Major International Business Headlines Brief::: 21 August 2020

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Major International Business Headlines Brief::: 21 August 2020

 


 

 


 <mailto:info at bulls.co.zw> 

 


 

 


 

 

ü  Gold Fields profit jumps on surging bullion prices

ü  Sonae ditches partnership with Angola's dos Santos in Portugal's NOS

ü  Nigeria's revenue rose in July boosted by oil and tax receipts

ü  South Africa's Implats flags more than 300% earnings leap

ü  Standard Bank leaves door open to dividend despite profit plunge

ü  Mr Price expects half-year profit to fall by at least 20%

ü  S.African airports group ACSA gets new funding, shelves projects

ü  Mothercare finalises deal to sell products in Boots

ü  More House of Fraser store closures 'anticipated'

ü  Airbnb puts stock market float back on the table

ü  News publishers fight tech giants for better deals

ü  Lyft and Uber receive reprieve in California employment rights row

ü  Alibaba tells Trump we 'support American brands'

ü  US jobless claims rise back above one million

 


 <mailto:info at bulls.co.zw> 

 


 

Gold Fields profit jumps on surging bullion prices

JOHANNESBURG (Reuters) - South African miner Gold Fields reported a
four-fold jump in half-year earnings on Thursday, benefiting from a surge in
the price of the precious metal.

 

Headline earnings per share for the six months ended June 30 rose to $0.20
from $0.05 a year earlier, although the company said it remained “reasonably
cautious” about the remainder of the year due to the COVID-19 crisis.

 

Record gold prices and a weaker rand have given the South African gold
industry, which has produced a third of the bullion mined in history, a
lifeline after the disruption caused by the pandemic.

 

“A bittersweet respite for gold companies has been the rise in this safe
haven metal to record levels,” said Chief Executive Officer Nick Holland.

 

Gold Field’s production edged up to 1.087 million ounces during the period
from 1.083 million a year ago.

 

Output from Gruyere in Australia, and an additional 10 days of production
due to a realignment of its calendar, offset the impact of COVID-19
stoppages at its South African mine and the Cerro Corona mine in Peru, the
company said.

 

It estimated 42,000 ounces of output was lost due to COVID-19-related
stoppages.

 

Overall, the impact of the pandemic saw South Arica’s mining output contract
for a fourth consecutive month in June, down 28.2% year-on-year, with gold
production 17% lower.

 

Gold Fields, which also has operations in Ghana and the Salares Norte
project in Chile, lowered its 2020 production forecast to 2.20-2.25 million
ounces from 2.275-2.315 million.

 

It declared an interim dividend of 1.60 rand ($0.093) per ordinary share,
equal to the total dividends declared last year and up from the 2019 interim
payout of 0.60 rand per share.

 

Holland said shareholders could expect dividend payouts at the top of the
company’s policy range of 25% to 35% of normalised profit, if prices
remained supportive.

 

“Higher prices mean we earn more, therefore we pay more,” said Holland.

 

($1=17.2787 rand)

 

 

 

Sonae ditches partnership with Angola's dos Santos in Portugal's NOS

LISBON (Reuters) - Portugal’s Sonae has moved to strengthen its position in
local telecoms firm NOS by increasing its stake and ditching a partnership
with Isabel dos Santos, the daughter of Angola’s long-time former president.

 

Sonaecom, part of the Sonae conglomerate, said in a filing late Wednesday it
had dissolved ZOPT, a 50-50 venture with dos Santos that had held a
controlling 52.15% stake in NOS.

 

Dos Santos was named a suspect in a fraud investigation in Angola in January
and her shares in NOS were seized by a Lisbon court in April, depriving ZOPT
as a whole of its voting rights.

 

Dos Santos has repeatedly denied wrongdoing.

 

ZOPT’s assets, including its shares in NOS, will be equally divided between
its shareholders, Sonaecom said in the filing with Portugal’s market
regulator CMVM.

 

Sonae said it in a separate statement it had bought 7.38% of NOS shares from
private bank BPI, and was now the telecom operator’s largest shareholder
with a 33.45% stake.

 

Sonaecom had said in April it would contest the decision to deprive ZOPT of
its voting rights, saying it was “not liable for the debts of its
shareholders”.

 

Dos Santos has sold or been stripped of nearly all her stakes in major
Portuguese firms, with her indirect stake in oil firm Galp now the only one
left unscathed by the scandal.

 

Dos Santos had no immediate comment.

 

The investigation into her relates to alleged mismanagement and
misappropriation of funds during her time as chairwoman of state-owned
Angolan oil company Sonangol.

 

Portugal’s public prosecutor ordered the seizure of her Portuguese bank
accounts in February.

 

In December, Angola froze her stakes in Angolan firms including Unitel, BFA
and ZAP MIDIA.

 

 

 

Nigeria's revenue rose in July boosted by oil and tax receipts

ABUJA (Reuters) - Nigeria’s gross revenues rose to 676.41 billion naira in
July from 653.35 billion naira in June due to higher crude oil sales and tax
receipts, accountant general Ahmed Idris said.

 

The price of oil, Nigeria’s main export, fell sharply early this year as the
coronavirus outbreak hit demand, cutting government revenues, weakening the
naira and creating a large financing gap for the country.

 

The global oil benchmark Brent has since recovered from a 21-year low below
$16 in April. OPEC member Nigeria relies on crude oil sales for two-thirds
of government revenue.

 

The government said oil revenues with sales tax increased in July, while
corporate taxes and import duty decreased. The government also said the
balance on its oil surplus savings account stood at $72.41 million as at
Aug. 19.

 

Income from crude sales and value added tax (VAT) made up the bulk of the
government’s gross revenues.

 

Companies in Nigeria have seen profits slump especially in the second
quarter when the government imposed a lockdown to slow the spread of the
virus. Also, restrictions on international travel and dollar shortages have
hurt imports.

 

In February, Nigeria increased VAT to 7.5% from 5% to boost revenues, seen
among the lowest in the world. Lower government revenues could worsen
Nigeria’s debt to revenue ratio this year.

 

 

 

South Africa's Implats flags more than 300% earnings leap

JOHANNESBURG (Reuters) - South African miner Impala Platinum (Implats) on
Thursday flagged a more than 300% surge in annual earnings, boosted by an
increase in metals prices and a weaker rand currency.

 

The platinum miner expects headline earnings per share (HEPS) for the year
ended June to be between 20.07 rand ($1.17) and 20.84 rand per share, or
374% to 393% higher, compared with 4.23 rand a year earlier.

 

HEPS is the main profit measure used in South Africa.

 

Higher platinum group metals prices (PGM) have boosted profits for South
African platinum miners, the world’s top producer of the metal, despite
COVID-19 restrictions and a lockdown that temporarily shut operations.

 

Implats said during the period it had delivered production volumes at the
top-end of its previous guidance given in June of 2.77 million to 2.795
million ounces.

 

Overall, the pandemic impact saw the country’s total mining output contract
for a fourth consecutive month in June, down 28.2% year-on-year, with PGM
production 42.5% lower.

 

Implats’ gross profit is expected to increase to 23 billion rand in the
period from 7 billion rand a year ago, despite an expected 5% decline in
refined and saleable PGM’s to 2.8 million ounces relative to the comparable
period.

 

The company is expected to report its full-year results on September 3.

 

($1 = 17.2237 rand)

 

 

 

Standard Bank leaves door open to dividend despite profit plunge

JOHANNESBURG (Reuters) - South Africa’s Standard Bank reported a 43% drop in
half-year profit on soaring bad loans but said sound that its capital
position will allow for a final dividend.

 

Africa’s largest bank by assets said the fallout from the COVID-19 pandemic
led to a near-tripling in impairment charges for bad loans to 11.3 billion
rand ($654.2 million) in the first six months of the year compared with the
same period in 2019.

 

That dragged headline earnings per share (HEPS) to 473.8 cents ($0.2742),
down from 837.4 cents a year earlier and in the middle of a forecast range
of 418.7-586.2 cents. HEPS is the main profit measure in South Africa.

 

CEO Sim Tshabalala said the results reflected the “most difficult six months
in living memory” and once-in-a-century economic conditions.

 

As well as rising bad debts, the coronavirus has also prompted rapid
interest rate cuts and falling fee income in South African banks’ domestic
market, which was already delivering very slim profit growth after the
economy tipped into recession at the end of 2019.

 

Standard Bank warned that more provisions against bad debt could be required
but its capital position remained robust. Its common equity tier 1 capital
adequacy ratio - a key measure of banks’ financial strength - stood at 12.6%
on June 30, well above the regulatory minimum.

 

Its capital position leaves open the possibility of a full-year dividend in
March, CFO Arno Daehnke told investors, adding that this would depend on
discussions with the central bank after it had advised lenders to halt
payouts to preserve capital during the coronavirus crisis.

 

Standard Bank shares fell slightly at market open and were down 0.9% by 0932
GMT.

 

 

 

Mr Price expects half-year profit to fall by at least 20%

JOHANNESBURG (Reuters) - South African retailer Mr Price said on Thursday
its half-year profit would fall by at least 20% due to the impact of the
coronavirus, sending its shares down 3.75% at the market open.

 

The clothing and homeware retailer said group total sales in the 20 weeks to
Aug 15 were down 19.2%.

 

It said its headline earnings per share (HEPS) for the period would likely
fall by at least 88.6 cents ($0.0514) from the 443.2 cents a year earlier.

 

HEPS is the main profit measure in South Africa.

 

“Performance exceeded internal expectations and the group has gained market
share for four months in a row to June,” the company said in a trading
statement.

 

The retailer reported a 10.4% fall in full-year earnings in June.

 

($1 = 17.2484 rand)

 

 

 

S.African airports group ACSA gets new funding, shelves projects

CAPE TOWN (Reuters) - South Africa’s state-controlled airports company ACSA
has signed a new 3 billion rand ($174 million) loan with domestic banks and
shelved major projects to shore up its finances in the coronavirus crisis,
its finance chief said on Thursday.

 

Since March, when South Africa declared a state of disaster to contain the
COVID-19 pandemic, major domestic airports such as the continent’s busiest,
OR Tambo in Johannesburg, have closed, knocking revenue at Airports Company
SA (ACSA).

 

“We’ve got facilities of 3 billion rand confirmed,” Chief Financial Officer
Siphamandla Mthethwa told Reuters.

 

The deal with Standard Bank, Rand Merchant Bank and Nedbank doubled an
existing 1.5 billion rand overdraft-type facility up for renewal in June, he
said, adding further easing of lockdown restrictions this week to allow
inter-provincial leisure travel would help.

 

ACSA, which is 74%-owned by the government and counts pension fund manager
Public Investment Corporation as its second-biggest shareholder, told
lawmakers in May it needed National Treasury support to finance up to 11
billion rand of new debt by 2025.

 

But Mthethwa said on Thursday this sum was a “worst case” projection over a
six-year period and the more relevant number was 3.5 billion rand that ACSA
needed by 2023.

 

“So the nature and form of this support is not confirmed, it is at a
sensitive stage and we cannot say whether we are getting a guarantee, an
equity injection, or some form of debt,” he said.

 

ACSA, downgraded by ratings agency Moody’s in June for the second time this
year, has slashed its three-year capital expenditure bill to 2.8 billion
rand from a previously projected 17.6 billion, Mthethwa said, after shelving
a new runway and terminal planned at Cape Town international airport and
similar large upgrades at OR Tambo.

 

The company, which also holds concessions at Sao Paulo’s Guarulhos
International Airport and Chhatrapati Shivaji International Airport in
Mumbai, is on track to sell its 10% stake in Mumbai to an unidentified
buyer, said Mthethwa.

 

“We have set ourselves a target of June 2021 as the latest we need to
conclude the transaction,” he said.

 

($1 = 17.2733 rand)

 

 

 

Mothercare finalises deal to sell products in Boots

Baby goods firm Mothercare, which closed all its UK shops in January, says
it has finally completed a franchise deal with Boots.

 

The pharmacy chain will sell Mothercare-branded clothing and home and travel
products, such as pushchairs and car seats, at branches and online.

 

The deal was first announced in December last year, but was repeatedly
delayed by the coronavirus pandemic.

 

It will run in the UK and Ireland for an initial period of 10 years.

 

Mothercare said it would take effect from the autumn season.

 

"Boots is at the heart of one of the largest healthcare businesses in the
world and Mothercare will dovetail well as the specialist brand for parents
and young children in both Boots stores and online," Mothercare said in an
update on its restructuring plan.

 

Mothercare's UK business went into administration in November last year and
all its 79 UK outlets were subsequently closed.

 

However, there are still 800 stores in 40 other territories, all operated by
franchise partners.

 

Mothercare said it had signed a new 20-year deal with its biggest franchise
partner, the Alshaya Group, which operates Mothercare stores in Russia and
10 Middle Eastern countries.

 

It said that the restructuring of its UK business had substantially reduced
its debts, but estimated that it still had outstanding obligations worth
about £10m.--BBC

 

 

 

More House of Fraser store closures 'anticipated'

More House of Fraser closures are "anticipated" and the department store
chain's owner warned of continuing job losses on the High Street.

 

The chain, part of Mike Ashley's Frasers Group that owns Sport Direct, has
closed about 10 of the 59 stores bought out of administration in 2018.

 

Frasers said it could not say how many would close as rent negotiations were
continuing with landlords.

 

But the group's finance boss told the BBC the High Street is still
suffering.

 

Frasers Group, whose other brands include Evans Cycles, Jack Wills and
Flannels, reported annual pre-tax profits down 20% to £143.5m as lockdown
store closures led to "the most challenging year" in its history.

 

However, group revenue rose 6.9% to £3.96bn helped by acquisitions. The
company also said it was seeing "a semblance of normality" returning to
trading, although there was a warning that this could be hit by any further
lockdowns from a second Covid-19 wave.

 

More shop closures could not be ruled out, it said, as it invests £100m
online operations following a shift in consumer buying habits during
lockdown.

 

The group highlighted the continuing threat to House of Fraser outlets.

 

"There are anticipated to be further closures over the coming period, the
number of which will depend on the outcome of lease negotiation," Frasers
said.

 

'Insanity'

Chris Wootton, finance director of Frasers Group, told BBC Breakfast: "The
High Street as a whole is absolutely in a mess. Business rates certainly
contribute to that."

 

Next April, the government moratorium on business rates ends, and they
return to normal levels based on values assessed in 2015. Mr Wootton called
that "insanity".

 

"Unless the government does something, thousands and thousands of jobs and
businesses will go. House of Fraser was paying double, treble, quadruple the
rates they should be, and that's not sustainable."

 

Frasers Group has now reopened the majority of its stores after lockdown,
while online sales were described as being "strong".

 

The company also renewed its attack on the management of Debenhams during
the High Street crisis. The chain is now in administration for the second
time.

 

There were reports last week that Mr Ashley, who saw a near £150m investment
in Debenhams wiped after the first administration, is interested in taking
on 30 stores.

 

"We continued to follow the further demise of Debenhams during the year with
much frustration and disappointment as it entered administration for a
second time," Frasers said in a statement.

 

"We raised our concerns and gave numerous warnings about what we were seeing
there, much of which has materialised. Our offers of help were repeatedly
disregarded and it is scandalous that this business has now been in
administration twice."

 

Talking to the BBC, Mr Wootton declined to be drawn on buying Debenhams. "We
look at things with varying degrees of seriousness."

 

'Chaotic situation'

Publication of Frasers Group's results was delayed a week, which the company
said was due to finalising the figures in accordance with new accounting
rules. The results were also delayed last year.

 

On Monday, it was disclosed that chairman David Daly had bought a small
parcel of shares "in error" during the closed period when directors are not
allowed to trade.

 

Despite it being "another chaotic situation" for Frasers, said Global Data
retail analyst Emily Salter, the company's reorganisation appeared to be
paying off.

 

Analysts at Liberum described the profit numbers as "robust" and pointed to
further growth over the next 12 months.

 

However, Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said that
despite the "decent set of results", Mr Ashley still had to show how he
planned to re-organise Frasers' array of brands for the future.

 

"Exactly how all the pieces of Ashley's High Street puzzle fit together
remains to be seen," she said. "Getting the stores where they need to be,
and securing long-term, sustainable growth is going to take a while, and a
lot of money."

 

Shares in Frasers, down a third so far this year, had jumped 14% by
mid-morning on Thursday.--BBC

 

 

 

Airbnb puts stock market float back on the table

Airbnb has announced plans to list on the stock market as concerns over the
impact of the coronavirus ease.

 

The short-term letting platform previously planned an initial public
offering (IPO) for earlier this year but it appeared to be on hold.

 

Airbnb is now moving forward after filing confidential registration
documents with US market regulators.

 

If the stock market listing goes ahead this year it would be one of the
biggest share sales of 2020.

 

The home sharing site joins a host of companies looking to go public in the
coming months amid a wave of renewed investor confidence.

 

US stock markets have surged in recent months, with the benchmark S&P 500
index hitting a record high this week.

 

Many analysts have predicted a swift economic recovery after the severe
disruption caused by coronavirus lockdowns.

 

Shares in online travel agency Booking Holdings have bounced back by about
14% in the last three months although they remain down on the year.

 

 

Airbnb hasn’t given any more details on the timing of the stock market debut
or how much money it hopes to raise.

 

In April Airbnb raised $2bn (£1.5bn) from investors, which valued it at
$18bn. That was well below the $26bn the firm cited as an internal valuation
in early March and is likely to reflect the impact of the pandemic on the
business.

 

Airbnb has been hit hard by travel restrictions and in May announced it was
shedding 25% of its staff.

 

The company also said it would scale back or halt newer initiatives, such as
investments in hotels and luxury resorts and flights.

 

When the job cuts were announced chief executive Brian Chesky said it was
not clear when travel would return or what it will look like when it did.

 

"While we know Airbnb's business will fully recover, the changes it will
undergo are not temporary or short-lived" he said.-BBC

 

 

 

News publishers fight tech giants for better deals

Technology giants are facing calls from news publishers for a better share
of revenues from Australia to America.

 

US news outlets, including the New York Times, have asked Apple to reduce
the cut it takes when subscriptions are taken out on its app store.

 

Earlier this week Google clashed with an Australian watchdog that wants it
to pay more for the news content it uses.

 

As online firms like Apple and Google have grown, many news providers are
struggling to survive.

 

Digital Content Next (DCN) - a trade body which represents the New York
Times, the Washington Post and the Wall Street Journal - wrote to Apple
chief executive Tim Cook on Thursday.

 

The major US publishers are asking for better terms when people take out
subscriptions to their news platforms via Apple’s app store.

 

The iPhone maker currently takes a commission from publishers of between 15%
and 30% for first-time subscriptions.

 

However, DCN points out that Amazon enjoys a reduced rate from Apple as it
meets certain conditions.

 

News publishers want to know what these requirements are so they can be
offered the same terms, according to the letter written by DCN chief
executive Jason Kint.

 

Apple is also involved in a dispute with Epic Games, the makers of the
popular Fortnite video game over revenue it earns from its app store.

 

The gaming firm has started legal action after being taken off Apple's app
store following the fallout. Epic Games is unhappy about the 30% cut Apple
takes when players make in-game purchases via the app store.

 

Google under pressure

 

Fellow tech giant Google is currently involved in a battle with Australia’s
competition watchdog over the payment of news content it uses on its site.

 

The Australian Competition and Consumer Commission (ACCC) has published
draft legislation which called on internet firms such as Facebook and Google
to pay for the content they repost.

 

Google attacked the proposals this week saying its YouTube and Search
features could be "dramatically worse" if new rules were brought in.

 

This relates to a recommendation from the ACCC that Google shares more data
with publishers about its users, and alerts them when it changes its
algorithms.

 

While Google says it does pay for some news content it uses, the Australian
regulator wants to “level the playing field” so publishers can negotiate
these rates.

 

Paying for content

 

Some business experts argue that it’s only fair that the search engine giant
pays publishers for their quality news content that it reposts.

 

“Low quality ‘headline’ news will probably always be free, but added value
journalism has a significant cost and if that cost cannot be monetised, it
will be devalued or it will disappear,” warned Michael Wade, a professor at
the IMD Business School in Switzerland and Singapore.

 

“Google, Facebook and others have been getting away with giving it away for
free for too long,” Professor Wade told the BBC.

 

Google says it is currently working on a global licensing programme to pay
publishers for high-quality content that it hopes to roll out later this
year.

 

This will help publishers monetise their content and “lets people go deeper
into more complex stories, stay informed and be exposed to a world of
different issues and interests,” said Google spokesman Brad Bender.

 

“The very content creators that have done so much for Google are in danger
of extinction if Google doesn’t do a better job of sharing the gains from
its technology with the actual content creators,” added financial technology
entrepreneur Dr. Richard Smith.--BBC

 

 

 

 

Lyft and Uber receive reprieve in California employment rights row

Uber and Lyft have been granted a reprieve in a row over drivers' employment
rights in California after a court granted an emergency injunction.

 

The ride-hailing firms had threatened to suspend operations over an earlier
ruling that they must classify drivers as employees, not contractors.

 

But the reprieve allows them to continue operating while the court considers
their case for appeal.

 

The court's decision came just hours before Lyft was due to halt rides.

 

The court has ordered Uber and Lyft to both submit their plans for hiring
employees by early September, and oral arguments in the case are set for
mid-October.

 

Lyft was due to stop its services in California at 23:59 local time on
Thursday (06:59 GMT on Friday).

 

"This is not something we wanted to do, as we know millions of Californians
depend on Lyft for daily, essential trips," Lyft had said in a statement
posted online.

 

What happened?

Both firms have always argued their drivers are self-employed contractors.

 

But a California law that came into effect earlier this year, known as AB5,
extended employee classification to workers in the "gig economy".

 

The judge's ruling that the law applied to both Uber and Lyft means the
firms need to provide drivers with extra benefits, such as unemployment
protection.

 

Both companies filed an appeal to the judgement - and asked for a stay on
its enforcement while the courts dealt with the appeal.

 

Unless the stay was granted, both companies had 10 days to undertake what
they saw as a significant overhaul of their business in California.

 

They both warned that they could be forced to pull services from the state
at the end of the day on Thursday.

 

What did the firms say?

Lyft claims that four out of five of its drivers do not want to be
classified as employees. Both argue that flexibility is valued by those who
choose to work for them.

 

The two firms had been emailing customers and sending app push notifications
to try to drum up support for their side of the argument.

 

Uber chief executive Dara Khosrowshahi, meanwhile, wrote an opinion piece
for the New York Times, arguing that his firm was not truly against paying
the costs of things like health insurance.

 

Instead, he argued that the choice between being a full-time employee and a
"gig" worker was a problem itself, and laws needed to be changed. He argued
for a system where companies pay benefits based on a rate per hour worked.

 

 

Media captionTwo Uber drivers take opposing views on how the company should
treat them

But he has also said that the company can only offer full jobs to a tiny
fraction of its workforce. In a podcast interview with Vox Media, he summed
up the problem as: "We can't go out and hire 50,000 people overnight."

 

Lyft echoed that sentiment, telling the court that it "cannot make the
changes the injunction requires at the flip of a switch".

 

The companies do have some outside support.

 

Some drivers do not want to be classed as employees, and the mayors of San
Diego and San Jose - one Democrat and one Republican - joined forces to warn
that shutting down the services "virtually overnight" would hurt one million
residents in the state.

 

What happens next?

There is a potential way out for the ride-sharing firms in the coming
months.

 

A ballot that will be put to vote in November, at the same time as the US
presidential election, would grant Uber and Lyft an exemption from the law.
It is known as proposition 22.

 

"Your voice can help," Lyft wrote in its blog post about suspending
services.

 

"Prop 22, proposes the necessary changes to give drivers benefits and
flexibility, while maintaining the rideshare model that helps you get where
you need to go," it said.

 

Both companies, along with other supporters such as food delivery app
DoorDash, are reported to have spent millions of dollars in lobbying and
campaigning for the law.

 

Labour groups, meanwhile, are set firmly against it, arguing it will save
the companies vast sums of money at the expense of drivers.--BBC

 

 

 

Alibaba tells Trump we 'support American brands'

Alibaba has moved to ease tensions with Donald Trump, as the US president
continues to threaten Chinese firms.

 

Chief executive Daniel Zhang said the online retailer's policies "support
American brands, retailers, small businesses and farmers".

 

The comments came as the tech giant announced a better-than-expected jump in
quarterly sales.

 

Meanwhile Mr Trump has promised to impose tariffs on US firms that refuse to
move jobs back from overseas.

 

Earlier this month US Secretary of State Mike Pompeo called on American
technology firms to cut ties with Chinese companies, including
cloud-computing providers Alibaba, Tencent and Baidu as part of the Trump
administration's so-called "Clean Network" programme.

 

It came as Mr Trump signed two executive orders targeting Chinese-owned
video-sharing app TikTok and messaging platform WeChat.

 

"Alibaba's primary commercial focus in the US is to support American brands,
retailers, small businesses and farmers to sell to consumers and trade
partners in China as well as other key markets around the world," Mr Zhang
told investors.

 

"We are closely monitoring the latest shift in US government policies
towards Chinese companies which is a very fluid situation. We are assessing
the situation and any potential impact carefully and thoroughly, and will
take necessary actions to comply with any new regulations," he added.

 

At the same time the Hangzhou-based company said sales from its commerce
business rose 34% in the three months ending in June, compared to a year
ago.

 

Alibaba's shares have soared by more than 20% this year as investors around
the world poured money into technology companies seen to have benefited from
people staying at home during the coronavirus pandemic.

 

Alibaba's strong results mirror China's economic rebound post the pandemic.

 

In fact, the company said as much during its earnings call - attributing the
jump in revenue to China's "effective management" of the outbreak in much of
the country.

 

But there's also the fact that the coronavirus fundamentally changed
consumer behaviour in China.

 

In the midst of lockdowns, people flocked online to buy things like yoga
mats and face masks.

 

Since then, as Chinese consumers came out of quarantine, there was a big
rise in, for example, cosmetics sales.

 

But the pandemic also pushed more people online to buy their groceries, and
it's a trend that's continued in a post-coronavirus China.

 

Still a rebound isn't a recovery - yet. And while Alibaba's recovery depends
mainly on the fortunes of the Chinese market, tensions between Beijing and
Washington will weigh on both its and China's growth prospects.

 

Trump's China crackdown

The placatory comments from Alibaba's boss came in a week that has seen Mr
Trump using his election campaign speeches to threaten further action to
push back against China.

 

At an event in Pennsylvania on Thursday he said that if he is re-elected,
Washington will impose tariffs on American companies that refuse to move
jobs back to the US.

 

"We will give tax credits to companies to bring jobs back to America, and if
they don't do it, we will put tariffs on those companies, and they will have
to pay us a lot of money," he said.

 

That came on top of the president's pledge earlier this week to offer tax
credits to entice US firms to move factories out of China.

 

He also threatened to strip US government contracts from companies that
continue to outsource work to China.--BBC

 

 

 

US jobless claims rise back above one million

The number of Americans seeking unemployment benefits unexpectedly climbed
back above one million last week, official figures show.

 

The US Labor Department said claims rose to 1.1 million, ahead of
economists' forecasts of 925,000.

 

The rise came as US President Donald Trump faces increased pressure over his
handling of the health crisis.

 

Coronavirus infections continue to spread across the US, prompting local
authorities to restrict businesses.

 

The number of people claiming jobless benefits had fallen in the prior two
weeks. Most recently, it dipped below one million to 971,000 for the first
time since March in the week to 8 August,

 

But economists have warned that the recent jobs improvement is at risk of
stalling, as health concerns drive people to limit their activity and
spending even as reopening continues.

 

"Today's rise in initial jobless will disappoint the market, especially
following last week's promising data," said Richard Flynn, UK managing
director at stock broker Charles Schwab.

 

"While hard-hit industries brought workers back in July, the level of
weakness remains unprecedented, and the impact of virus-related rolling
shutdowns could continue to reverse some of that improvement."

 

'Not healthy'

The US economy suffered its sharpest economic contraction in more than 70
years of record keeping in the April-June period, shrinking at an annual
rate of 33%.

 

Although the unemployment rate has fallen from the 14.7% high in April as
businesses open and activity resumes, the 10.2% rate recorded in July
remains higher than any month during the financial crisis.

 

This data doesn't feel like the V shaped recovery that President Trump and
the Republicans are banking on.

 

With the number of Americans filing for unemployment back into seven digits
after two weeks of declines, the jobs market is a reflection of the
upheavals facing the world's largest economy.

 

And yet at this key inflection point, Congress is still divided over the
next relief package that might help many Americans who lost their jobs when
the US shut down to halt the spread of the coronavirus.

 

Republicans want a smaller package. They point to improvements in the
economy: the S&P 500 hit a record high this week, retail sales have
rebounded and home building is strong.

 

Yet many people don't feel better. Thousands of businesses are still closed.
The unemployment rate is above 10%. And food insecurity is on the rise.

 

President Trump issued an executive order this month that provided $300 a
week in additional unemployment benefits after a $600 a week payment
approved by Congress expired in July. But the aid is limited and in some
states is only expected to last three weeks.

 

With the recovery far from assured, most economists warn that now is not the
time for the federal government to pull back.

 

More than 28 million people - nearly one fifth of the American workforce -
were collecting some form of unemployment payment in the week ended 1
August.

 

"The number of individuals claiming benefits remains extraordinarily high -
more than twice the peak of the Great Recession - underscoring that the
labour market is a long way from being healthy," said Nancy Vanden Houten,
lead US economist at Oxford Economics.

 

Talks in Washington about further economic aid for people collapsed this
month without a deal.

 

The lack of agreement meant that an extra $600 weekly top up that Congress
approved for unemployment benefits during the pandemic expired at the end of
July.

 

Analysts have warned that the removal is likely to further hurt the US
economic recovery, which relies on consumer spending.

 

Democrats have called for more than $3tn in further spending - a figure
Republicans have rejected as too high.

 

The stand-off puts Mr Trump, who is up for re-election in November, in a
potentially perilous position.

 

While polls suggest that voter approval of his handling of the economy
remains relatively strong, Democrats are blaming him for the crisis.

 

"Trump's ignorance and incompetence have always endangered our country.
COVID-19 was his biggest test—and he failed miserably, "said Senator
Elizabeth Warren on Twitter. "America has the most COVID-19 deaths in the
world and an economic collapse—and both crises are falling hardest on Black
and Brown families."

 

Mr Trump has said he supports further aid, and used his power to try boost
unemployment payments.

 

But his orders do not fully replace the $600 bonus and have not been
extended everywhere, since the programme would need support from local
authorities.--bbc

 

 

 

 

 

 

 


 


 


Invest Wisely!

Bulls n Bears 

 

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INVESTORS DIARY 2020

 


Company

Event

Venue

Date & Time

 


RTG

AGM

Virtual

24 August 2020 | 12pm

 


SeedCo International

AGM

Virtual (https://eagm.creg.co.zw/eagmzim/Login.aspx#)

26 August 2020 | 9am

 


SeedCo

AGM

Virtual (https://eagm.creg.co.zw/eagmzim/Login.aspx#)

28 August 2020 | 9am

 


Companies under Cautionary

 

 

 


 

 

 

 


Bindura Nickel Corporation

 

 

 


Padenga Holdings

 

 

 


Delta Corporation

 

 

 


Meikles Limited

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 


DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of
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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
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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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