Major International Business Headlines Brief::: 16 January 2020

[Bulls n Bears]

 <http://www.bulls.co.zw/> Bulls.co.zw
<mailto:info at bulls.co.zw?subject=View%20and%20Comments> Views & Comments
<http://www.bulls.co.zw/blog> Bullish Thoughts
<http://www.twitter.com/BullsBears2010> Twitter
<https://www.facebook.com/BullsBearsZimbabwe> Facebook
<http://www.linkedin.com/pub/bulls-n-bears-zimbabwe/57/577/72> LinkedIn
<mailto:info at bulls.co.zw?subject=Unsubscribe> Unsubscribe

 


 

 


Major International Business Headlines Brief::: 16 January 2020

 


 

 


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

 


 

 


 

 

ü  Reprieve for S.Africa's Old Mutual as court rules against fired CEO

ü  Nigeria seeks to boost revenue, support small firms with new finance law

ü  S.Africa's Woolworths names U.S. fashion executive Roy Bagattini new CEO,
shares jump

ü  Kenya's president urges the central bank to prevent predatory lending

ü  Lekoil shares plunge as investigation into loan scam begins

ü  South Africa's mining industry calls for action to end power crisis

ü  Morocco growth to rise to 3.5% in 2020-planning agency

ü  Nigeria's central bank reschedules monetary policy committee meeting

ü  US and China sign deal to ease trade war

ü  Five things that aren't in the US-China deal... and why

ü  Dow closes above 29,000 as market rally continues

ü  German economy sees weakest growth since 2013

ü  Amazon in India: Jeff Bezos announces $1bn Indian investment

ü  Fall in inflation raises prospects of interest rate cut

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

Reprieve for S.Africa's Old Mutual as court rules against fired CEO

JOHANNESBURG (Reuters) - A South African High Court ruled on Tuesday that
Old Mutual does not have to reinstate its sacked chief executive Peter Moyo,
a shift in legal fortunes for the country’s No.2 insurer that drove its
shares up more than 5%.

 

Old Mutual has been locked in a dispute with Moyo since it suspended him in
May 2019 over an alleged conflict of interest. He was fired the following
month then temporarily reinstated by the courts in July in a ruling that
blocked the insurer from seeking a replacement.

 

Tuesday’s ruling marks the first significant court victory for the group
after a series of embarrassing losses that have rocked confidence in one of
South Africa’s oldest companies and knocked over 10% off its share price.

 

The written judgement said that the interim order temporarily reinstating
Moyo should not have been granted in the first place. “The irreparable harm
which Old Mutual... its shareholders, employees and other stakeholders stand
to suffer if the interim interdict is allowed to stand, requires no
imagination or elucidation,” it said. Moyo said in a statement he was still
studying the judgement but added there was a “very, very good chance that we
are actually going to appeal”.

 

His lawyer said he would proceed with a longer case against his dismissal,
in which Moyo is seeking permanent reinstatement or damages. Tuesday’s court
decision means Old Mutual will not be forced, for now, to work with a CEO
whose reinstatement it has repeatedly said is “untenable”.

 

A spokeswoman for Old Mutual said it was vindicated, and the board was now
mandated to seek a new CEO.

 

Its shares rose more than 5% after the ruling, and were still up 3.51% at
1011 GMT.

 

CREDIBILITY

Some shareholders were concerned that Moyo’s dismissal was sloppily handled
and that the drawn-out public battle was distracting from day-to-day
operations.

 

Jacques Plaut, portfolio manager at Allan Gray - Old Mutual’s second largest
shareholder - said he was pleased with the result, though he expected the
market to have priced in a positive outcome for the insurer.

 

“This is good for the company and for governance in South Africa,” he said.

 

While it is not the end of the road legally for Moyo, who said he could
indicate whether he intends to appeal within the next few days, it is a blow
to his case.

 

He will also have to seek leave to appeal from the Supreme Court of Appeal.

 

Warwick Bam, analyst at Avior Capital Markets, said the decision gives some
credibility to Old Mutual’s board and its handling of Moyo’s dismissal and
the subsequent fallout, which in turn eases any concerns of further
departures at the top.

 

“[Old Mutual] can now quite confidently go ahead and start putting...
strategic actions into place without being concerned that Peter Moyo may
still have a hand in the business,” he added.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


Nigeria seeks to boost revenue, support small firms with new finance law

LAGOS (Reuters) - Nigerian President Muhammadu Buhari has signed into law a
new bill that seeks to boost government revenue through a rise in the
value-added tax rate while at the same time supporting small businesses in
Africa’s biggest economy.

 

Nigeria has been trying to boost tax income as part of efforts to diversify
its economy to reduce dependence on sales of crude oil.

 

But raising more money from taxes has proved difficult in a country where
most small businesses are not registered. The government has repeatedly said
it wants to boost non-oil revenue since oil sales make up 90% of
foreign-exchange receipts.

 

Under the finance bill signed into law on Monday, VAT rates will rise from
5% to 7.5%, which is still one of the lowest rates in the world.

 

The bill, passed by parliament last year together with the record 2020
budget of 10.59 trillion naira ($34.6 billion), aims to help lift Nigeria’s
economy from low growth following a recession four years ago.

 

Under the new law, the government will introduce a graduated tax scale for
small businesses, with firms that generate less than 25 million naira
($70,000) in annual turnover exempt from corporate tax.

 

Tax experts say the finance bill will seek to tax companies with digital
activities that have significant presence in Nigeria and generate profits.

 

The government hopes the new bill will help to reform its domestic tax laws
and provide incentives for investments in infrastructure and the capital
markets while supporting small businesses.

 

Nigerian Stock Exchange chief Oscar Onyema said on Monday he expects the new
bill and 2020 budget implementation to have a positive impact on corporate
earnings and consumer spending.

 

So far, stocks are up 9.6% in the first seven days of trading in 2020,
thanks to higher oil prices and gains in Nigeria’s second-biggest listed
firm, MTN Nigeria.

 

($1 = 305.95 naira)

 

 

S.Africa's Woolworths names U.S. fashion executive Roy Bagattini new CEO,
shares jump

JOHANNESBURG (Reuters) - South Africa’s Woolworths Holdings has appointed
Levi Strauss executive Roy Bagattini as CEO, cheering investors keen for a
fresh pair of hands to tackle the department chain’s struggling Australian
business.

 

He replaces Ian Moir, who will step down in February after nine years at the
helm during which he oversaw the group’s digital transformation and paid a
big premium to bulk up in Australia via retailer David Jones.

 

Moir’s departure was widely anticipated by industry analysts as his $2
billion acquisition in 2014 of David Jones has weighed on the group which
has had to write down its value twice and pump in millions of dollars to
refurbish its Elizabeth Street store, disrupting sales.

 

Bagattini, 56, previously served as Levi Strauss’ APAC, Middle-East and
Africa president and also worked for Denmark-based beer producer Carlsberg
and South African-founded brewing and beverage firm SABMiller.

 

Woolworths shares jumped more than 9% on news of his appointment.

 

Investors often cited that Moir overpaid for David Jones “and when it wasn’t
working he continued to invest in it”, Sasfin Wealth senior equity analyst
Alec Abraham said.

 

“You’ve got fresh eyes with no vested interest in any particular region or
business that can arguably have an objective review of the business and make
objective decisions on where it should be going in future,” he said.

 

David Jones has been struggling with subdued consumer spending in a slowing
Australian economy and pressures faced by department store operators as
shoppers switch to online players such as Amazon.com Inc or fast fashion
brick-and-mortar stores like Inditex’s Zara.

 

“Roy has extensive operational, management and turnaround experience in
global consumer and retail markets, which will prove invaluable as we
continue to navigate the structural changes taking place in the retail
sector and the challenges particular to our group,” Woolworths Chairman
Hubert Brody said.

 

Moir will work closely with Bagattini to facilitate a transition and will
continue in his role as acting CEO of David Jones, the company said.

 

($1 = 14.4425 rand)

 

($1 = 1.4507 Australian dollars)

 

 

 

Kenya's president urges the central bank to prevent predatory lending

NAIROBI (Reuters) - Kenya’s president Uhuru Kenyatta urged the central bank
on Tuesday to use all its tools to prevent predatory lending and to boost
affordable credit especially to small and medium enterprises.

 

“This sector is indeed the lifeblood of our economy,” he said in a televised
address.

 

 

Lekoil shares plunge as investigation into loan scam begins

LAGOS (Reuters) - Shares in Nigerian oil company Lekoil fell more than 70%
on Tuesday following a suspension of trading after the firm discovered that
a $184 million loan it had announced was fraudulent.

 

Shares reopened at 2.50 pence on the London Stock Exchange on Tuesday - down
from a closing price of 9.40 pence on Friday. They were down 69% at 2.90
pence at 1134 GMT.

 

Lekoil suspended trading of its shares on the London bourse on Monday after
finding that a $184 million loan it had announced from the Qatar Investment
Authority was a “complex facade” by individuals pretending to represent the
QIA.[nL8N29I6D6]

 

The audacious scam casts doubt on Nigeria’s hopes that its indigenous oil
and gas producers can rise up to fill the gap left by international oil
majors such as ExxonMobil and Chevron, which are trying to sell Nigerian
assets to focus on projects elsewhere. [nL8N27D2HC][nL8N2815TM]

 

The supposed loan, arranged by a company called Seawave Invest Limited, was
intended to develop the Ogo field within Oil Prospecting Licence 310.

 

Lekoil is now scrambling to find nearly $40 million by next month or it
could be forced to sell its 17.14% stake in OPL 310.

 

Lekoil has a $10 million payment due next month to Optimum Petroleum
Development Company Limited related to the license, and also must prove by
next month that it can raise the $28 million required to fund its portion of
appraisal well drilling for OPL 310.

 

A source close to the company said it could also defer some obligations with
a view to focus on raising financing for the appraisal well drilling.

 

$600,000 PAYMENT

Lekoil said it had paid Seawave $600,000 for brokering the fraudulent loan.

 

Reached by phone, Seawave, a Bahamas-based independent consultancy firm that
focuses solely on Africa, provided Reuters with the email address of a
lawyer who could provide comment; the lawyer did not respond to an email.

 

After the deal was announced on Jan. 2, the company’s shares more than
doubled to a high above 11 pence per share.

 

Lekoil said it would contact the relevant authorities “across a number of
jurisdictions” immediately to investigate what had happened.

 

It also said company board members Mark Simmonds - Britain’s Africa minister
under ex-prime minister David Cameron - and Tony Hawkins would lead its own
investigation into the loan, take steps to claw back the money paid to
Seawave and look into its “wider corporate governance practices”.

 

Simmonds and Hawkins both joined as independent non-executive directors
after the deal was agreed.

 

Typically, a publicly listed company is obliged to disclose potentially
market-moving information in a timely fashion.

 

Lekoil has said the Qatar Investment Authority got in touch with the firm on
Jan. 12. A source familiar with the developments said on Monday the QIA
first found out about the loan when Lekoil issued the statement on Jan. 2,
and that it contacted Lekoil immediately to tell it that the loan was not
legitimate. [nL8N29I6D6]

 

Discussions about the loan took place, in part, in Qatar, a source close to
the negotiations told Reuters, while Lekoil also has an office in Princeton,
New Jersey.

 

Britain’s Financial Conduct Authority declined to comment on the case in any
way - and would not say whether it would investigate the circumstances
surrounding the loan fraud.

 

A spokeswoman for the London Stock Exchange said the organisation does not
comment on individual companies.

 

 

 

South Africa's mining industry calls for action to end power crisis

JOHANNESBURG (Reuters) - South Africa’s mining industry body on Monday urged
the government to bring on stream new private sector power sources to ease
the power crisis that has pushed the country to the brink of recession.

 

Struggling state-owned utility Eskom was forced to implement power cuts
across the country last year and also last week even though many businesses
and factories were closed for the holidays.

 

The power cuts have piled pressure on President Cyril Ramaphosa, who came to
power with a pledge to revive investor confidence and boost economic growth.

 

The Minerals Council South Africa said the insecurity in power supplies plus
rapidly increasing costs were at the forefront of the constraints on the
economy and mining industry.

 

The Council said in a statement ahead of a meeting with Ramaphosa and other
government leaders: “The government and Eskom should be contracting in, at
the least cost possible, any extra renewable energy from existing wind and
solar plant that are sitting idle.”

 

The industry body also said the government should tackle red tape, which is
holding up significant additional power that could be brought on stream to
bridge the gap.

 

Last month, mines across South Africa shut down after flash flooding
triggered the most severe power blackouts in more than a decade, threatening
a key export sector for the country.

 

The mining industry contributed 351 billion rand ($24.34 billion) to the
South African economy in 2018, the Minerals Council has said, equating to
about 7% of gross domestic product (GDP).

 

Eskom supplies more than 90% of South Africa’s power, but its creaking fleet
of coal-fired plants have struggled to meet electricity demand.

 

Executives of the power utility have blamed a lack of critical mid-life
maintenance under previous management and analysts say the government needs
to procure more generating capacity fast.

 

Last month, the energy ministry published a document requesting information
from the power industry on options for between 2,000 MW and 3,000 MW of new
capacity at the lowest cost.

 

The industry is due to respond by the end of January and present options
that could be connected to the grid within three to six months or six to 12
months, if they are selected in a procurement process, the document showed.

 

“Eskom requires urgent reforms and restructuring to materially improve
maintenance, improve plant reliability and to get costs under control,” the
Minerals Council said.

 

($1 = 14.4203 rand)

 

 

Morocco growth to rise to 3.5% in 2020-planning agency

RABAT (Reuters) - Morocco’s official planning agency forecast economic
growth would rise to 3.5% in 2020 from 2.3% last year, though it noted the
vulnerability of the key agricultural sector to variable rainfall.

 

It said on Tuesday its forecast was based on the assumption of an average
crop yield, as well as a rise in exports and government measures to raise
tax revenue and investment.

 

 

 

Nigeria's central bank reschedules monetary policy committee meeting

LONDON (Reuters) - Nigeria’s central bank has rescheduled its first monetary
policy committee meeting of 2020 to Jan. 23 and 24, it said in a tweet on
Monday.

 

The meeting was originally scheduled for Jan. 20 and 21.

 

“The CBN (Central Bank of Nigeria) regrets any inconvenience this change may
have caused its stakeholders and the general public,” the bank said in a
tweet.

 

It did not give a reason for the change. A central bank spokesman declined
to respond via text message on the reason for the change.

 

The central bank has held its benchmark interest rate at 13.5% since cutting
it from 14% last March in a surprise moved aimed at stimulating growth and
signalling a new direction. It was the first rate cut since November 2015,

 

Central bank Governor Godwin Emefiele in November said he expected the bank
to maintain its stable exchange rate policy in the medium term and keep
monetary policy tight in 2020 to combat inflation. [nL8N28A0OT]

 

Annual inflation in November stood at 11.85%, the highest rate since April
2018. Economists say Nigeria’s closure of parts of its borders since August
to fight smuggling of rice and other goods has exacerbated inflation.

 

 

 

US and China sign deal to ease trade war

The US and China have signed an agreement aimed at easing a trade war that
has rattled markets and weighed on the global economy.

 

Speaking in Washington, US President Donald Trump said the pact would be
"transformative" for the US economy.

 

Chinese leaders called it a "win-win" deal that would help foster better
relations between the two countries.

 

China has pledged to boost US imports by $200bn above 2017 levels and
strengthen intellectual property rules.

 

In exchange, the US has agreed to halve some of the new tariffs it has
imposed on Chinese products.

 

However the majority of the border taxes remain in place, which has prompted
business groups to call for further talks.

 

"There's a lot of work to do ahead," said Jeremie Waterman, president of the
China Center at the US Chamber of Commerce. "Bottom line is, they should
enjoy today but not wait too long to get back to the table for phase two."

 

The US and China have engaged in a tit-for-tat tariff war since 2018, which
has led to extra import taxes being levied on more than $450bn (£350bn)
worth of traded goods. The ongoing dispute has disrupted trade flows,
dampened global economic growth and unnerved investors.

 

'Righting wrongs'

At a signing ceremony in Washington, attended by top Republican donors and
business leaders, Mr Trump said the deal sets the stage for a stronger
relationship between the US and China.

 

"Together we are righting the wrongs of the past and delivering a future of
economic justice and security," he said. 

 

"Far beyond even this deal, it's going to lead to an even stronger world
peace," he added.

 

What's in the deal?

China has committed to increasing its US imports by at least $200bn over
2017 levels, boosting purchases of agriculture by $32bn, manufacturing by
$78bn, energy by $52bn and services by $38bn.

China has agreed to take more action against counterfeiting and make it
easier for companies to pursue legal action over trade secret theft

The US will maintain up to 25% tariffs on an estimated $360bn worth of
Chinese goods; China, which has levied new tariffs on $100bn worth of US
products, is also expected to maintain the majority of them

Chinese Vice Premier Liu He, who signed the deal on behalf of China, said
the agreement was rooted in "equality and mutual respect" and defended his
country's economic model in his remarks.

 

"China has developed a political system and a model of economic development
that suits its national reality," he said.

 

"This doesn't mean that China and the US cannot work together. On the
contrary, our two countries share enormous common commercial interests."

 

"We hope both sides will abide by and keep the agreement in earnest."

 

It has been hailed by the White House as a breakthrough in a war that
President Trump triggered to protect American jobs and companies from what
he viewed as unfair competition from China.

 

The weapon of choice: billions of dollars of tariffs, or extra charges, on
imports. But that has hurt the very workers and businesses they were meant
to protect, in both countries.

 

For all the fanfare - and the unusual appearance of a president at the
signing of a bilateral trade deal - this is more armistice than victory -
with only a small proportion of the tariffs being reversed and relatively
minor concessions granted by both sides. Tariffs remain on around two-thirds
of the goods Americans buy from China

 

Moreover, Washington's fundamental complaints about Chinese practices - from
its approach to subsidising businesses to cybertheft - remain unresolved.
With President Trump's ambition to rewrite the rules of global trade yet to
be achieved, some fear he may turn his firepower on Europe next - just as
the UK is looking to broker an advantageous post-Brexit relationship

 

'Incremental progress'

Mr Trump has said the accord signed on Wednesday is a "phase one" agreement
and promised that the administration will take up other issues - such as
China's state subsidies - in future negotiations.

 

The US accuses China of "unfair" business practices, such as providing
subsidies for domestic businesses and administrative rules that have made it
difficult for US firms to operate in the country.

 

Mr Trump has defended maintaining the bulk of the tariffs, saying they will
provide leverage in future talks. But US business groups and analysts
expressed concern.

 

"While Phase One makes incremental progress, it remains to be seen whether
it will deliver any meaningful relief for farmers like me," said Michelle
Erickson-Jones, a Montana wheat farmer, who is affiliated with the lobby
group Farmers for Free Trade. "The promises of lofty purchases are
encouraging but farmers like me will believe it when we see it."

 

Charles Kane, a lecturer at the MIT Sloan School of Management, said Mr
Trump sees China as a useful political scapegoat, making any serious
negotiation unlikely until after the November presidential election.

 

"He's using [the trade war] as a political weapon," Mr Kane said.--BBC

 

 

 

Five things that aren't in the US-China deal... and why

The US and China have finally - after almost two years of hostilities -
signed a "phase one" deal. But it only covers the easier aspects of their
difficult relationship, and only removes some of the tariffs.

 

The biggest hurdles are still to come, and could stand in the way of a
second phase agreement - one that would in theory remove all of the tariffs,
bringing some much needed relief for the global economy, which is the
interests of all of us.

 

What's not in the phase one deal tells us where the flashpoints are in the
US-China relationship - and what could derail the second round of
negotiations.

 

So what didn't make it into the agreement?

 

1. Industrial subsidies and 'Made in China 2025'

The deal doesn't address Beijing's ambitious 'Made in China 2025' programme,
which is designed to help Chinese companies excel and become world-class
leaders in emerging technologies. It also doesn't address the subsidies that
China gives its state-owned enterprises, says Paul Triolo of the Eurasia
Group.

 

Washington sees "Made in China 2025" as a direct threat to its supremacy in
tech, saying that Chinese companies have only caught up with American ones -
at times outpacing them - because they get unfair and outsized assistance
from the Chinese government in the form of subsidies.

 

These were amongst the thorniest issues the Trump administration had with
China, but they've been pushed to the phase two process Mr Triolo says,
along with "market access in sectors such as cloud services, cyber security
and data governance issues".

 

Beijing maintains it doesn't unfairly subsidise these industries or
companies, but the reality is China isn't going to give up dominance in
these sectors so easily.

 

2. Huawei

The trade deal won't reduce US pressure on Huawei, the Chinese telecoms
giant that has been caught in the crossfire of the trade war, with the US
Treasury Secretary Steve Mnuchin saying the company isn't a "chess piece" in
the negotiations.

 

That will disappoint both Huawei and the Chinese government which have been
furious over how Washington has linked the company's fate to the
relationship between the US and China.

 

US-China trade deal: winners and losers

The US-China trade war in charts

A quick guide to the US-China trade war

The Chinese firm became a symbol of the US-China tech rivalry and Washington
has been lobbying its allies - including the UK - to not use Huawei's 5G
technology services in critical communications infrastructure, alleging it
could be used by Beijing to spy on customers. Huawei has denied this and had
hoped that if the US-China relationship improved, its fortunes would too.

 

Analysts tell me that's unlikely. With the signing of this agreement,
there's a clear separation between national security and trade, and Huawei
and other Chinese companies should still expect the pressure on them to
continue. So expect more American export bans not just on Huawei, but on
several more Chinese companies and increased US scrutiny on Chinese
investments abroad.

 

3. Access for foreign financial services firms

While the agreement does talk about opening up market access for financial
services firms, some analysts have said it doesn't go far enough to ensure
they have equal market access.

 

China had already publicly said that it was opening up its financial
services sector, and has recently allowed foreign companies to have a bigger
stake in Chinese firms. But Beijing isn't giving up much by doing that,
because China's financial services sector is now dominated by domestic
digital payment players. Even if US payment firms do have greater market
access to the Chinese market, it's hard to see how they might be able to
compete. Whether China sincerely applies its commitments to treat foreign
and domestic firms equally will also be watched closely by the Trump
administration, and this could be a potential area where the rapprochement
could be derailed.

 

4. Enforcement and interpretation

The deal has a dispute resolution mechanism in place, which basically
requires China - once a complaint has been made - to begin consultations
with the US, with the onus on Beijing to resolve it.

 

But what the deal leaves out is "how the US is going to monitor
enforcement," says Derek Scissors of the American Enterprise Institute.
"American firms don't like to report intellectual property theft," he told
me, "so in the first instance what mechanism is the US using to gather
information on this. All that is in the document is consultations."

 

The deal also leaves out how the two sides will interpret these key aspects
of the agreement. Already, there are signs of differences. Chinese state
media has suggested the dispute resolution mechanism isn't dictated by the
US - not entirely in keeping with Washington's messaging.

 

This could indicate that even though there is an agreement in place, Beijing
might ignore it, as Dan Harris of the China Law blog points out.

 

"The problem isn't the law," he says. "It's that when something is important
to China - some cutting edge technology that it wants - then those laws
don't have any use at all."

 

5. Further reductions in tariffs

The deal doesn't include a definitive timeline on when the tariffs that are
still in place will go down. According to research from the Peterson
Institute for International Economics, average tariffs on both sides are
still up about 20% from pre-trade war levels - six times higher than when
the dispute began. That means companies and consumers are still paying more.

 

Media captionWho really pays in a tariff war?

Admittedly, the Trump administration has left the threat of tariffs in place
as a stick to beat China with - in case Beijing doesn't keep to its
commitments.

 

And there's always that risk, as China's hard line Communist Party
mouth-piece the Global Times points out: "Can a preliminary trade agreement,
reached during a period when China-US strategic relations are clearly
declining, really work? Will it be replaced by new conflicts or further
progress as negotiations continue?"

 

The potential for trade tensions to resume on both sides is still a very big
possibility.--BBC

 

 

 

Dow closes above 29,000 as market rally continues

US share market indexes have hit new highs, with the Dow Jones Industrial
Average, closing above 29,000 for the first time.

 

The S&P 500 also closed at a new high, gaining 0.2% to end at 3,289, while
the Nasdaq held steady at 9,258.

 

The gains came as the US and China signed a deal aimed at easing tensions
between the two economic giants.

 

Shares have enjoyed weeks of steady rises, during which markets seemed
impervious to bad news.

 

The three major US indexes rose about 30% in 2019, recording their best year
since 2013 despite average earnings growth estimated at a far more modest
1%.

 

Most analysts are predicting further gains in 2020.

 

Weak earnings

"The sentiment really has improved," said Howard Silverblatt, senior index
analyst at S&P Dow Jones Indices.

 

Just a few months ago, fears of a recession were the talk of Wall Street and
the Federal Reserve lowered rates in an effort to shore up the US economy.

 

But in recent weeks, investors have appeared to shrug off confrontation
between the US and Iran, as well as weak earnings from a string of
retailers, including Target on Wednesday.

 

US jobs growth slows in December

US and China sign deal to ease trade war

Investors remain largely positive about growth prospects, especially given
the low interest rates which typically encourage companies to invest, said
Andrew Lo, finance professor at MIT's Sloan School of Management.

 

"There's a lot of reasons to be optimistic," he said. But, he added it
"wouldn't take a lot to dramatically shift people's perceptions."

 

Outshine

Mr Silverblatt said the Fed's decision to cut rates drove the rally in the
autumn, while relief over the US-China deal also explains some of the gains.
Tensions between the US and Iran have appeared to ease since the US strike
killing Iranian general Qasem Souleimani.

 

Stocks also continue to appeal to investors for the simple reason that they
continue to outshine other investment options.

 

"Fear of missing out is a major item," Mr Silverblatt said. "The nervousness
and concern on the street seems like it's just as high as it has been over
the last couple of months."

 

Mr Lo concurred: "People don't have any better places to put that money but
at some point ... when push comes to shove and there is some significant
instability, you will see a tremendous outflow."--BBC

 

 

German economy sees weakest growth since 2013

The German economy grew by 0.6% last year, according to official figures,
its weakest performance since 2013.

 

The German statistics office said growth was driven mainly by household
spending.

 

Business investment in machinery and equipment was weaker, however. Exports
did grow but more slowly than in previous years.

 

Industrial production, excluding construction, fell by 0.5%.

 

The statistics office has not yet published full data for the final quarter
of last year, but has enough information to assess the impact on the year as
a whole.

 

Claus Vistesen, of Pantheon Macroeconomics, says growth in the final three
months of last year was likely to have been about 0.1% to 0.2%.

 

That follows very weak growth in the third quarter and a small decline in
economic activity in the three months period before that.

 

Those previous quarterly figures showed Germany avoided a recession last
year in the sense of two consecutive quarters of contraction.

 

But they, and the new figures for the full year, show Europe's largest
economy struggling to generate growth.

 

Car output

Germany is a big exporter (the third largest after two much larger
economies, the US and China). There has been a persistent concern that the
rising tensions in international trade since President Donald Trump took
office would hit Germany particularly hard.

 

There is some evidence of that in the new figures. Exports did grow,
although at 0.9% it was a relatively weak contribution to the economic
expansion.

 

Services and especially construction experienced growth last year, but
industry contracted. The statistics office said "especially low output in
the automotive industry contributed to the decrease".

 

Economic activity per person barely grew at all - just 0.1%. Output per
employed person actually fell by 0.3%. Employment has continued to expand in
German despite the weak growth although the rate of new job creation has
slowed.

 

Unemployment in Germany at 3.1% is among the lowest in the world.-BBC

 

 

 

Amazon in India: Jeff Bezos announces $1bn Indian investment

Amazon boss Jeff Bezos has announced a major investment in India, saying the
country is a key growth market.

 

Mr Bezos said his firm will invest $1bn (£770m) in digitising small and
medium businesses - allowing them to sell and operate online.

 

Speaking at a company event in New Delhi, he also said the 21st Century is
"going to be the Indian century".

 

The e-commerce billionaire's three-day visit to India is expected to be
marred by protests.

 

Why India is greeting Jeff Bezos with protests

Thousands of small traders across 300 cities have planned demonstrations
against what they see as Amazon's negative impact on the local retail
market.

 

They allege Amazon is driving them out of business by offering sharply
discounted products and favouring a few big sellers on its platform.

 

Amazon denies the allegations.

 

During today's address Mr Bezos said: "The dynamism, the energy... the
growth. This country has something special - and it's a democracy."

 

He also said the online retail giant expects to export $10bn worth of
India-made goods by 2025, and that Amazon has already committed to $5.5bn of
investment in the country.

 

India's e-commerce market is currently dominated by Amazon and Flipkart,
which is owned by US retail giant Walmart.

 

But both companies suffered a setback last year when the Indian government
introduced new laws that restrict foreign-owned online retailers from
selling goods from their own subsidiaries.

 

Asia's richest man takes on retail giant Amazon

Why did Walmart buy India's Flipkart?

Why Amazon and Flipkart will spend $3bn in India

Earlier this month a conglomerate run by Asia's richest man has started a
service that aims to compete with Amazon in India.

 

Mukesh Ambani's Reliance Industries said it had been inviting people to sign
up to its grocery delivery service.

 

The company is aiming to use its massive mobile phone customer base as a
springboard for the business.--BBC

 

 

 

Fall in inflation raises prospects of interest rate cut

The UK's inflation rate fell to its lowest for more than three years in
December, increasing speculation that interest rates could be cut.

 

The rate dropped to 1.3% last month, down from 1.5% in November, partly due
to a fall in the price of women's clothes and hotel room costs.

 

December's inflation rate was the lowest since November 2016.

 

Analysts said it raised the chances of a rate cut, with inflation below the
Bank of England's target of 2%.

 

"Very soft UK inflation data for December leaves the door wide open for a
Bank of England rate cut on 30 January," said Melissa Davies, an economist
at stock broker Redburn.

 

The Bank's main interest rate is used by banks and other lenders who set
borrowing costs.

 

It affects everything from mortgages to business loans and has a big effect
on the finances of individuals and companies.

 

City traders who spend their working lives trying to anticipate moves in
interest rates are convinced of it today: the Bank of England is likely to
cut the official interest rate when it meets later this month. Market
indicators suggest a 60% chance of it happening.

 

Here's the thinking: at 1.3%, the official measure of consumer price
inflation in the year to December was lower than expected and well below the
2% target. With the economy barely growing (even shrinking if you are
prepared to rely on the official November estimate of a 0.3% contraction)
there's little sign of inflationary pressure in the near future.

 

Granted, there was a sharp rise in the price of crude oil - a barrel was up
4.9% in the month and 17.4% on the year. But in spite of that, producers
were still paying slightly less for their raw materials and supplies than
they were last year.

 

The assumption has been that the November contraction was a temporary period
of weakness induced by pre-election political uncertainty - and that there
will be a recovery as businesses and consumers regain a new-found confidence
to spend and invest.

 

The risk the MPC will have to contend with is that that hoped-for
post-election recovery does not materialise.

 

Earlier on Wednesday, Michael Saunders, one of the rate setters on the
Bank's Monetary Policy Committee (MPC), reiterated his view that borrowing
costs should be lowered.

 

"It probably will be appropriate to maintain an expansionary monetary policy
stance and possibly to cut rates further, in order to reduce risks of a
sustained undershoot of the 2% inflation target," he said.

 

Last week, two other rate setters and Bank governor Mark Carney also
suggested that rates could be cut, depending on how the economy performs.

 

On Sunday, MPC member Gertjan Vlieghe told the Financial Times he would
consider voting for a rate cut depending on how the economy has performed
since the December election.

 

However, members of the MPC could take the latest inflation figure with a
pinch of salt, said Samuel Tombs, chief UK economist at Pantheon
Macroeconomics.

 

"Half of the decline in the headline rate was driven by a sharp fall in
volatile airline fares inflation," he said.

 

He expects inflation to rise to 1.6% in the first three months of 2020, and
this could mean enough MPC members will decide to wait rather than voting to
cut rates.

 

Emma-Lou Montgomery, associate director for personal investing at money
manager Fidelity International, said the inflation data painted a bleaker
picture for the UK economy than before.

 

"Today's UK CPI figures simply add to the growing sense of unease many feel
when considering the outlook for the UK economy, with the rate of inflation
continuing to lag well below the Bank of England's target of 2%."

 

A cut would ease the finances of borrowers, but create a tougher environment
for savers, she added.-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
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.

 


 

 


(c) 2020 Web: <http:// www.bulls.co.zw >  www.bulls.co.zw Email:
<mailto:info at bulls.co.zw> info at bulls.co.zw Tel: +263 4 2927658 Cell: +263 77
344 1674

 


 

 

 

 

 

 

Invest Wisely!

Bulls n Bears 

 

Telephone:      <tel:%2B263%204%202927658> +263 4 2927658

Cellphone:      <tel:%2B263%2077%20344%201674> +263 77 344 1674

Alt. Email:       <mailto:info at bulls.co.zw> info at bulls.co.zw  

Website:
<http://www.google.com/url?q=http%3A%2F%2Fwww.bulls.co.zw&sa=D&sntz=1&usg=AF
QjCNH8LYgdY55h-XKseuM8Kpr-JKdfhQ> www.bulls.co.zw 

Blog:
<http://www.google.com/url?q=http%3A%2F%2Fwww.bulls.co.zw%2Fblog&sa=D&sntz=1
&usg=AFQjCNFoIy6F9IXAiYnSoPSgWDYsr8Sqtw> www.bulls.co.zw/blog

Twitter:         @bullsbears2010

LinkedIn:       Bulls n Bears Zimbabwe

Facebook:
<http://www.google.com/url?q=http%3A%2F%2Fwww.facebook.com%2FBullsBearsZimba
bwe&sa=D&sntz=1&usg=AFQjCNGhb_A5rp4biV1dGHbgiAhUxQqBXA>
www.facebook.com/BullsBearsZimbabwe

Skype:         Bulls.Bears 



 

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20200116/244f8817/attachment-0001.html>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image001.jpg
Type: image/jpeg
Size: 43166 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20200116/244f8817/attachment-0005.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image002.jpg
Type: image/jpeg
Size: 35491 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20200116/244f8817/attachment-0006.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image003.jpg
Type: image/jpeg
Size: 33750 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20200116/244f8817/attachment-0007.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image004.jpg
Type: image/jpeg
Size: 31402 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20200116/244f8817/attachment-0008.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image005.jpg
Type: image/jpeg
Size: 4846 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20200116/244f8817/attachment-0009.jpg>