Major International Business Headlines Brief::: 07 January 2020

Tue Jan 7 03:19:50 CAT 2020

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Major International Business Headlines Brief::: 07 January 2020

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

ü  S.Africa power shake-up looms as ailing Eskom welcomes new CEO

ü  OPEC December oil output slips as Nigeria, Iraq comply more

ü  South Africa's rand weakens as power cuts resume, Mideast tensions
escalate

ü  Kenya plans to refinance or exchange commercial debt with cheaper options

ü  Absa appoints former central bank deputy governor as CEO

ü  Kenyan shilling holds steady against the dollar

ü  Ivory Coast 2019/20 cocoa arrivals 1,153,000 T by Jan. 5 -exporters'
estimates

ü  Japan presses for Ghosn's extradition from Lebanon

ü  First Budget since election set for March

ü  New car registrations at lowest level since 2013

 <mailto:info at bulls.co.zw> 

S.Africa power shake-up looms as ailing Eskom welcomes new CEO

JOHANNESBURG (Reuters) - Eskom’s new chief executive took charge of the
crisis-plagued utility on Monday, embarking sooner than planned on the
mammoth task of fixing a national power deficit and restructuring debts that
have hobbled South Africa’s economy.

Andre de Ruyter, appointed by President Cyril Ramaphosa in November, will
oversee a government plan to split state-owned Eskom into three units - for
generation, transmission and distribution - in an attempt to make it more
efficient.

Ramaphosa is trying to revive Africa’s most advanced economy, which is
flirting with recession, and attract new investment.

Eskom, which generates more than 90% of the country’s power, is in its
current form widely viewed as the biggest impediment to growth, though the
restructuring plan has taken shape against a backdrop of stubbornly high
unemployment, and unions have pledged to fight it.

De Ruyter had been due to start work on Jan. 15, but the sense of crisis
surrounding the firm, which has been leaderless since July and imposed the
latest in a long run of power cuts at the weekend, persuaded him to take the
helm early.

Saddled with unreliable coal-fired power stations, Eskom has struggled to
meet demand since 2007, forcing it into several rounds of extensive power
cuts. Outages last year dented economic output and shook investor confidence
in Ramaphosa’s administration.

At the weekend, it cut up to 2,000 megawatts (MW) from the national grid due
to a shortage of generating capacity.

TROUBLESHOOTER?

In a previous role as CEO of Nampak, de Ruyter steered the packaging company
through financial difficulties, and part of his new brief is to restructure
Eskom’s 450 billion rand ($31 billion) debt pile.

An Eskom spokeswoman said on Monday he had met some Eskom staff over recent
public holidays and had been getting to know the business.

De Ruyter’s predecessor, Phakamani Hadebe, stepped down in July, citing
health reasons. Sources told Reuters at the time that another reason was
that he felt frustrated at being excluded from important decisions affecting
the utility.

One of Eskom’s largest trade unions, the National Union of Mineworkers
(NUM), opposed de Ruyter’s appointment, labelling it a setback to efforts to
promote more black professionals into senior corporate posts.

The NUM plans protests as a “welcoming party” for him, and it and the
National Union of Metalworkers of South Africa have said they will fight the
plan to split Eskom, which they fear will lead to large-scale job losses and
privatisation.

Eskom said in a statement on Monday that roughly 13,000 megawatts (MW) of
its 44,000 MW nominal capacity were offline because of plant breakdowns.

It said it didn’t expect “load-shedding “ - a local term for power cuts - on
Monday but that the system was “constrained and vulnerable”.

($1 = 14.3205 rand)

 <mailto:info at bulls.co.zw> 

OPEC December oil output slips as Nigeria, Iraq comply more

LONDON (Reuters) - OPEC oil output fell in December as Nigeria and Iraq
adhered more closely to pledged reductions and top exporter Saudi Arabia
made further cuts ahead of a new production-limiting accord, a Reuters
survey found.

On average, the 14-member Organization of the Petroleum Exporting Countries
pumped 29.50 million barrels per day (bpd) last month, according to the
survey. That is down 50,000 bpd from November’s revised figure.

Crude prices have rallied to above $70 a barrel in 2020, extending a 23%
gain in 2019, supported by ongoing OPEC-led curbs and increased Middle East
tensions after the killing of a top Iranian general. This has increased
concern of conflict that could further cut supply.

“Looking ahead, geopolitical risks will remain front and centre of investor
concerns,” said Stephen Brennock of oil broker PVM.

“A tense waiting game has begun to see if the fallout will lead to a
disruption in regional oil supplies.”

OPEC, Russia and other allies, known as OPEC+, had an agreement to reduce
supply by 1.2 million bpd in 2019. OPEC’s share of the cut was about 800,000
bpd, to be made by 11 members, with exemptions for Iran, Libya and
Venezuela.

At meetings in December, OPEC+ agreed to make an additional cut of 500,000
bpd as of Jan. 1, 2020.

The 11 OPEC members bound by the agreement easily exceeded the pledged cuts,
thanks in large part to Saudi Arabia and its Gulf allies cutting more than
called for to support the market.

The December survey suggests Nigeria and Iraq, both laggards in making cuts
in 2019, achieved some progress. Compliance rose to 158% in December, the
survey found, from 153% in November.

NIGERIAN DROP

OPEC’s largest production drop of 80,000 bpd was in Nigeria, which exported
less crude according to ship-tracking data and loading schedules.

Much of this decline came from reduced shipments of Bonga crude, which
traders say has been undergoing maintenance.

OPEC’s two top producers, Saudi Arabia and Iraq, each reduced output by
50,000 bpd. This puts Saudi supply more than 500,000 bpd below its 2019
target. Iraq’s compliance, at 59%, is far lower than Saudi Arabia’s but is
up from 23% in November.

The United Arab Emirates made a further voluntary curb in December, while
Kuwaiti output was steady.

Among countries pumping more, the largest increase was in Angola, which
boosted exports after maintenance affecting the Girassol crude stream had
curbed supplies.

Venezuela, which is contending with U.S. sanctions imposed on state oil firm
PDVSA and a long-term decline in output, managed a small boost to supply
with exports increasing in December.

Production from the other two exempt producers Libya and Iran edged lower.

The Reuters survey aims to track supply to the market and is based on
shipping data provided by external sources, Refinitiv Eikon flows data and
information provided by sources at oil companies, OPEC and consultants.

South Africa's rand weakens as power cuts resume, Mideast tensions escalate

JOHANNESBURG (Reuters) - South Africa’s rand weakened on Monday as a
resumption of power cuts spurred concerns over domestic growth outlook,
while an exchange of threats between Iran and the United States sent
investors scurrying for safe-haven assets.

At 0625 GMT, the rand traded at 14.3500 per dollar, 0.35% weaker than its
New York close on Friday.

South Africa’s struggling state utility Eskom late on Saturday resumed power
cuts after a conveyor belt failure at its Medupi coal-fired power station.

Eskom said it did not plan to implement power cuts on Monday, but the
possibility of electricity cuts remained as the power system was vulnerable.

The state-run electricity firm is battling to keep the lights on in Africa’s
most industrialised economy because of repeated breakdowns at its fleet of
coal-fired power stations.

Eskom’s fragility is one of the biggest challenges for President Cyril
Ramaphosa, who is trying to revive growth in Africa’s most advanced economy.

Globally, investors fretted that the killing of Iran’s most prominent
military commander by the United States could trigger a broader Middle East
conflict.

U.S. President Donald Trump warned of a “major retaliation” if Iran hit
back, while Iran’s replacement commander vowed to expel the United States
from the region.

“Given the escalating tensions in the Middle East, we expect a stronger USD
across the board. In thinner liquidity, the moves could be exacerbated in
the short term, with any new headline prints or comments being the focal
point,” Nedbank analysts said in a note.

In fixed income, the yield on the benchmark government bond due in 2026 was
up 1 basis point at 8.27%.

Kenya plans to refinance or exchange commercial debt with cheaper options

NAIROBI (Reuters) - Kenya plans to refinance or substitute commercial loans
with cheaper options from friendly nations or development financiers, its
acting finance minister said on Monday.

The East African nation wants to avoid raising more debt from overseas
capital markets, after a borrowing binge in recent years including Eurobond
offerings, a package of Chinese loans and syndicated commercial loans.

The government was committed to bringing its debt, which has risen to above
62% of gross domestic product, to a more sustainable level, said minister
Ukur Yatani.

“I also intend to restructure debt stocks by refinancing or substituting
commercial elements with concessionary ones,” he wrote in an opinion piece
published in the local Daily Nation newspaper.

Yatani, who is the labour minister, was given the finance portfolio on an
acting basis last July. He has since vowed to stamp out rampant wastage of
public funds and to curb government spending.

“I can only visualise a better 2020,” he said.

Kenya is enjoying a stable foreign exchange rate, low inflation and its
current account deficit has fallen.

But the country is still suffering from a general sense of economic malaise,
concerns over mounting debt, sluggish revenue growth, corruption scandals, a
slowdown in economic output and job losses.

The previous finance minister, Henry Rotich, was charged with corruption
related to a contract for the construction of two dams. He has denied the
charges and the case is ongoing.

“Corruption continues to drag Kenya behind,” Yatani wrote, pledging to
foster more transparency in the management of debt, the budget and
expenditure.

Economic growth slowed to 5.1% in the third quarter of last year from 6.4%
growth in same period a year earlier.

Yatani urged national government agencies and local authorities to speed up
the payment of pending bills to suppliers after businesses complained of
delays which have contributed to the slowdown and the job cuts.

Absa appoints former central bank deputy governor as CEO

JOHANNESBURG (Reuters) - South African lender Absa said on Monday it had
appointed former central bank deputy governor Daniel Mminele as Group Chief
Executive, effective Jan. 15.

Mminele, who retired as second-in-command at the central bank in June 2019,
will be Absa’s first black chief executive.

Mminele will take over from René van Wyk, who has headed the bank on an
interim basis since long-time Absa boss Maria Ramos, at the helm when
Britain’s Barclays exited an 11-year controlling stake in 2017, retired
earlier last year.

Absa Group Chairman Wendy Lucas-Bull said that Mminele’s skills and global
perspective makes him a suitable leader to drive the bank’s focus on
long-term digitally-led growth across its markets.

“In terms of his starting point, Daniel will want to assess where we are in
implementing that strategy and assess how he can play a role in
strengthening the team’s ability to continue on that journey,” said
Lucas-Bull.

Absa has lost market share in the last decade, slipping to third-largest in
terms of assets, and also faces increasing competition from new digital
players Discovery Bank and TymeBank.

Mminele said he was delighted to be joining Absa,

“I look forward to being part of and leading the exciting journey that Absa
has embarked upon to regain its rightful place in the South African market
as well as to fully establish itself as an independent African financial
services group with deep roots in South Africa,” he said in a statement.

Kenyan shilling holds steady against the dollar

NAIROBI (Reuters) - The Kenyan shilling was stable on Monday with
remittances and non-governmental organizations helping the supply of
dollars, traders said.

At 0836 GMT, commercial banks quoted the shilling at 100.95/101.15 per
dollar, the same as Friday’s close.

Ivory Coast 2019/20 cocoa arrivals 1,153,000 T by Jan. 5 -exporters'
estimates

ABIDJAN (Reuters) - Cocoa arrivals at ports in top grower Ivory Coast
reached 1,153,000 tonnes between Oct. 1 and Jan. 5, 2020, exporters
estimated on Monday, up 3.6% from 1,113,000 tonnes in the same period last
season.

About 41,000 tonnes of beans were delivered to Abidjan port and 43,000
tonnes to San Pedro between Dec. 30 and Jan. 5 for a total of 84,000 tonnes,
up from 70,000 tonnes during the same week last season.

Japan presses for Ghosn's extradition from Lebanon

Japan is pressing Lebanon to return fugitive ex-Nissan boss Carlos Ghosn,
who escaped house arrest in Tokyo before reportedly being smuggled out of
the country in a flight case.

Lebanon does not typically surrender its citizens but Japan says it can
request his extradition.

According to reports, Mr Ghosn walked out of his house on 29 December before
boarding a bullet train to Osaka.

He was then bundled into a flight case, which was put on a Turkey-bound
plane.

Leaving alone

Mr Ghosn, who ran Nissan until he was arrested on charges of financial
misconduct in November 2018, was banned from seeing his wife while on bail.

But, in the final days of 2019, he skipped bail to board a private jet that
took him to Turkey before he travelled on to Lebanon, where he is a citizen
and where his wife was waiting.

Security cameras caught the 65-year old walking out of his house in Tokyo
alone at around 14:30 local time on 29 December, according to Japanese
media.

He reportedly then met two men at a Tokyo hotel who escorted him to the
city's Shinagawa station where they caught a train to Osaka, Japan's second
city.

There, the three men checked into a hotel near Kansai Airport, the reports
said.

Mr Ghosn was not seen leaving the hotel but the two other men were caught by
security cameras exiting with two big boxes, according to the reports.

The Wall Street Journal said Mr Ghosn was loaded on to the private jet bound
for Turkey in a flight case, more normally used to transport musical
equipment for live shows, with holes drilled into the bottom so that the
fugitive executive was able to breathe.

The paper said the case was not checked by airport security before it was
loaded on to the plane.

'Wrongful methods'

Japan's justice ministry said it did not have records of Mr Ghosn departing
Japan.

"It is believed that he used some wrongful methods to illegally leave the
country," the country's Justice Minister, Masako Mori, said at a press
conference on Monday.

"I have instructed the immigration agency to further tighten the departure
process," she added.

Since fleeing, Mr Ghosn has avoided media interviews but he is expected to
break his silence at a press conference on Wednesday.

Last week, he issued a short statement that said he alone arranged for his
unauthorised departure from Japan and played down speculation that his wife,
Carole, and other members of his family helped arrange for him to escape.

Mr Ghosn denies the charges of financial wrongdoing in Japan, instead
claiming the country's justice system is "rigged".--BBC

First Budget since election set for March

Chancellor Sajid Javid has set 11 March as the date for his first Budget -
the first since the general election.

Mr Javid says billions of pounds will be invested "across the country".

The Treasury will "prioritise the environment", he said, and reiterated a
plan to make use of low borrowing rates to spend on public services.

John McDonnell, Labour's shadow chancellor, said he doubted whether the
government would deliver on its investment or climate goals.

Mr Javid will update his cabinet colleagues on the performance of the
economy before facing MPs later on Tuesday.

He cancelled a 6 November Budget in October to make way for the general
election.

Scrutiny question

This means that the Office for Budget Responsibility, which monitors the
government's performance on money management, may not be able to comply with
its legal requirement of publishing two forecasts per financial year, which
ends on 31 March.

Critics say this means less independent scrutiny of the public finances.

The Budget is the government's yearly announcement on its plans for tax and
spending for the coming financial year, which starts in April.

"After a decade of wrecking the economy, we can have no confidence in a Tory
government delivering the scale of investment needed for renewal, especially
with a no-deal Brexit still on the table," said Mr McDonnell.

"The lack of foresight in not focusing this budget on the threat of climate
change is also criminally irresponsible.

"The government has learnt nothing from the fires in Australia and the
floods on Indonesia. This will be a budget of climate change recklessness,
not renewal."

This is not just about a change of date for a Budget originally postponed
because of the Brexit delay and then an election.

A rewiring of the Treasury is in the works. First, the Budget to be
presented on 11 March will be quite fundamentally different to the Budget
that never happened. The election result gives a Commons majority and a
mandate to act confidently and decisively, and in a manner that fleshes out
the election rhetoric about "levelling up" - helping slow-growing regions of
the economy.

In the intervening two months, the Treasury will have to work up a new
national infrastructure strategy that delivers on the plan to rebalance
regional inequalities, some of which stem from decisions made nationally on,
for example, transport spending.

Insiders suggest that the changes could reach into the heart of the
Treasury, taking up advice from independent economists and regional mayors
to change the way that the government calculates the value for money of
public spending on investment projects.

The so-called "Green Book", used to evaluate big investment projects, could
be changed to rectify a formula and a process that biases government
investment to where economic growth, high productivity, and high house
prices are already concentrated - in and around London.--BBC

New car registrations at lowest level since 2013

New car registrations in the UK last year fell to their lowest level since
2013, according to the Society of Motor Manufacturers and Traders (SMMT).

It was the third consecutive year of decline, and the SMMT expects that
trend to continue in 2020.

Those expectations are largely due to weak consumer confidence and confusion
over clean-air legislation.

The organisation also says the industry is facing serious challenges
adapting to new emissions legislation.

It says new rules will require a huge expansion in the use of electric and
hybrid cars.

But according to the SMMT's chief executive, Mike Hawes, the fallout from
Brexit remains the biggest "clear and present danger" to the sector in the
UK.

'Perfect storm'

The SMMT's figures show a total of 2.31 million new cars were registered in
2019, down 2.4% from the year before.

Since reaching a record high of 2.69 million vehicles in 2016, the market
has been steadily contracting, in response to what Mr Hawes describes as a
"perfect storm" for the industry.

A key factor has been the collapse in demand for diesel-powered cars, which
fell by 22% compared with 2018.

Where once they accounted for half of all new cars sold, now they make up
just a quarter of the market.

The SMMT says uncertainty over future air quality rules, and in particular
over potential restrictions on diesel vehicles entering city centres, has
left consumers confused.

That, combined with political uncertainty and a general fall in consumer
confidence, has meant many potential buyers have decided to hang on to their
old cars rather than investing in new ones.

Five reasons the car industry is struggling

"You can never put it down to one single factor. It has been a perfect storm
over the past few years", says Mr Hawes.

"It's really no surprise the market has been declining. That's why we need a
return of confidence and strong economic conditions".

The situation is not expected to improve this year, however, with the SMMT
forecasting a further 1.6 % fall in registrations in 2020.

Electric and hybrid cars

One area in which sales have increased dramatically over the past year is
the market for "alternatively fuelled vehicles", in other words electric
cars and hybrids. They rose by more than a fifth. Registrations of
pure-electric cars were up 144%, albeit from a very low level.

The problem for the industry is that this increase is not happening nearly
fast enough. New EU rules which are being phased in this year, and which
enter fully into force in 2021, oblige manufacturers to cut the average CO2
emissions of their new car fleets dramatically - or face swingeing fines.

These targets are expected to remain in force, even after the UK has left
the EU. But they imply a cut of more than a third in overall CO2 output, and
the industry believes that meeting them will be extremely challenging.

In fact, the SMMT calculates that without other changes, the market share of
electric vehicles would have to rise from the current 1.6% to 27% - or the
combined share of electric vehicles and hybrids would have to increase from
7.4% to 56%.

In reality, manufacturers will not rely solely on selling more low- or
zero-emission vehicles in order to meet the targets. They will also be able
to withdraw their most-polluting models and sell more efficient petrol and
diesel vehicles, for example.

But sales of electric and hybrid vehicles will still need to rise very
substantially, and Mr Hawes insists government must play a role.

"These are still expensive technologies. They carry a price premium," he
says.

"That's why incentives are so significant in determining the uptake."

Brexit

But of all the clouds hanging over the industry, one remains darker than the
rest in the eyes of the SMMT: the aftermath of Brexit.

Although the UK is due to leave the EU on 31 January, what happens after the
transition period remains uncertain.

The government insists it will be able to conclude a trade deal with the EU
by the end of the year.

But if that doesn't happen, there remains the possibility that the movement
of cars and car parts across the channel could be subject to steep tariffs
or disruptive border checks and delays.

"That is probably the clear and present danger," says Mr Hawes

"Yes, we will always sell cars in the UK and buy cars in the UK. Where they
come from will be affected by Brexit. How much you pay will be affected by
Brexit."

"That is right before us now."--BBC

INVESTORS DIARY 2020

Company

Event

Venue

Date & Time

Companies under Cautionary

Bindura Nickel Corporation

Padenga Holdings

Delta Corporation

Meikles Limited

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