Major International Business Headlines Brief::: 17 February 2020

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Major International Business Headlines Brief::: 17 February 2020

 


 

 


 <http://www.nedbank.co.zw/> 

 


 

 


 

 

ü  Peter Moyo files urgent application to stop Old Mutual from appointing a
new CEO

ü  Europe, Not Doing So Well

ü  Two British Airways executives step down following the airline's first
strike in decades

ü  Nigeria offers longer-term naira contracts to lure investors, shore up FX
reserves

ü  Mozambique's economy grew 2.03% in Q4 - statistics office

ü  Sudan inflation jumps to 64.3% in January

ü  Tesla: German court halts work on new 'Gigafactory'

ü  Grant Shapps: Government 'not involved' in China-HS2 talks

ü  Heathrow Airport apologises for IT failure disruption

ü  Mark Zuckerberg: Facebook boss urges tighter regulation

ü  Washington increases tariffs on aircraft after EU subsidy row

ü  Global fashion industry facing a 'nightmare'

ü  German economy barely grows at end of 2019

ü  RBS Group to change its name to NatWest

ü  Tesco told not to block rival supermarkets

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

Peter Moyo files urgent application to stop Old Mutual from appointing a new
CEO 

Former Old Mutual CEO Peter Moyo has filed an urgent court application to
prevent the financial services company from appointing a permanent CEO amid
an ongoing legal battle.

 

Moyo's attorney, Eric Mabuza, confirmed to Fin24 on Sunday that the
application was filed at the Johannesburg High Court on Friday. The matter
is set to be heard on March 10.

 

In a statement issued on Sunday evening, Old Mutual said it had received the
urgent application by Moyo to interdict the company's process to recruit a
permanent CEO. 

 

"Old Mutual will first consider advice from our legal team before deciding
our next steps. Old Mutual has until 20 February 2020 to file a notice of
opposition to the application.

 

"Old Mutual regrets that we are being drawn into yet another round of court
proceedings by Mr Moyo. We confirm that we will continue to act responsibly,
remain focused on our core business and protect the interests of Old Mutual
and its stakeholders," the statement read. 

 

This latest application has added another twist in the long-running legal
wrangle between Old Mutual and its former head which started back in May
2019 when Moyo was suspended. In June 2019, Old Mutual dismissed him citing
a breakdown in trust and a conflict of interest related to NMT Capital, a
boutique investment firm Moyo co-founded.

 

Moyo then legally challenged his dismissal and Judge Brian Mashile in July
ordered that he be reinstated, pending the outcome of the second part of
Moyo's application in which he seeks a damages claim for reputational harm.

 

Old Mutual, in turn, appealed the ruling. On January 14 a court ruled in
favour of the company, which also allowed it to appoint a new CEO.

 

At the time Moyo said his legal team would take the matter to the Supreme
Court of Appeal in Bloemfontein. According to Mabuza, leave to appeal at the
SCA suspends the high court's judgment of January 14, which means Old Mutual
cannot appoint a permanent CEO pending the outcomes of the case.

 

READ: Old Mutual vs Moyo: The battle is far from over

 

Mabuza said his client was forced to do it because Old Mutual wants to go
ahead with a new appointment. He said that they had written to Old Mutual
earlier in February to stop the company from going ahead with a new
appointment, but Old Mutual "did not heed" their call.

 

"Everyone knows if you put in an application for leave to appeal, the
judgment is suspended," Mabuza said.--fin24

 

 

 


 <mailto:info at bulls.co.zw> 

 


Europe, Not Doing So Well

Summary

The growth rate of the eurozone came in at 1.2 percent in 2019 and the
European Commission is projecting that growth will drop to 1.1 percent in
2020.

 

Not only are there economic problems hindering the improvement in their
economies, there is growing political in the three largest members, Germany,
France, and Italy.

 

And, these observations do not include what might possibly occur because of
the spread of the coronavirus coming from China.

 

The Eurozone is just not doing so well.

 

As today’s lead editorial of the Financial Times puts it,

 

“The eurozone poses a conundrum.”

 

The cause is both economic and political.

 

“Recent figures suggest it is teetering on the brink of recession.
Challenging conditions for manufacturers — partly brought on by trade
tensions — ensured stagnation in Germany, the bloc’s largest economy, in the
final quarter of last year.“

 

But, the government of Angela Merkel, German Chancellor, appears to be
falling apart: unfortunate for a leader that did so much for Germany, and
Europe. Ms. Merkel is apparently facing the fact that she may not be able to
finish out her final term in office.

 

“France, the second-biggest, shrank, due to disruptive strikes over pension
reforms.”

 

And, Emmanuel Macron, French president, is facing all kinds of pressures
hindering his efforts to reform the France and its economy. Mr. Macron
continues to lose members of his governing coalition, not helping his
overall attempts to govern.

 

And, “Italy’s economy went backwards too, setting up the possibility of its
third recession in a decade.”

 

Politically, what can be said about the status of the Italian government,
still in chaotic balance.

 

And, the value of the Euro has been suffering, dropping to its lowest level
in several years.

 

Matthew Rocco writes in the Financial Times,

 

“’What’s interesting is that the market consensus has been forecasting a
recovery for the euro since early 2018 and it has consistently been wrong,’
said Jane Foley, head of currency strategy at Rabobank. ‘This is not just
about the coronavirus, this is a euro story,’ she added, noting that
investors have been spooked by weakness in eurozone data, particularly
coming out of Germany, as well as a turbulent political backdrop.’”

 

The eurozone, as a whole, grew by 1.2 percent in 2019, down from 1.9 percent
in 2018.

 

The European Commission is forecasting this rate to drop to 1.1 percent in
2020.

 

The largest country in the eurozone, Germany, posted only a 0.6 rate of
growth for 2019, down from 1.5 percent the year before.

 

Germany ended the year with a no-growth fourth quarter, down from a 0.2
percent rate of growth in the third quarter.

 

Martin Arnold reported that the year ended on an even more dismal note.

 

“Unexpectedly weak December industrial production figures published earlier
this week showed the biggest monthly fall in almost four years. That
followed a 1.6 per cent drop in eurozone retail sales in December, the
steepest monthly fall for a decade.”

 

And, the political situation does not make the situation any better. With
governments in chaos or crumbling, little or nothing is going to get done to
create positive policies to work against these pressures.

 

Furthermore, nothing here is mentioned about the Chinese virus invasion. No
one really knows just how much of an impact the spreading virus will have on
the overall situation. There are a growing number of stories about how
German car manufacturing is being disrupted by the supply chain problem is
heavily dependent upon Chinese sources. More disruption may be coming.

 

The only positive thing economists and other analysts are talking about
these days is the room that the European Central Bank has to stimulate the
eurozone if things deteriorate from here.

 

The problem here, however, is that the eurozone is mired in negative
interest rates. Just how much can be done from here in terms of the ECB
providing “quantitative easing” support when interest rates are at the
levels they now are.

 

There seems to be a distinct difference between the situation in Europe and
that in the United States in terms of the economic issues.

 

I have written a series of posts on the structural changes that have taken
place in the United States economy and how these changes have apparently
made current aggregate economic data outdated. The result of this research
has indicated that the slower measured economic growth does not really show
up how well the US economy is doing. Even though economic growth is modest,
2.3 percent real GDP growth in 2019, unemployment is at a 50 year low and
other indicators also point to a stronger economy.

 

It appears that the same cannot be said of the European economy. This would
imply that the situation in Europe, relative to that in the United States,
is even worse off. Hence, this would be further reason why "risk averse"
funds might be leaving Europe for the United States.

 

If this is the case, Europe seems to be in no position to correct itself and
do the things it would need to do in order to be more competitive in the
world.

 

As French president Emmanuel Macron has found out, many people in Europe are
not yet willing to face the reality of the twenty-first century and move to
become part of the global economy. And, with the growing populist movements
in the eurozone, other nations are also not willing to make this move.

 

Bottom line, Europe, to me, does not to be a very fertile ground for
investment at this point in time. The eurozone just does not have its act
together. Furthermore, I don’t see anything to lead me to believe that it
will be turning around soon.

 

If the European Commission only sees a 1.1 percent rate of growth this year
with little to nothing being done to change the direction the economy is
heading in, what good can be expected for the near future. And, how bad will
the coronavirus be?--https://seekingalpha.com/

 

 

 

Two British Airways executives step down following the airline's first
strike in decades

British Airways' chief operating officer and people director are leaving the
company in the wake of a tense pilot walkout in September, The Wall Street
Journal reported Sunday.

 

The departures came as the airline's parent firm, International Consolidated
Airlines Group, transitions to a new CEO.

 

The departing COO oversaw BA's pilots during their two-day walkout last
year. The strike affected roughly 200,000 travelers and was the airline's
first in 40 years.

 

Two key executives at British Airways are leaving the airline after a tense
faceoff between pilots and company leadership sparked its first strike in
four decades, The Wall Street Journal reported Sunday.

 

Chief Operating Officer Klaus Goersch and People Director Angela Williams
will leave the company as its parent firm, International Consolidated
Airlines Group, transitions to a new CEO. Williams led the airline's
industrial relations while Goersch was in charge of British Airway's pilots,
according to The Journal.

 

"We have made some changes in our leadership team to put us in the best
possible position to deliver the next phase of our £6.5 billion customer and
colleague investment, and to meet the challenges of the digital economy and
changing consumer needs," British Airway told The Journal in a statement.

 

The shakeup follows a pilot walkout in September that crippled the company's
operations over two full days. The airline canceled roughly 1,700 flights
during the walkout, affecting about 200,000 travelers. The demonstration was
fueled by disagreements over pilots' pay and benefits. The workers' union
alleged that British Airway made huge profits on poorly paid pilots who
helped keep the firm afloat while it faced tough times. 

 

The strike was British Airway's first in nearly 40 years, according to The
Journal.

 

British Airway has appointed former Director of Engineering Jason Mahoney as
its new COO, while Stuart Kennedy, former people director at IAG Cargo, will
replace Williams, the company told The
Journal.--https://markets.businessinsider.com/

 

 

 

 

Nigeria offers longer-term naira contracts to lure investors, shore up FX
reserves

ABUJA (Reuters) - Nigeria’s central bank has introduced longer-term
contracts on the naira in a move to attract more foreign inflows, shore up
its dwindling dollar reserves and stave off a currency devaluation, traders
said on Thursday.

 

Central Bank Governor Godwin Emefiele last month said that no adjustment of
the naira was planned and that the bank would continue to sustain the value
of the currency, even though its dollar reserve was shrinking.

 

He has kept the naira stable even as oil prices drop and foreign investors
book profits on local bonds in response to falling yields. The bank operates
a multiple exchange rate regime that it has used to manage pressure on the
naira.

 

The central bank on Thursday offered naira-futures contracts for five-year
settlement for the first time, priced at 379.81 naira to the U.S. dollar,
traders said. The longest tenor prior to this was a 13-month contract, which
the central bank has offered for more than a year.

 

The naira has come under pressure this year as importers demand dollars to
feed Nigeria’s consumers and as market sentiment worsen by fears that the
coronavirus outbreak would hit Chinese demand, one of Nigeria’s major
trading partners, and dampen growth.

 

Nigeria’s currency market has seen little dollar supply for a while as
foreign investors stay on the sidelines owing to lower yields in the debt
market, traders said.

 

Analysts welcomed the move as providing opportunities to hedge currency risk
and develop the futures market but said that further reforms were needed to
boost secondary market trading on the futures.

 

RISK OF NEW CAPITAL CONTROLS

“The longer futures curve may not necessarily result in renewed portfolio
inflows at this point. Government bond yields are too low for foreign
investors to get involved in longer-dated debt, hedged or non-hedged,” said
Samir Gadio, head of Africa strategy at Standard Chartered Bank.

 

The central bank now has sixty futures contracts outstanding from 13
earlier, traders said, underscoring the pressure to attract inflows and to
boost reserves. The contracts trade on the FMDQ OTC Securities Exchange.

 

Nigeria’s forex reserves declined to $36.68 billion as of Feb. 10, down
12.4% from a year earlier, central bank data showed on Thursday, as the bank
burns through its dollar savings to support the naira.

 

The West African nation has been selling debt to shore up reserves. It has
floated the idea of tapping the Eurobond market this year to raise up to $3
billion after staying away last year.

 

Cobus de Hart, senior economist at South Africa’s NKC African Economics said
Nigerian reserves could remain under pressure if oil prices stay low and
imports continue to rise, raising the risk of new capital controls being
imposed.

 

On the official currency market supported by the central bank, the naira was
quoted at 306.95 while on the over-the-counter spot market it was quoted
weaker at around 364.

 

The forwards market on Thursday priced a much weaker naira at 399.73 to the
dollar in a year’ time.

 

 

 

Mozambique's economy grew 2.03% in Q4 - statistics office

JOHANNESBURG (Reuters) - Mozambique’s gross domestic product (GDP) grew
2.03% year on year in the fourth quarter of 2019, versus 2.01% growth in the
previous quarter, data from the national statistics office showed.

 

The economy of the southern African nation grew 2.2% last year, the
statistics office said.

 

 

Sudan inflation jumps to 64.3% in January

KHARTOUM (Reuters) - Sudan’s annual inflation rate hit 64.28% in January,
from 57.01% in December, due to rising food and drink prices, the state
statistics agency said on Thursday.

 

Sudan’s economy was hit hard when the south of the country seceded in 2011,
costing it three-quarters of its oil output, a crucial source of foreign
currency.

 

Inflation soared in recent years, driven by food, beverages and a black
market for U.S. dollars.

 

Shortages of bread and fuel, both subsidized by the government, coupled with
hefty price rises sparked protests that led to the ouster of then President
Omar al-Bashir’s last April.

 

 

 

Tesla: German court halts work on new 'Gigafactory'

Tesla has been ordered to temporarily halt preparations for a car factory in
Germany after environmentalists won a court injunction on Sunday.

 

The electric carmaker had been clearing forest land near the capital,
Berlin, ahead of building its first European car and battery plant.

 

The court emphasised the injunction was temporary and subject to further
hearings, probably this week.

 

Protesters say the factory is a threat to local wildlife and water supplies.

 

To much fanfare, Tesla's boss Elon Musk announced plans last November to
build a European facility known as a "gigafactory" in Grünheide, in the
eastern state of Brandenburg.

 

But the factory has become a flashpoint between environmentalists and
Germany's pro-business Christian Democrat and Free Democrat parties, who
fear the issue could damage the country's image as a place to do business.

 

The dispute highlights the risks for the US carmaker, which has not been
officially granted permission to build the factory. Tesla was, however,
granted permission by Germany's environment ministry to begin site
preparations "at its own risk".

 

This has involved clearing about 91 hectares (225 acres) of forest and the
felling of thousands of trees - something that outraged an alliance of
environmentalists called the Green League.

 

In a statement on Sunday, the court representing the Berlin and Brandenburg
region cautioned: "It should not be assumed that the motion seeking legal
protection brought by the Green League lacks any chance of succeeding."

 

Tesla bought almost 300 hectares (the size of more than 400 football
pitches) in Grünheide from the state of Brandenburg to build the factory,
which is scheduled to open in 2021. Tesla has ambitions to produce up to
500,000 cars a year at the factory, employing about 12,000 people.

 

But the company is in a race to get production up and running as Germany's
big motor manufacturers are investing heavily in new electric car
technology.

 

According to local media reports, Tesla has promised to relocate colonies of
forest ants, reptiles and bats, and is working with conservationists. Last
month, authorities defused seven Second World War bombs discovered at the
site.

 

Tesla currently has two Gigafactories in the US and one in Shanghai,
China.--BBC

 

 

 

Grant Shapps: Government 'not involved' in China-HS2 talks

The UK government was not involved in talks with China over building the HS2
high-speed rail line, Transport Secretary Grant Shapps has said.

 

China's state railway company told HS2 Ltd it could build it in just five
years and for less money, according to a letter seen by Building magazine.

 

But Mr Shapps told the BBC: "This has not been a discussion with the
Department [for Transport]."

 

It comes after Boris Johnson this week approved the controversial HS2
scheme.

 

This was despite an official review warning costs could reach over £100bn,
against a budget of £62bn.

 

When asked about the Chinese approach, Mr Shapps told the BBC's Andrew Marr
on Sunday: "I've certainly had no advice on the subject. Obviously I will be
asking to see what the communication has been."

 

He added: "This has not been a discussion with the department, it's been a
discussion with HS2 as I understand it."

 

Under current plans, the final stretch of the line is not due to be
completed until 2040 - although Mr Johnson has said he wants that brought
forward to 2035.

 

However, Building magazine reported that the China Railway Construction
Corporation (CRCC) had written to HS2 Ltd's chief executive last month,
saying it could build the line by the middle of the decade, for a much
reduced price tag.

 

The CRCC letter, also seen by the Financial Times, states: "We are certain
that we can offer a cost that is significantly lower than the projections we
have seen.

 

"The advantages are, in our opinion, too great to dismiss on the basis that
there are obstacles to overcome.

 

"You will find that the Chinese way is to seek solutions, not linger on
obstacles and difficulties."

 

However, British officials are said to be sceptical that it could operate in
the same way in a democracy with property rights, protected landscapes and
powerful lobbying groups.

 

Conservative MP Tom Tugendhat warned that letting CRCC build HS2 would be
"extremely questionable".

 

Mr Tugendhat, who is chairman of the foreign affairs select committee, said
the UK was in "dire need" of a strategy around its relationship with China.

 

Mr Tugendhat told BBC Radio 4's Today programme on Saturday: "Have we
decided to take back control from Brussels only to hand it over to Beijing?"

 

CRCC has transformed China's transport system, building most of the
country's 15,500-mile high-speed network.

 

Supporters of HS2 say it will improve transport times, increase capacity,
create jobs and rebalance the UK's economy.

 

Once it is built, journeys will be shorter. London to Birmingham travel
times will be cut from one hour, 21 minutes to 52 minutes, according to the
Department for Transport.

 

And while it is being built, it is expected to create thousands of jobs and
provide a stimulus to economic growth.

 

In another BBC interview, Mr Shapps said he was planning a shake-up of the
railways, with rail company franchises cut and a more centralised railway
network system put in place to improve services.

 

"I think the current system is broken," he told the Pienaar's Politics
programme.--BBC

 

 

 

 

Heathrow Airport apologises for IT failure disruption

Heathrow Airport has apologised for disruption after the west London hub was
hit by "technical issues".

 

One passenger said the situation was "utter chaos" after a problem with the
airport's IT system saw staff called in to help passengers get to gates on
the second day of the half-term weekend.

 

Heathrow confirmed the IT failure was affecting departure boards and
check-in systems across all terminals.

 

British Airways, the biggest airline at Heathrow, has cancelled 20 flights.

 

In a tweet, Heathrow Airport said: "We are experiencing technical issues at
the airport which we are working hard to resolve.

 

"To help direct customers to their gates, we have deployed additional
Heathrow colleagues across our terminals.

 

"We apologise for the disruption and will continue to provide regular
updates."

 

Air traffic control is not affected by the technical failures, but the IT
issues, which come on a busy day for family travel, have further compounded
delays triggered by bad weather across the weekend.

 

BA passengers stranded after IT failures

Thousands hit as IT glitch halts BA flights

Heathrow third runway 'delayed for 12 months'

British Airways said the cancellations were the result of Heathrow's IT
issues combined with the existing disruption caused by Storm Dennis.

 

It added that anyone on a cancelled flight would be entitled to a refund or
could be re-booked. Overnight accommodation would be provided if necessary.

 

In response to a customer on Twitter, the airline wrote: "We're aware
Heathrow Airport is currently experiencing a technical issue that is
impacting some of their IT systems across the airport, affecting a number of
airlines.

 

"We are working with them to resolve the issue as a priority and apologise
for the delay to our customers."

 

BA has experienced two high-profile IT failures in recent years.

 

In August last year, more than 100 flights had to be cancelled and a further
200 were delayed after an IT glitch involving two separate systems, one
dealing with online check-in and the other with flight departures.

 

The airline also suffered a major computer failure over the spring bank
holiday weekend in May 2017, which saw 726 flights cancelled and tens of
thousands of passengers left stranded.--BBC

 

 

 

Mark Zuckerberg: Facebook boss urges tighter regulation

Facebook boss Mark Zuckerberg has called for more regulation of harmful
online content, saying it was not for companies like his to decide what
counts as legitimate free speech.

 

Citing China, Mr Zuckerberg also warned excessive control risked stifling
individual expression.

 

He was speaking at the Munich Security Conference in Germany.

 

Social media giants like Facebook are under increasing pressure to stop the
spread of false information.

 

Facebook in particular has been criticised for its policy on political
advertising.

 

The company launched new policies for political advertising in the US in
2018 and globally the following year. These rules require political ads to
display who had paid for them, and a copy of the ad is kept in a
publicly-searchable database for seven years.

 

But this week Facebook said it would not include sponsored political posts
by social media stars in its database. Posts by politicians are not are not
always fact-checked as part of the company's free speech policy either.

 

Facebook under fire over 'outrageous' UK tax bill

At the conference he said he supported regulation.

 

"We don't want private companies making so many decisions about how to
balance social equities without any more democratic process," he said.

 

The Facebook founder urged governments to come up with a new regulatory
system for social media, suggesting it should be a mix of existing rules for
telecoms and media companies.

 

"In the absence of that kind of regulation we will continue doing our best,"
he said.

 

"But I actually think on a lot of these questions that are trying to balance
different social equities it is not just about coming up with the right
answer, it is about coming up with an answer that society thinks is
legitimate."

 

Mr Zuckerberg also admitted Facebook had been slow to recognise the
development of co-ordinated online "information campaigns" by state actors
like Russia.

 

He added that malevolent actors are also becoming better at covering their
tracks by masking the IP addresses of users.

 

To tackle this, Mr Zuckerberg said Facebook had a team of 35,000 people
reviewing content and security on the platform. With assistance from AI, he
said more than a million fake accounts are deleted every day.

 

"Our budget [for content review] is bigger today than the whole revenue of
the company when we went public in 2012, when we had a billion users," he
said.

 

During his time in Europe, Zuckerberg is expected to meet politicians in
Munich and Brussels to discuss data practices, regulation and tax reform.

 

Despite public backlash over issues like political advertising, Facebook
says the number of users on its family of apps - Facebook, Messenger,
Whatsapp and Instagram - continues to grow.

 

Earlier this month, Whatsapp announced that it is used by two billion people
worldwide, more than a quarter of the world's population.--BBC

 

 

 

Washington increases tariffs on aircraft after EU subsidy row

The dispute over subsidies to aircraft makers has escalated, with Washington
imposing a higher tariff on Airbus and aeroplane parts from the EU.

 

It will go up from 10% to 15% next month, while most other tariffs on EU
exports to America, on a range of goods, standing at 25%, are retained.

 

The US Trade Representative pulled back on including salmon and blended
Scotch.

 

But the Scotch Whisky Association said it was "deeply disappointed" the
tariff will be retained.

 

It covers single malts and liqueurs from Scotland and Northern Ireland.

 

While the UK has now left the EU, current rules on trade will continue
during the transition period until the start of 2021 while new trading
relationships are negotiated.

 

The distillers' group issued a new estimate that the cost to the industry is
likely to be more than £100m in annual exports.

 

Scotch whisky targeted by United States tariffs

Whisky and salmon face renewed US tariffs threat

Tariffs will also be retained on cashmere jumpers from Scotland and British
"sweet biscuits", of which the biggest export is Scottish shortbread.

 

Some types of meat and dairy produce from the European Union and UK have
also faced tariffs since 15 October, along with books, tools and some
shellfish and fruit.

 

Only two small changes have been made to the list of goods covered by the US
tariffs which began in October; kitchen knives from France and Germany have
been added, but prune juice has been removed.

 

The action by the office of the US Trade Representative is targeted mainly
at the countries where Airbus is built - primarily the UK, France, Germany
and Spain.

 

The legal statement issued on Friday night in Washington said: "The United
States remains open to a negotiated settlement that addresses current and
future subsidies to Airbus provided by the EU and certain current and former
member states".

 

It said it had considered putting up the tariff rate as high as 100%, but
after receiving 26,000 responses to a consultation begun in mid-December, it
decided not to do so.

 

However, there was a warning in Friday's statement of further escalation by
Washington if there is retaliation against the higher aircraft tariff by the
European Union, or to pursue EU claims that there are unfair subsidies paid
to Boeing in the US.

 

Karen Betts, chief executive of the Scotch Whisky Association, commented:
"We're deeply disappointed that a 25% tariff remains in place on exports of
single malt Scotch whisky and liqueurs to the United States.

 

"This tariff has now been in place for four months and is hitting Scotch
whisky producers hard, particularly small distilleries. We've seen a
significant drop in exports already, and based on this we believe we could
be facing at least £100m in lost exports over a year.

 

"The EU, US and UK must now redouble their efforts to resolve transatlantic
trade disputes quickly, so that Scotch and American whiskies can return to
the tariff-free trade from which we have benefitted for more than 20 years.
It cannot be right that our industry is continuing to pay the price of trade
disputes that have nothing to do with our sector."

 

The industry group has welcomed comments from Prime Minister Boris Johnson
that he intends to use the post-Brexit freedom to manage trade to end the
25% EU tariff on imports of US whiskey, which was introduced as part of a
separate trade dispute with the European Union, over steel tariffs.

 

Paul Everitt, chief executive of aerospace trade body ADS, urged the EU and
US authorities to work together to remove the threat of tariffs.

 

He said: "Low tariffs on aerospace products globally have helped give
consumers safe, technology advanced and increasingly fuel efficient aircraft
that connect global communities.

 

"We urge the EU and US authorities to work together to find a mutually
beneficial solution that removes the threat of tariffs and sustains
competitive markets."--BBC

 

 

 

Global fashion industry facing a 'nightmare'

Luxury goods makers are anticipating significant losses due to the
coronavirus outbreak, while High Street retailers could see new collections
delayed by months.

 

The global fashion industry is worth £2tn ($1.5tn) and it brings the UK more
than £30bn a year in revenues.

 

According to investment bank Jefferies, Chinese consumers make up 80% of
growth in the market.

 

"It's a nightmare," said Flavio Cereda, a managing director at Jeffries.

 

The power of the Chinese consumer has grown over the last decade and now
accounts for 38% of the global fashion industry. In comparison, in 2003,
during the Sars epidemic, the Chinese consumer accounted for only about 8%
of the market.

 

And until 23 January, sales forecasts for 2020 were looking good.

 

But with some Chinese cities now on full or partial lockdown and a spike in
new cases - as of Friday, 63,922 confirmed cases of coronavirus and 1,381
deaths - shopping malls are deserted, workers are at home, and the luxury
goods industry is seriously worried.

 

There have been profit warnings from Burberry, Ralph Lauren, Coach and Kate
Spade owner Tapestry, Moncler and Capri Holdings - the parent firm of brands
like Versace, Michael Kors and Jimmy Choo.

 

Coronavirus: 'We may have no clothes left to sell'

Coronavirus: The economic cost is rising in China and beyond

"We've never seen a situation like this, where sales go to zero. And it
affects everybody, whether you're a big or small brand," Mr Cereda told the
BBC.

 

"We're looking at at least four months of very painful trading figures."

 

Mr Cereda thinks that there will definitely be a recovery, as there is a lot
of "pent up demand" to spend from Chinese consumers, and that spend is
crucial to continued growth in the global fashion industry. But his guess is
that it could take until the summer for consumer confidence to pick up
again.

 

"Chinese shoppers have a lot of money to spend nowadays," Maria Marlone, a
principal lecturer at Manchester Metropolitan University's Fashion Institute
told BBC Radio 5 Live's Wake Up to Money programme.

 

"So whether they come over to the UK to shop and spend here, or they go up
there into their own cities and shop for UK brands over there, it's going to
cause a problem, because there's just no product and there's nobody there to
retail the product."

 

"Not only have you got the problem of getting product out of China... you've
also got the closure of UK companies' hub offices that are based in China,
and they're quite big operations."

 

At London Fashion Week 2020 over the last few days, Chinese buyers have been
missing and they most likely won't be at Milan Fashion Week on 18 February,
added Mr Cereda.

 

Manufacturing impact on retailers

High Street retailers will not be spared the impact of the coronovirus
outbreak either. Some retailers have stores overseas in mainland China and
southeast Asia, but even without an Asian presence, a lot of manufacturing
is still carried out in China.

 

UK retailers are now facing delays to their spring fashion collections of at
least four to six weeks, at a conservative estimate, according to retail
expert Kate Hardcastle.

 

Ms Marlone agrees: "If products haven't been on the seas a few weeks ago,
there is going to be a delay - they reckon maybe up to two or three months,
and if there's going to be that much, then you have to question whether the
customers are going to want it at that stage."

 

"High quality goods like Burberry and John Smedley are still manufactured in
the UK, but mid-range quality like M&S have been chucked out to China a few
years ago."

 

London-based clothing and fabric manufacturer ApparelTasker says that the
closure of Chinese factories and wider uncertainty is benefiting its
business.

 

The firm says that it charges double the amount it would cost to have items
manufactured in China.

 

"Today alone I've had five or six orders placed with me, based on the
uncertainty of China's delivery windows, on the back of the coronavirus. All
of it is by London Fashion Week designers," ApparelTasker's founder Zack
Sartor told BBC Radio 4's Today programme.

 

Ms Hardcastle is worried about the impact delays in product deliveries will
have on High Street that is already reeling from a dismal Christmas.

 

"Spring and summer collections create a spike of interest online and in
stores - usually more colourful than the autumn and winter colours before
them - they help drive important online dwell time and in-store visits," she
said.

 

Consumers want to buy into trends as soon as they see them, and want
products in shops to always look "fresh and new", which will be a struggle
if the delivery delays continue.

 

"Retailers don't have much capacity for further issues - there are still
70-80% discounted stock loitering on websites, even premium fashion
sites."--BBC

 

 

 

German economy barely grows at end of 2019

The German economy had another very weak three months at the end of last
year, according to official figures.

 

Gross domestic product (GDP), the total production of goods and services,
was almost unchanged from the previous quarter.

 

Germany is very exposed to the tensions in international trade, and the weak
new figures partly reflect a fall in overseas exports.

 

Compared with the same period in 2018, GDP was higher by just 0.4%.

 

Although there was some expansion, growth was reported at 0.0% when rounded
to one decimal place by the German statistics office.

 

The sluggish performance was down partly to a decline in exports.

 

Investment in machinery and equipment was also "down considerably" between
October and December.

 

The statistics office doesn't offer an explanation, but it is certainly
possible that that reflects the uncertain outlook for international trade.

 

One factor that is likely to weigh on manufacturing firms when considering
whether to invest is what sort of barriers they will face which could make
it more difficult to sell their goods abroad.

 

Exporting really matters to German industry.

 

The country is the third-largest exporter of goods after the United States
and China, which are both much larger economies.

 

Manufacturing accounts for a larger share of German economic activity than
it does for most other developed economies: 20% compared with 9% for the UK,
for example, and 10% for the US.

 

Germany is very exposed to the tensions in international trade that have
arisen, or at least become more intense, since US President Donald Trump
took office.

 

That related directly to new tariffs that his administration has applied to
aluminium and steel tariffs, and indirectly to the trade war between the US
and China.

 

Because both countries are important markets for German industry, any damage
they inflict on one another can affect sales of German goods.

 

Germany would also be vulnerable if President Donald Trump was to act on his
threat to impose 25% tariffs on imports of cars from the European Union.

 

Weak economic growth

Economic growth in Germany has been relatively weak over the last two years.

 

There have been two quarters when GDP has declined. These have not taken
place consecutively though, so there has been no recession as the term is
often defined - two back-to-back quarters of negative growth.

 

The wider eurozone more widely has also been affected and that was
underlined by new figures published by the EU's office for statistics,
Eurostat.

 

It confirmed its earlier estimate that the eurozone managed growth of just
0.1% in the last quarter of 2019.

 

Germany is the area's largest economy, so the eurozone's figures are, as a
matter of arithmetic, dragged down when Germany has a weak period.

 

But the next two largest economies also had a bad end to last year. Both
Italy and France saw their national economies shrink.

 

Bright spots

There are some bright spots in the eurozone, though. Ireland has stood out
with strong growth for some time, although there are no figures available
yet for the most recent period.

 

While Germany and the eurozone may have had a downbeat period in terms of
growth, employment has been more encouraging.

 

New figures show an increase of 0.3% in the number of people who do have
jobs in the eurozone.

 

Germany has one of the lowest unemployment rates in the world.

 

The eurozone as whole is higher, and some countries notably Spain and Greece
still have a serious problem.

 

But for both the eurozone and those nations, unemployment has fallen far
from the highs it reached in the last decade.--BBC

 

 

 

 

RBS Group to change its name to NatWest

Royal Bank of Scotland (RBS) Group has said it plans to change its name
later this year, as it reported a near doubling of annual profits.

 

The Edinburgh-based bank, which owns RBS, NatWest and Ulster Bank, said it
would rename itself as NatWest Group.

 

The bank reported profits of £3.1bn for 2019, nearly double the £1.6bn seen
the year before.

 

New RBS chief executive Alison Rose called the results the "start of a new
era" for the bank.

 

It is thought that Ms Rose is hoping a rebrand will help shift the lender's
image away from its association with the financial crisis.

 

The bank was rescued by the government in 2008 in the aftermath of the
financial crisis at a cost of £45bn and it is still 62% state-owned.

 

What will bank branches look like in the future?

Ms Rose told the BBC's Today programme that the name change would not alter
any services for RBS or NatWest customers.

 

About 80% of the bank's customers are thought to use NatWest. Names of
individual NatWest and RBS branches will remain the same.

 

She also said that the name change would not result in any job cuts across
the group.

 

This is Ms Rose's first set of results for the lender. She became the first
woman to lead one of the so-called big four largest UK banks when she was
appointed last year.

 

Crucial questions unanswered

Today's announcement was not just the first set of full-year results
unveiled by new chief executive Alison Rose but also the long-awaited
unveiling of her strategy.

 

But many crucial questions remain unanswered, with Ms Rose failing to
address recent press reports that claimed job cuts may be in store.

 

RBS was the subject of a £45bn state bailout during the financial crisis,
and remains 62% taxpayer-owned. A 25-year veteran of the bank, Alison Rose
is one of the few senior executives left from the pre-crisis era, when
former boss Fred Goodwin's overambitious expansion plans left the bank in a
perilous state.

 

More than a decade on, it falls to her to complete the clean-up operation.
She says the name change for the parent company marks a new era, but the
real challenge is to prove she can get the bank back into a state where the
remaining stake can be sold without incurring a hefty loss for taxpayers.

 

Climate commitment

RBS also announced it was committed to "at least halve the climate impact"
of its financing activity by 2030.

 

It says it will stop lending to coal companies by the end of the decade.

 

The bank also confirmed it would make its own operations "net carbon zero"
by the end of this year.

 

That follows on from a pledge by Lloyds Banking Group to halve the amount of
carbon emissions it finances through personal and business loans by 2030.

 

Ms Rose has been at RBS for more than 25 years, mainly in a number of roles
in its investment bank.

 

She was previously deputy chief executive of NatWest Holdings, and before Ms
Rose was appointed chief executive of the RBS group she was head of
commercial and private banking.

 

She worked her way up after joining the bank as a graduate trainee in 1992.

 

Unlike her predecessor Ross McEwan, she is based solely in London, although
the bank has its headquarters in Edinburgh.

 

Ms Rose is also paid more than her predecessor, with her annual salary set
at £1.1m compared with Mr McEwan's £1m.

 

Shares hit

RBS's share price fell by more than 6% in Friday trading after its results
came out.

 

Neil Wilson, chief market analyst at Markets.com, said markets needed "some
convincing", despite the jump in profits.

 

But he said "it's clear RBS is putting legacy conduct issues behind it and
has got the payment protection insurance (PPI) monkey off its back".

 

 

The bank took a £900m charge for mis-sold PPI in 2019, which was at the top
end of its expectations.

 

Mr Wilson added: "Now that the PPI deadline has passed, the bank has much
greater visibility of future cash generation."--BBC

 

 

 

Tesco told not to block rival supermarkets

Tesco has been told not to illegally block rival supermarkets from buying
its land or leasing nearby sites.

 

A competition investigation found that on 23 occasions the UK's biggest
supermarket chain blocked access to rivals using restrictive contracts.

 

Tesco has agreed to take action to avoid this in the future.

 

The supermarket giant blamed "administrative errors" and said it had
strengthened its "controls and training".

 

The Competition and Markets Authority (CMA) investigation discovered that in
three of the cases, when Tesco was selling land, it had put in place
so-called restrictive covenants to stop rivals such as other big supermarket
chains buying it, which is illegal.

 

In 20 of the cases, when Tesco was leasing property from landlords, it would
stipulate in the contract that rivals could not also lease in the same
building or site for 20 years or longer.

 

Companies are allowed to make such demands from landlords, but only for up
to five years.

 

'Unacceptable'

Andrea Gomes da Silva, the executive director of markets and mergers at the
CMA, said in a statement: "It's unacceptable that Tesco had these unlawful
restrictions in place for up to a decade.

 

"By making it harder for other supermarkets to open stores next to its
branches, shoppers could have lost out."

 

The CMA originally found one breach of the rules, and then a review by Tesco
found the other 22 breaches, the authority said in a letter to Tesco chief
executive Dave Lewis.

 

"I recognise that Tesco has acknowledged the breaches that have occurred,
has co-operated with the CMA in taking forward its analysis and has begun to
take remedial action," Ms Gomes da Silva said in the letter.

 

"However, in my view, this episode highlights significant shortcomings in
compliance for a company of Tesco's scale and resources."

 

About half of the breaches happened in London and the south-east of England,
with the rest spread around England and Wales.

 

'Isolated issues'

Tesco said that it did not use restrictive property agreements, but that "in
a small number of historic cases between 2010 and 2015, administrative
errors by former advisers meant that our internal processes were not
followed correctly".

 

"As the CMA recognises, we have worked collaboratively in resolving this,
and our voluntary review of 5,354 land deals found isolated issues in just
0.4% of these."

 

Tesco added that has since strengthened its controls and training, and it
will drop the offending contract terms.

 

The CMA has written to the other major supermarket chains Sainsbury's, Asda,
and Morrisons, as well as Waitrose, Marks and Spencer and the Co-op, to ask
them to check whether they are engaged in similar practices.

 

Nigel Howorth, a partner at Clifford Chance, and head of the law firm's
London real estate office, said: "Major supermarkets have for many years
sought to maintain competitive advantage over rivals through the planning
system and restrictive covenants."

 

"The CMA's order demonstrates an increasing lack of tolerance for such
activities and the supermarket chains can expect greater scrutiny of their
land transactions."--BBC

 

 

 

 

 


 

 


 

INVESTORS DIARY 2020

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


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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for guideline purposes only and sourced from third parties.

 


 

 


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