be re-infected or the disease to come back in," he added.

On Thursday, France reported 2,524 new coronavirus cases in 24 hours, the highest daily increase since its lockdown was lifted in May.

The country's Prime Minister, Jean Castex, said on Tuesday that coronavirus numbers had been going "the wrong way" for a fortnight.

What are the rules in France and other parts of Europe?

How will the world vaccinate seven billion people?

Meanwhile, the government has announced that maximum fines for people in England who repeatedly refuse to wear a face covering could double to £3,200, while organisers of illegal raves could face a £10,000 penalty.

But from Sunday indoor theatre, music and performance venues will be able to reopen with socially distanced audiences.

Casinos, bowling alleys, skating rinks and soft play centres will also be allowed to resume, as will "close-contact" beauty services such as facials, eyebrow threading and eyelash treatments.--bbc

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US jobless claims below 1m for first time since March

The number of Americans filing new claims for unemployment has dipped below 1 million for the first time since March.

About 963,000 people sought the benefits last week, down from nearly 1.2 million the week before, the Labor Department said.

The figures have been subsiding since peaking at 6.9 million in late March.

But they remain extremely high, driving debate in Washington over the need for further stimulus.

More than 28 million people - nearly one in five American workers - were still collecting benefits in the week ended 25 July, the Labor Department said.

Prior to the pandemic, the highest number of new jobless claims recorded in a week was 695,000, set in 1982.

"Another larger-than-expected decline in jobless claims suggests that the jobs recovery is regaining some momentum but with a staggering 28 million workers still claiming some form of jobless benefits, much labour market progress remains to be done," said Lydia Boussour, senior US economist at Oxford Economics.

Washington stalemate

Hiring in the US slowed last month as the country struggled to contain the coronavirus, with employers adding 1.8 million jobs, down from 4.8 million in June.

The unemployment rate was 10.2%, down from April's 14.7% but still higher the 10% peak during the 2007-2009 financial crisis.

Economists say the path of the economic recovery remains uncertain, and likely to worsen after an emergency $600 increase to unemployment benefits, intended to top off payments during the pandemic, expired last month.

Talks in Washington about additional stimulus collapsed last week without a deal.--bbc

Fortnite: Apple ban sparks court action from Epic Games

Apple has removed Fortnite from its App Store, preventing players from installing one of the world's most popular games on iPhones.

It came after a Fortnite update that let players buy in-game currency at a lower rate if they bought direct from maker Epic Games - bypassing Apple.

Epic appeared to know the ban would come, announcing it had filed a legal complaint minutes after the removal.

Apple takes a standard 30% cut of sales from its compulsory payment system.

Hours later, Google also appeared to remove the app from its Google Play Store - though it remains available on Android phones through other means, such as Epic Games' own launcher.

On iOS, the App Store is the only way to legitimately load apps. But Apple said Epic had taken the "unfortunate step of violating the App Store guidelines".

Those guidelines ban any payment system apart from Apple's own, and has been the subject of several high-profile rows between developers and Apple.

Epic said any iPhone players who already have the app installed should be able to continue playing until the game's next update rolls out. After that, they will lose some features.

Those on an Apple Mac computer will not be affected, since that version does not use the iOS App Store.

In addition to tweeting the legal complaint it filed in a California court, Epic also announced the imminent in-game screening of a short film titled Nineteen Eighty-Fortnite - a play on George Orwell's novel Nineteen Eighty-Four.

The novel is about a dystopian society that controls its citizens and tolerates no dissent - and was itself referenced by Apple in a famous television ad in the year 1984, when the young company styled itself as taking on then-dominant IBM.

Epic Games directly referenced that advertisement in its legal complaint, writing: "Apple has become what it once railed against: the behemoth seeking to control markets, block competition, and stifle innovation."

The court documents allege that Apple effectively runs a monopoly in both deciding what apps can appear on iPhones and demanding its own payment system - with the relatively high 30% cut - is used.

Piers Harding-Rolls, games research director at Ampere Analysis, said Epic's update breaking the rules "was done to make Apple remove the app".

"Removing Fortnite from the App Store helps to deliver a groundswell of support for Epic, something it is trying to achieve."

And he added that iPhones are not the biggest platform for Fortnite, but Epic will still notice its ban - the iOS version "generates tens of millions of dollars in revenue every month on Apple platforms", he said.

Clash of titans

Developers really, really don't like this charge. For many, a 30% cut of profits is akin to a shakedown.

Last month, one app developer likened Apple to the mafia. The criticism is essentially an anti-competition one.

Apple and Google run the operating systems of pretty much all of the phones in the world. That means they get to choose who can run apps on their stores, and who can't.

They also get to set the charges. This is duopoly, say some developers.

In Epic Games though, Apple has an unwanted foe.

Fortnite is ludicrously profitable, Epic Games has the money to take Apple on. And the way this has been done - passing the savings on the consumer - is clearly tactical. Epic Games wants to take this fight out into the open.

And with the EU and US Congress looking closely at Apple's business practices, this is attention the company could do without.

In its court filing, Epic said it was not seeking financial compensation.

"Epic is seeking injunctive relief to allow fair competition in these two key markets that directly affect hundreds of millions of consumers and tens of thousands, if not more, of third-party app developers," it said.

The documents also hint at a possible larger goal.

"But for Apple's illegal restraints, Epic would provide a competing app store on iOS devices," it says.

Epic Games has already attempted to disrupt the PC gaming market with the launch of its Epic Games Store, taking on the dominant player, Steam, in an attempt to lure players away with free games, which have often been popular, top-rated titles.

Piers Harding-Rolls said the row is reminiscent of that challenge - Epic's store charges game developers 12% on PC games, compared to Steam's 30%.

"Apple and Google have been a long term target of Epic CEO Tim Sweeney's ire, as he believes the 30% revenue share they charge for app sales and in-game monetisation is too high," he said.

"However, taking on Apple is a different challenge than in the PC market as it's impossible to build a third-party storefront on iOS, or monetise apps outside of the App Store."

Google's Android system also uses Google's payment system for app store purchases, from which Google takes a cut - but Android allows developers to point users to other payment options.

In a statement, Apple said the rules were applied equally to every developer, and that Epic had updated their game "with the express intent of violating the App Store guidelines".

"Epic has had apps on the App Store for a decade, and have benefited from the App Store ecosystem," it said.

"The fact that their business interests now lead them to push for a special arrangement does not change the fact that these guidelines create a level playing field for all developers and make the store safe for all users."

It added that it would try to work with Epic to bring Fortnite back.--bbc

New Look in new bid to turn fortunes around

High Street shopping chain New Look said it is negotiating with landlords in a new bid to mend its finances after the coronavirus lockdown hit sales at its stores.

It wants landlords to accept rents based on the sales stores generate rather than at a pre-arranged rate.

The move is the second major overhaul of the company in three years.

New Look says 459 out of its 496 stores have re-opened. But sales at stores are 38% lower since reopening.

Founded 1969 with first store in Taunton, Somerset, the women's clothing chain has had a difficult few years.

It closed stores and agreed rent reductions in 2018 through a company voluntary arrangement (CVA), a process it will also use this time.

"Out of absolute necessity, we are preparing to launch a CVA that would reset our rental cost base back to market rent through a turnover-based model that fairly reflects the future performance of the company and wider retail market," it said. The process will be started later this month.

New Look says it has already agreed a plan with its lenders to strengthen its finances.

It aims to slash its debts from £550m to about £100m to cut the amount it is paying in interest.

"However, this recapitalisation - which will enable us to deliver our long-term strategic plans and safeguard 12,000 jobs - can only be delivered if we secure the support of our landlords for our forthcoming CVA," said chief executive Nigel Oddy.--bbc

National Express to use jobs bonus to cut bus fares

National Express has said it will use £4m from the government's Job Retention Bonus scheme to cut fares on its West Midlands and Dundee bus routes.

It said the move, which will not affect coaches fares, would help boost demand and support the local economies.

The bonus scheme will pay firms £1,000 for each employee brought back from furlough and employed until January.

A Treasury spokesman told the BBC: "There's no restrictions on how firms can use the bonus payments."

Rishi Sunak defends furlough bonus scheme

National Express said it would claim £4m from the Job Retention Bonus scheme for staff on its West Midlands and Dundee bus services, suggesting 4,000 workers will be brought back from furlough and employed until at least January.

It said a "sizeable proportion" of its remaining 3,000 staff had also been furloughed, and some but not all had been brought back to work.

It told the BBC it had no plans to cut jobs.

Companies including retailer Primark, property website Rightmove and catering giant Compass have already said they will reject the offer of millions of pounds in payouts.

'Future of our region'

National Express is the biggest bus operator in the West Midlands, carrying about 90% of the region's passengers. Its Dundee service is much smaller but it runs the majority of buses in the city.

Tom Stables, managing director of National Express UK, said: "By using our allowance from the chancellor's job retention bonus to reduce fares across the West Midlands, we are investing in the future of our region.

"Making bus travel cheaper will help get our local high streets back on their feet, lock in the environmental benefits that came out of lockdown and get the people of the West Midlands back to work.

"And of course as a transport operator, we always want to persuade more people to get the bus."

National Express Group is best known for its coach services, but also runs bus, train and tram routes in the UK and overseas. It employs 7,000 people in the UK.

Like others, it had to temporarily close services during lockdown and has run reduced timetables since restrictions were eased.

National Express said it had seen passenger demand slump after lockdown by 80% across the group, while revenue for the six months to June dropped more than 20%,

A number of its UK and international frontline staff have also died after contracting Covid-19.

Scheme criticism

The government's job retention bonus scheme is intended to provide an incentive for companies to keep workers employed as the furlough scheme, which helped pay wages, is phased out and ends on October.

If every eligible worker is covered it will cost £7bn - making it a major plank of Chancellor Rishi Sunak's £30bn economic recovery plan.

Defending the scheme last month, Mr Sunak said it would "serve as a significant incentive" to preserve jobs amid the pandemic.

But economists have questioned its value for money, while Labour has called for an inquiry into its efficacy.

Fashion retailer Asos, holiday park operator Center Parcs and retailer John Lewis are among others to have said they will not use the bonus.--bbc

WeChat-owner shrugs off Trump's proposed US ban

Tencent has played down Donald Trump's ban on its WeChat app, believing it will only affect its US operations.

The tech giant runs an equivalent messaging platform in China called Weixin which it hopes will be unaffected.

The bigger fallout may be Apple's sales in China if its iPhones aren't allowed to download Chinese messaging apps.

WeChat has more than one billion users worldwide but says the US only accounts for 2% of its revenue.

Last Friday, US President Donald Trump ordered US firms to stop doing business with both WeChat and TikTok within 45 days citing national security concerns.

What is Tencent?

The TikTok ban was expected but still "shocked" the company's owners ByteDance. WeChat, and its parent company Tencent, also found itself caught in the crossfire of the escalating tensions between the US and China.

However, Tencent, the world's largest gaming firm, downplayed Mr Trump's executive order when it reported its second quarter results on Wednesday. It saw a 37% rise in profits.

"If you look at the executive orders from May 2019 and then obviously the executive order a couple of days ago, they specify very clearly they cover US jurisdiction, and consequently we don't see any impact on companies advertising on our platform in China," said James Mitchell, Tencent's chief strategy officer.

Bigger bite

Business analysts are unclear about the full implications of the US bans on Tencent and ByteDance, and are waiting for more details.

There are fears that Apple could suffer if the ban stretches to its operations in China. Experts say sales of its iPhone will be hit hard if Chinese consumers are not allowed to download messaging apps like Weixin onto them.

The executive order said it would ban "any transaction that is related to WeChat by any person, or with respect to any property, subject to the jurisdiction of the United States, with Tencent Holdings Ltd. (a.k.a. Téngxùn Kònggǔ Yǒuxiàn Gōngsī), Shenzhen, China, or any subsidiary of that entity."

Mr Trump said that the spread in the US of mobile apps developed and owned by Chinese firms "threaten the national security, foreign policy, and economy of the United States".

According to calculations made by Bloomberg the Chinese market is worth around $44bn (£33.7bn) a year to Apple.--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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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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