Major International Business Headlines Brief::: 18 August 2020

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Major International Business Headlines Brief::: 18 August 2020

 


 

 


 <mailto:info at bulls.co.zw> 

 


 

 


 

 

ü  South Africa's TFG concludes agreement to buy Jet stores, some approvals
pending

ü  South Africa's embattled state arms firm appoints interim CEO

ü  S.Africa's Sasol to issue up to $2 billion in shares in 2021

ü  Nigerian inflation rises for 11th month in July as import disruption
weigh

ü  S.Africa's Tiger Brands to sell processed meats business for $24.7 mln

ü  Flour Mills of Nigeria eyes bond sale within two months - exec

ü  South African stock market on a winning streak on easing lockdown rules

ü  Ghana's fiscal deficit seen narrowing to 9.4% in 2021

ü  Egypt's GASC issues tender for vegetable oils for Oct. 25-Nov. 20 arrival

ü  Congo's central bank makes huge rate hike to 18.5%

ü  Ryanair cuts flights as EU virus rates hit bookings

ü  Huawei: US tightens restrictions on Chinese giant

ü  Selfridges to offer clothing rental in environmental push

ü  Coronavirus: Japan suffers its biggest economic slump on record

 


 <mailto:info at bulls.co.zw> 

 


 

South Africa's TFG concludes agreement to buy Jet stores, some approvals
pending

JOHANNESBURG (Reuters) - South African retailer TFG said on Monday it has
concluded an agreement to buy select assets of budget clothes retailer Jet
from the administrators of rival Edcon and expects to meet all conditions by
the end of September.

 

TFG, known as The Foschini Group, said in July it will buy 371 stores and
some assets of Jet for 480 million rand ($27.56 million) in order to expand
into the budget clothes market, a segment in which it is not a major player.
[nL3N2EK1XF]

 

It said it has now reached an agreement for the assets in South Africa,
where most of the stores it is buying are located. Similar agreements for
stores in Botswana, Namibia, Lesotho and the kingdom of eSwatini are
expected to be finalised shortly, it said.

 

The remaining conditions include approval by competition authorities, an
agreement with Jet’s landlords on amended lease terms and a deal with credit
and financial services provider RCS to continue to operate Jet’s credit
book.

 

Edcon, which also owns department store chain Edgars, applied for bankruptcy
protection in April in an attempt to salvage parts of the group. Edcon has
been a go-to place for South African shoppers for nearly a century, but ran
into financial problems and failed to compete with international fashion
chains such as Sweden’s H&M.

 

($1 = 17.4145 rand)

 

 

 

South Africa's embattled state arms firm appoints interim CEO

JOHANNESBURG (Reuters) - South Africa’s embattled state arms manufacturer
Denel has appointed Talib Sadik, who currently serves on its board of
directors, as interim chief executive, the company said on Monday.

 

Sadik’s appointment comes after Danie du Toit resigned as CEO after less
than two years in the job, after Denel struggled to pay staff due to a
liquidity crisis aggravated by the COVID-19 pandemic.

 

Du Toit has not given a reason for resigning, but in a recent interview he
told Reuters the company may not survive the next few months unless the
government lets it use some promised bailout funds to generate revenues
rather than repay debt.

 

Denel, which makes equipment ranging from armoured vehicles to missiles, is
embroiled in a dispute with labour unions over outstanding salaries and
statutory obligations such as paying into its employee pension fund.

 

Sadik worked as Denel chief executive between 2008 and 2012 and has worked
on the company’s latest turnaround plan, Denel said in a statement. The
recruitment process for a permanent CEO is under way.

 

 

 

 

S.Africa's Sasol to issue up to $2 billion in shares in 2021

JOHANNESBURG (Reuters) - South African petrochemicals group Sasol will issue
up to $2 billion of shares in the second half of 2021 as it battles high
debt, lower oil and chemicals prices and the coronavirus crisis, it said on
Monday, sending its shares sharply lower.

 

The world’s top manufacturer of motor fuel from coal, said the exact amount
to be raised would be subject to progress made on asset disposals and cost
cutting.

 

Shares in Sasol fell 9.1% to 132.89 rand by 0711 GMT after announcing what
could be among the country’s largest rights issues in decades, potentially
exceeding the company’s market capitalisation of 91.99 billion rand.

 

Investors have been concerned by the company’s debt, which has been
exacerbated by delays and cost overruns at its Lake Charles Chemicals
project (LCCP) in Louisiana and prompted the resignations of its joint chief
executives to restore shareholder confidence.

 

Sasol on Monday reported a 91.3 billion rand ($5.3 billion)loss for the year
to June 30, compared with earnings of 6.1 billion rand the previous year,
hit by a 111.6 billion rand writedown on its chemicals and energy assets.

 

The company said total debt for the year stood at 189.7 billion rand, up
from 130.9 billion rand a year earlier.

 

“Financial year 2020, which we indicated would be our peak gearing period,
saw our stretched balance sheet come under significant pressure initially
with the collapse in the Brent crude oil price to 21-year lows and then the
onset of the COVID-19 pandemic,” said Chief Executive Fleetwood Grobler.

 

Core full-year headline earnings per share fell 61% to 14.70 rand ($0.85)
from 37.65 rand the previous year.

 

Earnings were also hit by 3.9 billion rand in depreciation charges and 6
billion rand in finance charges, Sasol said, adding that it would continue
to suspend dividends to protect liquidity amid ongoing economic uncertainty.

 

($1 = 17.3624 rand)

 

 

 

Nigerian inflation rises for 11th month in July as import disruption weigh

(Reuters) - Annual inflation in Nigeria rose for the 11th straight month in
July, the statistics office said on Monday, as the novel coronavirus
pandemic took its toll on imports and logistics.

 

Inflation climbed to 12.82%, its highest level in more than two years, from
12.56% in June, the National Bureau of Statistics said.

 

Yields on Treasury bills and bonds have now fallen below inflation, a major
stumbling block for the central bank’s push to attract foreign inflows to
support the naira and boost the economy.

 

The central bank has weakened the currency twice this year, to absorb the
impact of a sharp fall in crude prices, which have caused a steep decline in
growth. The move has also added to inflation with dollar shortages
disrupting imports.

 

An analyst at Lagos-based consultancy Financial Derivatives said a hike in
petroleum prices and disruptions linked to the phased easing of the
coronavirus lockdown are partly to be blamed for the rise in inflation.

 

Nigeria lifted an interstate travel restriction and allowed domestic flights
to resume in July as airlines hiked fares to reflect social distancing rules
and amid low demand.

 

The statistics office said the prices of passenger transport by air and road
rose the most on the non-food index, in addition to charges for medical
services and pharmaceutical products.

 

A separate index for food, which accounts for the bulk of the inflation
basket, showed a price increase of 15.48% from 15.18% in June. Food
inflation has been in double digits for more than three years.

 

Africa’s top oil exporter faces economic hardship from the coronavirus
outbreak. The government expects the economy to contract by as much as 8.9%
this year.

 

 

 

S.Africa's Tiger Brands to sell processed meats business for $24.7 mln

JOHANNESBURG (Reuters) - South African food producer Tiger Brands will sell
its processed meats business through two separate deals for a combined 428
million rand ($24.7 million), it said on Monday.

 

The disposal of the business, which was closed temporarily in 2018 after the
world’s biggest listeriosis outbreak, is part of a strategic review
initiated before that outbreak and concluded that the business was “not an
ideal fit” within the group’s portfolio.

 

Molare Proprietary Limited will buy the abattoir business at Olifantsfontein
while the meat processing factories at Germiston, Polokwane and Pretoria
will be acquired by Silver Blade Abattoir Proprietary Limited, a
wholly-owned subsidiary of Country Bird Holdings, Tiger Brands said.

 

Molare, one of South Africa’s largest piggery businesses and one of the main
suppliers to the abattoir operation, will pay 117 million rand for its
acquisition while Silver Blade will pay 311 million rand for the factories.

 

“One of the major outcomes we would have achieved by selling the businesses
as going concerns is that the jobs of almost 1,000 employees will be
safeguarded,” said Tiger Brands Chief Executive Noel Doyle.

 

The company is facing a class action lawsuit over its role in the
listeriosis outbreak, which killed more than 200 people in South Africa and
was traced back to a factory run by Tiger Brands-owned Enterprise Foods.

 

Tiger Brands said that any potential liability under the class action will
not transfer to the new owners.

 

As part of the agreements, the company indemnifies the purchasers against
any potential liability that may arise on conclusion of the legal process,
Tiger Brands said.

 

($1 = 17.3430 rand)

 

 

 

Flour Mills of Nigeria eyes bond sale within two months - exec

ABUJA (Reuters) - Flour and pasta maker Flour Mills of Nigeria plans to
issue a bond within the next two months as part of a 70 billion naira
($183.7 million) programme to refinance existing debt, a group executive
said on Monday.

 

The issue will take advantage of low money market rates, he said.

 

The company sold 30 billion naira in commercial paper in April, it said,
part of measures to cushion the possible impact of the novel coronavirus on
its business.

 

($1 = 381.0000 naira)

 

 

 

South African stock market on a winning streak on easing lockdown rules

JOHANNESBURG (Reuters) - The South Africa stock market opened the week on a
high on Monday, maintaining last week’s largely winning streak after
President Cyril Ramaphosa removed lockdown restrictions over the weekend.

 

Ramaphosa said that from midnight on Monday a ban on alcohol and tobacco
sales would be lifted, travel between provinces would be allowed, and
restaurants and taverns could return to normal business subject to hygiene
protocols.

 

Indications were that COVID-19 infections had peaked, he said.

 

The benchmark FTSE/JSE all share index was up 0.23% to 57,211 points while
the FTSE/JSE top 40 companies index was up 0.35% to 52,929 points in
intra-day trading at 1155 GMT.

 

Hospitality shares soared with shares in hotels, gaming and entertainment
giant Sun International Ltd up 11%, Tsogo Sun Hotels Ltd up 9.5% and City
Lodge Hotels Ltd was up 8.7% at 11:45 GMT.

 

Analysts said the announcement was a much-needed relief for South Africa.

 

“(Industries are) going to benefit from an uptick in turnover which is
desperately needed,” said Ryan Woods, a trader with Independent Securities,
attributing the movement in shares of these companies.

 

South Africa’s biggest cigarette seller British American Tobacco Plc was up
1.4%.

 

The rand lost ground after gaining early on Monday mirroring moves in other
emerging market currencies including the Turkish lira, as optimism over
easing of the lockdown proved short-lived for the currency markets.

 

By 1155 GMT it traded at 17.4500 versus the dollar, more than 0.3% weaker
than its previous close.

 

Government bonds yields slightly increased, with the yield on the 2030 bond
at 9.235%.

 

 

 

Ghana's fiscal deficit seen narrowing to 9.4% in 2021

ACCRA (Reuters) - Ghana’s fiscal deficit is projected to narrow from 11.4%
of gross domestic product (GDP) in 2020 to 9.4% in 2021, the finance
ministry said in a budget document on Monday.

 

The deficit will narrow further to 6.4% in 2022, 4.9% in 2023 and 3.2% in
2024, the ministry forecast.

 

 

 

Egypt's GASC issues tender for vegetable oils for Oct. 25-Nov. 20 arrival

CAIRO (Reuters) - Egypt’s General Authority for Supply Commodities (GASC)
said on Saturday it was seeking soyoil and sunflower oil in an international
tender with a deadline for offers on Tuesday.

 

GASC said it wants at least 30,000 tonnes of soyoil and 10,000 tonnes of
sunflower oil, and is seeking the oil for arrival from Oct. 25-Nov. 20.

 

GASC said payment would be made using a 180-day credit facility.

 

 

 

Congo's central bank makes huge rate hike to 18.5%

DAKAR (Reuters) - The central bank of Democratic Republic of Congo has
raised the main interest rate to 18.5% from 7.5%, central bank official
Plante Kibadhi said on Saturday.

 

The regulator had lowered the rate from 9% in March in order to cushion the
economy from the impact of the coronavirus crisis, following similar actions
by African central banks as the virus spread across the continent.

 

The latest rate hike was carried out to re-anchor inflation expectations,
the International Monetary Fund said.

 

Year-on-year inflation in Congo stood at over 14% as of end-July, around 10
percentage points higher than at the same point last year, according to
central bank figures.

 

The central bank has previously said it expects the economy to contract 2.4%
this year compared with growth of over 4% in 2019 partly due to
coronavirus-linked disruptions to mining, which accounts for a third of
national output.

 

The pandemic has also dampened global demand for metals and other raw
materials.

 

 

 

 

Huawei: US tightens restrictions on Chinese giant

The US is placing further restrictions on Huawei Technologies in a bid to
limit the company's access to electronic components.

 

The aim is to stop the Chinese company buying computer chips made using US
technology, even if they were not designed specifically for Huawei.

 

It also adds 38 names linked to Huawei to a trade blacklist.

 

"Huawei has continuously tried to evade" restrictions imposed in May,
Secretary of State Mike Pompeo said.

 

At that time, the US Commerce Department said global chipmakers that used US
technology had to obtain a licence from the US government to work on designs
for Huawei.

 

The new order broadens those restrictions, requiring companies to seek
permission even if they are selling an "off the shelf" general purpose
design.

 

"As we have restricted its access to US technology, Huawei and its
affiliates have worked through third parties to harness US technology in a
manner that undermines US national security and foreign policy interests,"
US Commerce Secretary Wilbur Ross said.

 

"This multi-pronged action demonstrates our continuing commitment to impede
Huawei's ability to do so."

 

Huawei did not immediately respond to a request for comment. Executives have
previously described American restrictions as "arbitrary and pernicious",
while warning investors that the business would be hurt.

 

In a meeting in May, the tech giant described how US actions since 2019 had
forced it to remake its supply chain, comparing the firm to a plane "riddled
with bullet holes".

 

The US maintains that Huawei's technology could be used by the Chinese
government and has pressured governments around the world - including the UK
- to cut ties with the company, calling it a national security threat.

 

Huawei has contested those claims, arguing that the US is motivated by
economic competition.

 

Soured relations

Monday's move against Huawei is one of many punitive measures the US has
taken against Chinese technology companies in recent months as relations
between the US and China sour.

 

Earlier this month, Mr Pompeo outlined the steps he wants US companies to
take to deal with "untrusted Chinese apps".

 

Mr Pompeo said at the time that apps such as TikTok and WeChat posed
"significant threats to the personal data of American citizens".

 

The US government argues that such apps harvest the data of US citizens and
could be exploited by the Chinese Communist Party, which Beijing has
denied.--bbc

 

 

 

 

Selfridges to offer clothing rental in environmental push

High-end department store chain Selfridges will start offering clothing
rental as part of a number of moves into sustainable fashion.

 

Customers are demanding that businesses take environmental concerns
seriously, said managing director Anne Pitcher.

 

The company is also moving into second-hand clothes, recycling and repair,
she told the BBC's Today programme.

 

While renting clothing for weddings is an established business, doing so for
regular wear is relatively new.

 

Fashion rental companies have sprung up in China, Europe and the US in
recent years.

 

One of the first was New York-based Rent the Runway, which was set up in
2009 to lease designer clothing.

 

Selfridges customers will soon be able to mend clothes, bags, shoes and
jewellery through what the store calls a "repairs concierge service".

 

Prices will depend on the repairs, it said, and can be done on items bought
at the store or elsewhere.

 

Will we soon be renting rather than buying our clothes?

The rental part of the plan will be managed by Hurr Collective, an online
clothing rental company. Outfits can be rented for 4, 8, 10 or 20 days.

 

Customers will also be able to sell used designer wear for store credits at
Resellfridges.

 

'No PR stunt'

Selfridges is owned by the Weston family, which controls Primark through
Associated British Foods.

 

Fast fashion retailers like Primark have been criticised by MPs for
encouraging a disposable attitude to clothing, although the firm insists its
high street shops are better for the planet than online stores.

 

Parliament's Environmental Audit Committee said last year that "the
government must change the system to end the throwaway society".

 

Asked whether fast fashion needs to change, Ms Pitcher told Today: "I think
fast fashion is a very important part of our business, but I think people
are changing and what we have to do is put more value into the shopping
experience."

 

She also insisted that her plans were not just a PR initiative, and that
Selfridges has been on a "sustainability journey" since 2011 when it started
a campaign to protect the world's oceans.

 

She told the BBC Selfridges would "explore new circular business models" of
rent, re-sell, repair and recycle "making us synonymous with
circularity".--bbc

 

 

 

Coronavirus: Japan suffers its biggest economic slump on record

The Japanese economy has shrunk at its fastest rate on record as it battles
the coronavirus pandemic.

 

The world’s third largest economy saw gross domestic product fall 7.8% in
April-June from the previous quarter, or 27.8% on an annualised basis.

 

Japan was already struggling with low economic growth before the crisis.

 

The figures released on Monday are a stark reminder of the severe financial
impact faced by countries around the world.

 

Japan slipped into recession earlier this year following two successive
quarters of economic contraction.

 

Its latest data for the April to June quarter was the biggest decline since
comparable figures became available in 1980 and was slightly bigger than
analysts had expected.

 

One of the main factors behind the slump was a severe decrease in domestic
consumption, which accounts for more than half of Japan's economy. Exports
have also fallen sharply as global trade is hit by the pandemic.

 

The latest data is the third successive quarter of declines for the Japanese
economy, representing its worst performance since 1955.

 

The downturn puts further pressure on a Japanese economy that was already
struggling with the effects of a sales tax hike to 10% last year, along with
typhoon Hagibis.

 

After the slump, hopes of a bounce

Japan is the latest in a string of Asian economies to report drastically
lower second quarter GDP data.

 

That shouldn't be a surprise: no one escaped the reach of the pandemic, and
even if there weren't strict lockdowns put in place, people generally stayed
indoors and didn't spend money.

 

That has a knock-on effect on corporate earnings, as consumers buy less and
so companies earn less.

 

It's a vicious cycle that in turn leads to a lack of confidence about hiring
prospects - which means there's also nervousness about job prospects. All of
that is showing up in the numbers today.

 

Still, now is the time to look to the future and to the possibility of a
rebound.

 

Japan is likely to do better than other economies according to some
analysts. Capital Economics says even though the world's third largest
economy is in the midst of a second wave of infections, its health care
systems aren't overwhelmed, and new cases have started to decline. The
research house says it expects to see third quarter GDP bounce back - and
continue through to next year.

 

Ray of light

After the record contraction most analysts expect Japan's economic growth to
rebound in the coming months.

 

Prime Minister Shinzo Abe has introduced massive stimulus packages aimed to
help cushion the blow of the pandemic.

 

While Japan lifted state of emergency measures in late May, concerns remain
that a recent spike in infections may again hit business and household
spending.

 

China, the world’s second biggest economy, also offers some cause for hope.
Its economy rebounded in the April to June period, with growth of 3.2%.--bbc

 

 

 

 

 

 

 

 

 


 


 


 

 


 

INVESTORS DIARY 2020

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


Lafarge

AGM

Virtual

18 August 2020  | 12pm

 


Companies under Cautionary

 

 

 


 

 

 

 


Bindura Nickel Corporation

 

 

 


Padenga Holdings

 

 

 


Delta Corporation

 

 

 


Meikles Limited

 

 

 


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