Major International Business Headlines Brief::: 22 August 2020

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Major International Business Headlines Brief::: 22 August 2020

 


 

 


 <mailto:info at bulls.co.zw> 

 


 

 


 

 

ü  South Africa's mobile operator Cell C to close 128 stores, 546 jobs
affected

ü  Sun International sells Sun Dreams to partner, ending dispute

ü  Eskom halts power cuts after recovering three coal units

ü  Tiger Brands Chairman Mokhele to step down

ü  Stanbic Bank Uganda reports 7% drop in first-half profit, hit by lockdown

ü  South African rand extends gains versus weak dollar

ü  Nedbank says half year profit will fall by over two-thirds

ü  S.Africa's Gold Fields profit jumps on surging bullion prices

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

ü  US wins end of EU lobster tariffs in mini trade deal

ü  Pandemic 'biggest knock to live music in my life'

ü  Coronavirus forces STA Travel out of business

ü  UK government spending on virus measures pushes debt to £2 trillion

ü  Brexit: UK-EU trade deal 'seems unlikely' says Michel Barnier'

ü  Turkey's Erdogan hails huge natural gas find

ü  UK retail sales climb back to pre-pandemic levels

 


 <mailto:info at bulls.co.zw> 

 


 

South Africa's mobile operator Cell C to close 128 stores, 546 jobs affected

JOHANNESBURG (Reuters) - South Africa’s Cell C said on Friday it expects to
close around 128 stores across the country, with 546 jobs on the line as the
mobile operator moves to cut costs and restructure its operations.

 

“The retail environment has changed and this has been fast-tracked by the
impact of COVID-19 and the evolving purchasing habits of consumers,” Cell C
said in a statement.

 

 

 

Sun International sells Sun Dreams to partner, ending dispute

JOHANNESBURG (Reuters) - Chile’s Nueva Inversiones Pacifico Sur Limitada has
agreed to buy a 64.94% stake in casino operator Sun Dreams for $160 million
from South African partner Sun International to take full ownership of the
business and settle a dispute.

 

The two partners had been locked in a 1.5 billion rand dispute after
Pacifico agreed to buy a 14.94% stake in Sun Dreams but failed to close the
deal.

 

The firms have now reached a settlement that will see Pacifico close that
deal and buy the remaining 50% stake in the Latin American casino operator
from Sun International’s subsidiary, Sun Latam.

 

At 0845 GMT, shares in Sun International, which owns South Africa’s Sun City
resort, were up 7.9%.

 

Stiff competition, fewer available casino licences and consumers feeling the
pinch in South Africa had pushed Sun International to expand abroad.

 

But Sun Dreams faces several challenges, including the need to renew casino
licences, political and social reforms in Chile and the need to secure
funding for its new casino project in Iquique, Chile, Sun International
said.

 

This, plus the impact of the COVID-19 pandemic on the group, and the length
of time, uncertainty and costs associated with arbitration proceedings in a
foreign country, had convinced the firm to sell its stake when presented
with an opportunity to exit at an attractive value, it said.

 

Sun International said the price equated to 5.5 times 2019 earnings before
interest, taxes, depreciation, amortization, and restructuring or rent
costs, which could rise to 6.5 times if Sun Dreams meets certain milestones,
such as licence renewals.

 

Proceeds from the deal will be used to settle Sun International’s offshore
debt in Latin America of $38.3 million, with the balance repatriated to
South Africa, it added.

 

($1 = 17.2959 rand)

 

 

Eskom halts power cuts after recovering three coal units

JOHANNESBURG (Reuters) - South Africa’s Eskom has suspended planned power
cuts, after returning to service overnight three generating units at
coal-fired power stations, the state utility said on Friday.

 

More power cuts had been due on Friday in addition to three on consecutive
days this week, but supply constraints had eased following the recovery of
units at the Lethabo, Medupi and Kusile plants, the ailing utility said in a
statement.

 

Unplanned breakdowns stand at 8,750 megawatts (MW), out of Eskom’s nominal
capacity of 44,000 MW, compared to breakdowns of more than 11,900 MW at one
stage on Tuesday.

 

Eskom’s struggles to power Africa’s most industrialised nation are one of
the main obstacles to economic growth.

 

“Any significant deterioration in the generation performance may necessitate
the implementation of loadshedding at short notice,” Eskom said, referring
to the planned power cuts.

 

 

 

Tiger Brands Chairman Mokhele to step down

JOHANNESBURG (Reuters) - South African food producer Tiger Brands said on
Friday Khotso Mokhele will step down from his position as chairman of the
board with effect from December 31.

 

Mokhele will be replaced by Geraldine Fraser-Moleketi, a lead independent
director at mining firm Exxaro, who will assume the role of chairman from
January 1 after a handover period starting from September.

 

 

 

Stanbic Bank Uganda reports 7% drop in first-half profit, hit by lockdown

KAMPALA (Reuters) - Uganda’s Stanbic Bank reported on Friday a 7.4% decline
in half-year pretax profit, as one of the most sweeping lockdowns in Africa
to curb the coronavirus hit its business.

 

The bank, a unit of South Africa’s Standard Bank, said its profit fell to
169.2 billion shillings ($46 million) in the six months to the end of June,
from 182.8 billion for the same period last year.

 

Uganda implemented one of Africa’s strictest lockdowns to curb the
coronavirus outbreak, including shutting down all businesses but the most
essential across the country.

 

Authorities also stopped travel, closed schools and shut borders to all
except cargo transport.

 

Stanbic’s Chief Executive Anne Juuko, in a statement, said the bank had
waived all charges on transactions on its digital banking platforms to help
boost cashless transactions and potentially minimise coronavirus infection
risk, a measure that hurt revenues.

 

Stanbic also “offered credit relief programmes to business and personal
customers to minimise the impact the pandemic would have on their
businesses.”

 

In addition, the bank lowered its lending rates to ease pressure on existing
customers while encouraging borrowers in a depressed economic environment.

 

The central Bank of Uganda has been putting pressure on commercial banks to
slash lending rates to keep credit flowing to businesses battered by the
effects of the coronavirus.

 

In July, the central bank threatened to cap commercial lending rates saying
some banks had failed to reduce loan rates in response to cuts in benchmark
rates.

 

The regulator has slashed its benchmark rate twice this year, taking it down
to a record low 7%.

 

Juuko said the bank had recorded a 24% rise in the value of new loans in
January-June, compared to the same period last year.

 

($1 = 3,667.0000 Ugandan shillings)

 

 

South African rand extends gains versus weak dollar

JOHANNESBURG (Reuters) - South Africa’s rand extended its recent gains on
Friday as the dollar was on the defensive on worries about the health of the
U.S. economy.

 

At 0625 GMT, the rand was trading at 17.2200 to the dollar, more than 0.2%
stronger than its previous close and on course for gains of around 1% this
week.

 

In the absence of major domestic data releases the rand has moved mainly on
global factors this week.

 

A further easing of the country’s coronavirus lockdown and three days of
planned power cuts by ailing state utility Eskom had relatively little
market impact.

 

A Reuters poll released on Friday predicted that Africa’s most
industrialised economy would contract by 8.0% this year, a slightly more
pessimistic view than official projections.

 

With the outlook bleak, the South African Reserve Bank is seen keeping
interest rates at their current level of 3.50% for much longer than
previously thought.

 

Government bonds were a shade weaker in early deals on Friday, with the
yield on the 2030 instrument up 2.5 basis points to 9.30%.

 

 

 

Nedbank says half year profit will fall by over two-thirds

JOHANNESBURG (Reuters) - South Africa’s Nedbank Group Ltd said on Thursday
that its headline earnings per share (HEPS) for the half year that ended
June would fall between 67% and 72% from the same period last year.

 

HEPS - the main profit measure for South African companies - would be
between 402 cents and 472 cents, it said.

 

Nedbank, which is among the top four lenders in the country, will be
announcing its half yearly results on Aug. 26.

 

 

 

S.Africa's 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.

 

 

 

US wins end of EU lobster tariffs in mini trade deal

The European Union has agreed to eliminate tariffs on US lobster, a key
priority of President Donald Trump.

 

In exchange, the US will halve import taxes on some $160m (£122m) worth of
European goods, including cigarette lighters and certain crystal glassware.

 

The agreement is the first tariff reduction the two economic heavyweights
have agreed in more than two decades.

 

Mr Trump had threatened higher tariffs on European cars if the EU did not
end the lobster duties.

 

In June, he ordered aid for US lobstermen, whose exports have suffered in
part due to deteriorating trade relations.

 

China slapped tariffs on the crustacean as part of the US-China trade
dispute, while in the EU market, the industry has lost ground to competitors
from Canada, after the country signed a 2017 free trade agreement
eliminating Europe's 8% lobster tariffs.

 

The new US agreement, which would drop the lobster tariffs for five years,
still needs approval from EU governments and the European Parliament.

 

'Improving relations'

The US and EU remain at odds on numerous trade issues, including tariffs Mr
Trump imposed on foreign steel and aluminium, European taxes on tech giants
and subsidies for Boeing and Airbus, which have led to tariffs on $7.5bn
worth of European goods.

 

A wider trade deal, which the two sides started discussing last year, has
remained out of reach.

 

"As part of improving EU-US relations, this mutually beneficial agreement
will bring positive results to the economies of both the United States and
the European Union. We intend for this package of tariff reductions to mark
just the beginning of a process that will lead to additional agreements that
create more free, fair, and reciprocal transatlantic trade," US Ambassador
Robert Lighthizer and EU Trade Commissioner Phil Hogan said in a joint
announcement.

 

In 2017, the US exported more than $111m worth of lobster to the EU. Many of
the shipments came from the state of Maine, a political battleground for
Republicans and Democrats.

 

The state narrowly supported Mr Trump's Democratic opponent Hillary Clinton
in the 2016 presidential election, but is represented in the Senate by
Republican Susan Collins, who is facing a tough re-election fight.

 

A request by the US for a deal on lobsters had been rejected by the EU last
year, with Brussels insisting on a broader package, but more recently the
two sides have shown signs of trying to reduce tensions.

 

Earlier this month, the US refrained from a rise in tariffs it had
threatened over European subsidies for Airbus.--bbc

 

 

 

Pandemic 'biggest knock to live music in my life'

As the coronavirus lockdown eases in many parts of the world, record shops
and record labels have been roaring back into life.

 

Respected industry website Music Business Worldwide now reckons recorded
music revenues for 2020 could end up slightly higher than last year.

 

Yet while the business of selling music is looking healthier, the people who
perform it - and those who make live music possible - are still suffering.

 

Gigs remain subject to safety measures and social distancing restrictions,
so venue owners are having to having to think long and hard about when and
how to reopen.

 

In the meantime, one innovative firm has found a new way of bringing live
music to a mass audience.

 

But even preparing to go back on stage is causing huge problems for bands,
as unsung yet vital parts of the industry's infrastructure buckle under the
strain of the pandemic.

 

The rehearsal studio

"This is the biggest knock to live music in my lifetime," says Katya
Stephenson, a director of the Joint studios in London's King's Cross area.

 

"I've been through two recessions and it barely made a difference. Live
music in a recession is often the thing that people resort to. But I've
never seen anything like this. This is something else."

 

For 26 years, the Joint has provided pre-gig rehearsal facilities and
practice rooms to countless big names in the music industry, from the Pet
Shop Boys and Suede to Adele and Sam Smith.

 

Now, however, the premises have been stripped bare and Katya is preparing to
hand the building back to the landlord.

 

Even before the pandemic struck, the business's days were numbered. But when
she realised how big an impact lockdown would have, she knew there was no
point in seeing out her lease until 2021.

 

At the start of this year, the studios were booked up until October. But all
that changed on Friday 13 March.

 

"I came into work that day and I got 40 cancellations in the first hour,"
she told the BBC. "People were already panicking. I went from full to
completely empty within that first week."

 

With tours and festivals cancelled because of lockdown, bands had no need to
rehearse. And all the people whose jobs depend on live music were suddenly
out of work.

 

"I was talking to two tour managers in the space of a day," says Katya. "One
was working as a courier and the other was working as a farm labourer.

 

"I'm closing down and I needed bands to move their equipment, which was
stored in the building. So they had a tiny bit of work moving equipment."

 

The online concert service

So how do bands get back to performing live? And what about the sound and
lighting crews and other people working in the industry?

 

Well, Ric Salmon has come up with a way to help fill the void. He's chief
executive of Driift, a new company set up at the start of lockdown as a way
of making pay-per-view live shows available online.

 

In his other role as a director at ATC Management, he was seeing top clients
such as Nick Cave and Laura Marling having to bail out of global tours with
tens of thousands of tickets sold.

 

"Lots of artists were doing selfie-style Instagram live shows, but with just
an iPhone, there's only so much you can do," he told the BBC.

 

So he hit on an idea: what if you hired a venue, organised a performance
with no audience and a small crew, then sold tickets to watch it being
streamed live?

 

The first show that Driift put on was an acoustic set by Laura Marling at
the Union Chapel in Islington, London. Digital ticket platform Dice agreed
to sell the tickets. But the big question was: how much should they charge?

 

"We knew it would cost £30,000 to do something properly, which was a big
investment and a hefty risk," says Ric.

 

Aiming to break even at least, he set the price at £12, so that after sales
tax, each one would bring in £10. That meant they had to sell at least 3,000
tickets.

 

"In the end, we did more than twice that - 6,500 tickets, for a venue that
holds 800," he says. Further performances followed: Nick Cave, Dermot
Kennedy, Biffy Clyro and next month, Sleaford Mods. About 40 shows are
planned for the next nine to 12 months.

 

Ric sees the Driift model as something new that can complement existing
music business formats. For one thing, filming a live concert without an
audience allows greater access to the performers, with no worries about
camera crews getting in the public's way.

 

And it provides work for professionals in the industry, with up to 70 people
involved in a production.

 

"We realised that the global live music economy had literally frozen," he
says. "This is injecting money back into the live music economy."

 

But what about actual live music events that you physically attend? Those
have been possible again in England since 15 August, but only 16 venues
across the country reopened on that date.

 

One of them was the Sound Lounge in Morden in south London, run by husband
and wife duo Kieron Marshall and Hannah White.

 

The venue normally holds 250 people, but the audience was limited to 50,
with everyone sitting at carefully spaced tables. The audience were allowed
to clap, but dancing and cheering were not permitted.

 

Kieron said: "Hannah performed and we did it as a pilot - we are not up and
running fully yet.

 

"On a realistic level, most venue owners aren't artists. Hannah did it for
free, the bar was run by volunteers and I did the sound."

 

Another venue, the Piano Works in London's Farringdon district, is preparing
to reopen in October.

 

The venue has a six-piece band which plays non-stop music and members of the
audience request their favourite tunes. But as operations director Tristan
Moffat says, handwritten notes to the musicians won't work in the age of
coronavirus.

 

"We're hoping to have a digital platform in place prior to opening, so
requests are no longer on napkins," he told the BBC.

 

But before punters even enter the club, they will have their temperatures
taken and be sprayed with disinfectant in a special tunnel.

 

Clearly there is some way to go before going out to see a band is once again
a normal part of our lives.

 

"Unfortunately, the very last thing to come back in the world will be live
music at any scale," says Ric Salmon of Driift. "We're suffering an
unprecedented scenario."--bbc

 

 

 

 

Coronavirus forces STA Travel out of business

STA Travel has become the latest travel firm to fall victim to the Covid-19
pandemic.

 

The company, which grew out of a student travel business and specialised in
trips for young people, including gap years and volunteer projects, has
ceased trading.

 

STA Travel has more than 50 shops in the UK.

 

The firm said customers with bookings would "receive further communication
in the coming days".

 

"We are sorry for the inconvenience and the limited information available to
you at this time," a statement on its website said.

 

About 500 UK jobs are thought to be at risk as a result of the firm's
failure.

 

The firm's parent company, based in Switzerland, said the pandemic had
"brought the travel industry to a standstill".

 

A spokesperson for the Association of British Travel Agents (Abta) said the
news would "send a shockwave through the industry, bringing to life the very
real pressures that travel is under at the moment".

 

"STA Travel will be a name that is familiar to most people who will have
used them to travel or been aware of their name on the High Street, and this
distressing news will sadly affect the livelihoods of hundreds of
employees," the spokesperson said.

 

Abta says the majority of flights and holidays sold by STA would be
protected by the Atol scheme, an insurance scheme which protects holiday
bookings. It directed customers to its website for further advice.

 

Amelia should have taken her month-long holiday to Bali and Borneo back in
April but, when the pandemic arrived, it was postponed until September.

 

STA Travel told her and her boyfriend last week their trip would no longer
go ahead at all. Now the 22-year-old from Walsall just wants to get her
money back as quickly as possible.

 

"The STA agent said they would offer us credit notes but they would be split
up between the different companies that STA booked all our travel and
accommodation through.

 

"There is no way we would be able to spend all of the credit notes on the
same trip if we did it ourselves.

 

"It's really, really disappointing - we just hope we can get our money back
quickly but I'm not sure we will."

 

The Civil Aviation Authority said it was aware of "a number of consumers
whose bookings have been cancelled by STA Travel Ltd as a result of
government advice or flight cancellations". Customers whose bookings were
protected by Atol would be able to submit a claim through their online
portal, the CAA said.

 

STA Travel, which originally stood for Student Travel Australia, but was
later rebranded Student Travel Association, was founded in 1971, and
specialises in long-haul, adventure and gap year travel.

 

The firm said: "Over recent months, the company took decisive measures to
secure the business beyond Covid-19.

 

"However, sales have not picked up as anticipated, due to consumer
uncertainties, further restrictions and renewed lock-down measures, which
are expected to largely continue into 2021."

 

Simon Calder, travel editor of the Independent, said coronavirus had
particularly hit long-haul specialists like STA, which arranged tailor-made
trips.

 

He said a combination of High Street rents, a lack of income and demands for
refunds was made worse when Australian airline Qantas announced it would not
be running intercontinental flights in or out of Australia until the second
half of 2021.

 

"Clearly the parent company
 had to look at the future and just decided that
there was no chance of business coming back at anything like the necessary
amount before next year," Mr Calder said.

 

He added that "other casualties" were inevitable - particularly with
countries being suddenly added to the UK's quarantine list.

 

"That's generated so much uncertainty that people simply aren't flying," he
said.--bbc

 

 

 

 

UK government spending on virus measures pushes debt to £2 trillion

UK government debt has risen above £2 trillion for the first time amid heavy
spending to support the economy amid the coronavirus pandemic.

 

Spending on measures such as the furlough scheme means the debt figure now
equals the value of everything the UK produces in a year.

 

Total debt hit £2.004tn in July, £227.6bn more than last year, said the
Office for National Statistics (ONS).

 

Economists warned the situation would worsen before improving.

 

Where do governments borrow money?

It is the first time debt has been above 100% of gross domestic product
(GDP) since the 1960-61 financial year, the ONS said.

 

The July borrowing figure - the difference between spending and tax income -
was £26.7bn, down from a revised £29.5bn in June.

 

It was the fourth highest borrowing in any month since records began in
1993. The three higher figures were the previous three months.

 

Those are big figures. What do they mean?

Ruth Gregory, senior UK economist at Capital Economics, said July's
borrowing figure was "another huge sum and pushes borrowing in the year to
date to £150.5bn".

 

"That is close to the deficit for the whole of 2009-10 of £158.3bn, which
was previously the largest cash deficit in history, reflecting the
extraordinary fiscal support the government has put in place to see the
economy through the crisis."

 

Chancellor Rishi Sunak said: "This crisis has put the public finances under
significant strain as we have seen a hit to our economy and taken action to
support millions of jobs, businesses and livelihoods.

 

"Without that support, things would have been far worse.

 

"Today's figures are a stark reminder that we must return our public
finances to a sustainable footing over time, which will require taking
difficult decisions."

 

How did it get to this?

£2 trillion is, obviously, a large amount of money. But in the
circumstances, it was inevitable that government debt would cross that
threshold.

 

Tax revenue has been hit hard by the pandemic as people and businesses earn
and spend less. Government spending on programmes such as the furlough
scheme has headed upwards. So the total amount owed has also increased,
rapidly.

 

But the government's borrowing costs - the interest rates it has to pay -
are low. And some of the extra borrowing in effect ends up with the Bank of
England, which has been buying government debt (known as gilts) in the
financial markets under its quantitative easing (QE) programme.

 

QE is not specifically intended to ease the government's financial strains -
it's meant to stimulate the economy - but it does have that effect.

 

In relation to annual national income, debt has crossed the 100% level.
There's no doubt the government would rather that had not happened.

 

But by that measure, government debt is still far short of the highs it
reached in the aftermath of wars - the two world wars and the Napoleonic
wars more than 200 years ago.

 

Is it surprising?

Carl Emmerson, deputy director of the Institute for Fiscal Studies, told the
BBC's Today programme it was "not really a surprise" that the government was
borrowing a lot of money, given the size of its efforts to support people
hit by the pandemic.

 

However, he added that interest rates were so low that the government was
actually spending less on servicing its debts than had been forecast before
the coronavirus crisis.

 

The ONS cautioned that borrowing estimates were subject to "greater than
usual uncertainty".

 

It said the June figure had been revised down by £6bn, largely because of
stronger than previously estimated tax receipts and National Insurance
contributions.

 

Should we be worried?

Analysts reckon there is worse to come, but that things will get better
after that.

 

However, the sheer size of the debt means that the Treasury will be wary of
doing anything that might make it any worse - and that means there may be
less economic support for ordinary people in future.

 

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, noted that
borrowing remained on course this year to hit its highest share of GDP since
World War Two.

 

"Looking ahead, borrowing looks set to jump temporarily in August, as the
government makes the second and last Self-Employment Income Support Scheme
payment and funds the Eat Out to Help Out scheme," he said.

 

"Thereafter, it will decline, as the Coronavirus Job Retention Scheme, which
cost £6.9bn to operate in July, is wound down ahead of its closure at the
end of October, and firms make a huge VAT payment in March, for sales
generated in Q2, as well as in that month."

 

However, he added that with borrowing for this financial year expected to be
about 17% of GDP, the chancellor was likely to be "relatively cautious" in
his autumn Budget.--bbc

 

 

 

Brexit: UK-EU trade deal 'seems unlikely' says Michel Barnier

A post-Brexit trade deal between the UK and the EU "seems unlikely" at this
stage, the bloc's negotiator has said.

 

Speaking after the latest round of talks, Michel Barnier said he was
"disappointed" and "concerned".

 

His UK counterpart David Frost spoke of "little progress", amid differences
on fisheries policy and state aid rules.

 

The EU has said it would like to agree a deal by October so it can be
approved by the European Parliament before the post-Brexit transition period
expires.

 

The transition period ends on 31 December and, if a deal has not been
secured by then, the UK would have to trade with the EU on WTO (World Trade
Organization) terms.

 

This means most UK goods would be subject to tariffs until a free trade deal
was ready to be brought in.

 

The UK has said it will not extend talks if an agreement cannot be reached
by the December deadline.

 

In a statement released after the seventh round of talks, Mr Frost said the
EU had made it "unnecessarily difficult" to make progress by insisting that
differences over state aid and fisheries have to be resolved before
"substantive work can be done in any other area of the negotiation,
including on legal texts".

 

'Sovereign control'

In a bid to break the deadlock, the UK has presented the EU with a draft
legal text for a free-trade agreement.

 

Mr Frost, who reports directly to Prime Minister Boris Johnson, said the UK
was seeking a deal which "ensures we regain sovereign control of our own
laws, borders, and waters".

 

We were never expecting a big breakthrough this week. But the frustration
and exasperation expressed publicly on both sides underlines how tough
reaching a meaningful deal will be over the next six weeks.

 

For the UK, it's a frustration that the EU is not willing to commit to paper
areas of agreement until the big stumbling blocks - fishing and state aid -
are overcome.

 

For the EU, it's a frustration that the British continue to want the
benefits of the single market - for UK hauliers, for example - without
paying the membership fee or signing up to its rules.

 

Amid the talk of disappointment, time-wasting and a lack of compromise, both
sides insist they do want a deal.

 

I'm told the latest round of discussions were courteous and friendly, with a
warmth between the two chief negotiators facing each other - even if each is
delivering an uncomfortable message.

 

They've been sitting in the other's gaze, but hardly seeing eye-to-eye.

 

"When the EU accepts this reality in all areas of the negotiation, it will
be much easier to make progress," he said.

 

A senior UK negotiating official added that a deal was "still possible but
not that easy to get there".

 

They also said it was "frustrating" that the EU "says Brexit means Brexit...
yet they want us to continue with arrangements as though we were still [an
EU] member".

 

"Frustrating that they want us to move towards their position on fishing and
state aid before doing anything else."

 

'Wasting time'

Speaking at a press briefing in Brussels, Mr Barnier accused the UK side of
"wasting valuable time", suggesting the draft text was "useful" but
downplaying its significance in reaching any agreement.

 

"Too often this week it felt as if we were going backwards more than
forwards," he said.

 

"Given the short time left, what I said in London in July remains true,
today at this stage, an agreement between the UK and EU seems unlikely."

 

While there had been progress on energy co-operation, participation in union
programmes and anti-money laundering, on the subject of access to UK and EU
fishing waters, there had been "no progress whatsoever".

 

He also said the EU's demand for a level-playing field - one of the other
sticking points in negotiations - was "a non-negotiable pre-condition to
grant access to our market of 450 million citizens".

 

A level-playing field is a trade policy term for a set of common rules and
standards that prevent businesses in one country undercutting their rivals
and gaining a competitive advantage over those operating in other countries.

 

The EU has been insistent there should be level-playing field for workers'
rights, environmental protection, taxation and state aid.

 

The next round of talks is due to begin on 7 September in London.--bbc

 

 

 

Turkey's Erdogan hails huge natural gas find

A Turkish drilling ship has discovered a big natural gas reserve in the
Black Sea.

 

President Recep Tayyip Erdogan told reporters that the drilling ship Fatih,
which has been operating in the area since July, had found 320bn cu m (11.3
tr cu ft) of gas.

 

He said it was Turkey's biggest natural gas find to date.

 

If Turkey can extract the gas commercially, it will be able to reduce its
reliance on imported energy.

 

President Erdogan said all tests and engineering work had been completed.

 

He added: "This reserve is actually part of a much bigger source. God
willing, much more will come.

 

"There will be no stopping until we become a net exporter in energy."

 

President Erdogan said he hoped to start extracting the gas by 2023.

 

But energy experts say it could take up to a decade and billions of dollars
of investment to get the gas into commercial use.

 

Turkey has also sent a ship to carry out a drilling survey in the Eastern
Mediterranean.

 

The Oruc Reis left port on 10 August, accompanied by five naval vessels. It
was reported the next day to be sailing in waters between Crete and Cyprus.

 

This has infuriated the Greeks, as they disagree with Turkey over who holds
the rights to certain areas of the Eastern Mediterranean.

 

On Friday, President Erdogan said he intended to accelerate operations in
the Mediterranean.--bbc

 

 

 

 

UK retail sales climb back to pre-pandemic levels

Retail sales rose above pre-pandemic levels in July as a rebound in demand
continued, according to official figures.

 

The Office for National Statistics (ONS) said retail sales volumes rose by
3.6% between June and July.

 

It said sales are now 3% higher than February before the World Health
Organization declared a pandemic and the UK was placed in lockdown.

 

Clothing sales grew last month and people spent more money on petrol.

 

Meanwhile, activity in the UK's manufacturing and service sectors during
August grew at the fastest rate for nearly seven years, according to a
closely watched economic survey.

 

The IHS Markit/CIPS composite purchasing managers' index (PMI), which
measures factors such as new orders and production, gave a preliminary
reading of 60.3, the highest figure since October 2013. A figure above 50
indicates expansion.

 

IHS Markit said the growth in new orders was linked to the reopening of
businesses, alongside "greater willingness-to-spend among UK households".

 

But it said the companies it spoke to "continued to note that levels of
demand remained well below those seen prior to the pandemic".

 

High Street recovery?

July's rise in retail sales was not as pronounced as the previous two
months. In May, retail sales had increased by 12% and in June they had risen
by 13.9%.

 

Sales in clothing shops grew by 11.9% last month while online shopping fell
by 7%.

 

Ruth Gregory, senior UK economist at Capital Economics, said it suggested
that "the recovery in physical shops was more impressive than the headline
figure and that shoppers are starting to return to the High Street".

 

However, the ONS said clothing shops had been "the worst hit during the
pandemic" and the volume of sales remained 25.7% lower than in February.

 

While fuel sales rose by 26.2% between June and July, they remain far below
pre-pandemic levels, down 11.7% compared with February.

 

"Recent analysis shows that in July, car road traffic was around 17
percentage points lower compared with the first week in February, according
to data from the Department for Transport," the ONS said.

 

While "the outlook could feel a little brighter for retailers", said
Emma-Lou Montgomery, associate director at Fidelity International, she also
warned that the pandemic was "far from over".

 

"With the UK now in a recession and many households likely to be tightening
their belts as a result, spending on non-essential items may take a hit in
the coming months, particularly as we approach the end of the furlough
scheme in October."

 

Job cuts

The retail sector has been one of the worst hit by the lockdown to stop the
spread of the coronavirus.

 

Earlier this week, Marks and Spencer announced it would cut 7,000 jobs over
the next three months.

 

It adds to 1,300 job losses at John Lewis and Boots' plan to axe 4,000
roles, while WH Smith has said 1,500 jobs are at risk.

 

The IHS Markit survey of manufacturing and services companies found that
payrolls had shrunk.

 

"Concerns about the speed and duration of the recovery resulted in sustained
job cuts across the private sector during August," it said.

 

"In contrast to the positive trends for output and new orders, latest data
indicated the fastest pace of decline in employment numbers since May."

 

The UK recorded its first recession since the financial crisis when the
economy shrank by a record 20.4% between April and June compared to the
first quarter of the year.

 

A recession is defined at two consecutive quarters of shrinking gross
domestic product. GDP fell by 2.2% in the first three months of this
year.--bbc

 

 

 

 

 

 

 

 


 


 


Invest Wisely!

Bulls n Bears 

 

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Skype:         Bulls.Bears 



 

 

 


 

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
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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<mailto:info at bulls.co.zw> info at bulls.co.zw Tel: +263 4 2927658 Cell: +263 77
344 1674

 


 

 

 

 

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