Major International Business Headlines Brief::: 10 July 2020
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Major International Business Headlines Brief::: 10 July 2020
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ü Elon Musk says full self-driving Tesla tech 'very close'
ü 'UK faces mobile blackouts if Huawei 5G ban imposed by 2023'
ü Taxes will rise to pay for virus, IFS think tank warns
ü John Lewis and Boots to cut 5,300 jobs
ü South African court dismisses appeal against SAA layoff ruling
ü Foreign mineworkers return to South African mines after lockdown
ü Zambia copper production rises to 342,734 tonnes in first five months of
2020 - govt
ü South Africa's manufacturing output falls 49.4% year on year in April
ü Total secures $15.8 bln in funding for Mozambique gas project - FNB
ü Air Namibia allowed to fly again after court suspends licence
cancellation
ü Kenyan shilling weakens against dollar
ü Malawi appoints Wilson Banda as new central bank governor
ü South Africa's rand edges lower ahead of manufacturing data
ü Egypt's annual headline inflation rises to 5.6% in June - CAPMAS
<mailto:info at bulls.co.zw>
Elon Musk says full self-driving Tesla tech 'very close'
Tesla will be able to make its vehicles completely autonomous by the end of
this year, founder Elon Musk has said.
It was already "very close" to achieving the basic requirements of this
"level-five" autonomy, which requires no driver input, he said.
Tesla's current, level-two Autopilot requires the driver to remain alert and
ready to act, with hands on the wheel.
But a future software update could activate level-five autonomy in the cars
- with no new hardware, he said.
Long tail
Speaking via video, Mr Musk told the World Artificial Intelligence
Conference in Shanghai: "I'm extremely confident that level five - or
essentially complete autonomy - will happen and I think will happen very
quickly.
"I feel like we are very close.
"I remain confident that we will have the basic functionality for level five
autonomy complete this year.
"There are no fundamental challenges remaining.
"There are many small problems.
"And then there's the challenge of solving all those small problems and
putting the whole system together."
Real-world testing was needed to uncover what would be a "long tail" of
problems, he added.
'Bold claim'
IHS Markit analyst Tim Urquhart said level five autonomous driving was the
"holy grail" of the industry.
"It's a typically bold claim by Mr Musk," he said.
"Even if Tesla can reliably roll out the technology in a production
environment, the regulatory environment in all the major markets is way
behind allowing completely autonomous vehicles on the road."
Some Tesla users were already misusing the current technology, Mr Urquhart
said.
"I've always slightly questioned the naming of the Tesla system," he said.
"The fact that it's called Autopilot, when it's only a level-two system, is
I think problematic."
"There are no basic requirements with level five - it has to be absolutely
bulletproof, fool-proof, tested in real world environments to the nth
degree." --BBC
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'UK faces mobile blackouts if Huawei 5G ban imposed by 2023'
BT and Vodafone have said their UK customers would face mobile phone signal
blackouts if they are given three years or less to strip Huawei's equipment
out of their 5G networks.
Executives from the network providers told MPs that they wanted at least
five years, and ideally seven, if such an order is made.
The government is expected to announce new curbs on the use of the Chinese
firm's kit within the next two weeks.
Huawei has urged it to take more time.
"There isn't a burning bridge," said Huawei's UK vice president Jeremy
Thompson, adding that it was too soon to determine what impact new US
sanctions would have.
The company also denied claims it would ever act against its clients'
interests, even if told to do so by the Chinese government.
The Science and Technology Committee hearing represents a last chance for
companies to make their cases before government ahead of a decision being
taken.
'No signal'
In January, the government put a cap on Huawei's 5G market share, but
decided that suggested security risks raised by allowing the Chinese firm to
supply the country's telecoms providers could be managed.
Since then, however, Washington has announced fresh sanctions designed to
prevent the company from having its own chips manufactured.
As a consequence, Huawei faces having to source other companies' chips for
use in its equipment.
GCHQ's National Cyber Security Centre is believed to have told the
Department of Digital, Culture, Media and Sport that this means it can no
longer assure the security of Huawei's products.
While it now seems likely the government will opt for a ban of some sort,
the question is when it will come into effect.
Some Tory backbenchers are urging a deadline to be set before the 2024
general election - and there has been speculation that it could be as soon
as 2023.
But Vodafone and BT - which both use Huawei's products in their networks -
said this would be hugely disruptive.
UK government weighs up ban of Chinese firm's telecoms kit
Ministers signal switch in policy over 5G policy
Trump administration claims Huawei 'backed by Chinese military'
"To get to zero in a three-year period would literally mean blackouts for
customers on 4G and 2G, as well as 5G, throughout the country," said Howard
Watson, BT's chief technology and information officer.
He explained the logistics involved in bringing in cranes and shutting off
streets to replace masts, base stations and other Huawei equipment meant
that the only way to meet the timespan would be to switch over multiple
sites in an area at the same time.
3G signals would not be affected as the EE network uses Nokia kit to provide
that service.
Vodafone made a similar case - it uses Huawei's kit in its 2G, 3G. 4G and 5G
networks.
"[Customers] would lose their signal, sometimes for a couple of days,
depending on how big or how intrusive the work to be carried out is," said
Andrea Dona, Vodafone UK's head of networks.
"I would say a five-year transition time would be the minimum,"
Mr Watson added: "A minimum of five years, ideally seven."
'Few more weeks'
Earlier in the hearing, Huawei made the case that it was too soon to decide
on any new restrictions.
Replacing Huawei's 5G equipment will often involve simultaneously swapping
out its 4G base stations and antennas
Executives said that the US had yet to confirm some of the details about the
sanctions, adding they would subsequently need time to see if they could
mitigate the impact.
The company has built up stockpiles of its chips, and believes it could keep
providing equipment based on them for some time to come.
"We can supply our customers with their orders and support the existing
network with spares," said Mr Thompson.
"And in terms of who the alternative [chip] suppliers are, they're not just
Chinese. There are European companies who are also in this space.
"We will be able to share those [details] with you, but that will take a few
more weeks."
A spokeswoman for DCMS said she could not reveal whether the department had
already handed over its recommendations to the prime minister.
Prime Minister Boris Johnson is expected to convene a meeting of the
National Security Council within the coming days to discuss the possibility
of a ban, which could also extend to the country's broadband infrastructure.
The warnings from Vodafone and BT about disruption to customers if Huawei is
removed swiftly sound stark - but, in fact, both firms have softened their
stance.
Last year they seemed determined to battle against any plan to exclude
Huawei from the UK's 5G networks.
Now they seem resigned to the fact that this is going to happen.
Indeed, BT accepts that the threatened US sanctions could mean that within a
couple of years, it won't be able to get hold of reliable Huawei equipment.
Their emphasis now is on timing - they want to make sure the government does
not proceed as rapidly as many Conservative backbenchers would like in
stripping out the Chinese firms' kit.
They understand how the political mood has changed, but will be warning
ministers that disrupting mobile reception, or abandoning the target to get
gigabit broadband to everyone by 2025, would also be bad politics.--BBC
Taxes will rise to pay for virus, IFS think tank warns
Taxpayers face a day of reckoning when the government's massive coronavirus
support measures have to be paid off, experts warn.
The Institute of Fiscal Studies think tank says the economy will remain in a
"support and recovery" phase for some time, but higher taxes are inevitable.
On Wednesday, the chancellor unveiled another £30bn of support, bringing the
total cost to £190bn.
But it was revealed the UK's tax authority queried its value for money.
The most senior civil servant at HM Revenue and Customs (HMRC) wrote to
Chancellor Rishi Sunak about the value of two measures in his summer
statement - the Job Retention Bonus and the eating out support.
'No normal recession'
Wednesday's additional spending announced by Mr Sunak is worth nearly £3,000
for every person in the UK - and more than the entire planned health budget
for 2020-21.
It also means that the cost of the crisis so far has risen by more than 40%
since last month, when the government's spending watchdog, the Office for
Budget Responsibility, estimated it at £133bn.
On Thursday, in its analysis of the latest measures, the IFS predicted that
government borrowing would surge to about £350bn this year. In March, the
government forecast a deficit of about £50bn to £60bn this year.
The IFS said it expected further spending support in the autumn Budget,
perhaps through targeted tax cuts.
However, IFS director Paul Johnson said: "Let's hold in the back of our
minds that a reckoning, in the form of higher taxes, will come eventually.
"This is no normal recession. It's the deepest in history," Mr Johnson said.
The IFS said annual borrowing as a share of the economy was on course to be
its highest outside wartime in more than 300 years.
Mr Sunak has given few details about how he intends to pay for the huge
public spending, but has previously refused to rule out tax rises.
There are some things no chancellor can prepare for - such as what to do if
your economy wipes out 18 years' gains in two months of lockdown.
His solution was to temporarily deep freeze the economy, and pump money into
crisis response. And the thawing process needs more funds, to prevent long
term damage.
Now economists are talking about a deficit, a shortfall of way more than the
£300bn previously expected. It's equivalent to a bigger slice of the economy
than at any time since the Second World War.
And it could get bigger; if more is needed to support the recovery - or in
the event of a severe second wave.
But it's a cost worth bearing if it carries the economy through a
devastating crisis, safeguard the damage to output and jobs - and ensure
taxes get paid.
For at some point, there will have to be a discussion about how we pay this
back.
The government is currently borrowing record amounts on the financial
markets to plug the gap - but that may not be enough. There may have to be
tax hikes, possibly less generous rises in pensions.
But it may be a while until the economy is robust enough to bear that.
'Value for money issue'
Of the policy measures announced in Wednesday's summer statement, the
biggest was the plan to pay employers £1,000 for every furloughed worker
they retain past January. The total bill could rise as high as £9.4bn, but
only if every furloughed worker keeps their job.
But Mr Johnson said there was a "value for money issue" about the scheme.
"A lot, probably a majority, of the job retention bonus money will go in
respect of jobs that would have been, indeed already have been, returned
from furlough anyway," he said. And he said much of the planned cuts in VAT
and stamp duty "will be deadweight".
It has also emerged that the UK tax authority had some doubts. Jim Harra,
HMRC's permanent secretary, wrote to the chancellor earlier this week about
the Job Retention Bonus and Eat Out To Help Out policies.
On both, he said, advice received by HMRC and the Treasury "highlights
uncertainty around the value for money" of the proposals.
However, the correspondence showed the chancellor said the plans should go
ahead because there was a "compelling case".
Businessman Charlie Mullins, founder of Pimlico Plumbers, also questioned if
the job retention bonus was money well spent, as he thought some firms would
only retain staff until they get the cash.
"Firms will either want their staff back, or they won't. I just feel some
employers will take advantage of this scheme," he told the BBC.
Meanwhile, Torsten Bell, chief executive of the Resolution Foundation think
tank, said the financial cost of the crisis, at £190bn so far, was
"approaching the amount we spend on the day-to-day running of our NHS,
schools and colleges each year".
He welcomed the focus on supporting young people and sectors most affected
by lockdown, but added: "The scale of support... risks falling short of what
will be required. The chancellor is taking quite a gamble on the strength of
the recovery in the months ahead."--BBC
John Lewis and Boots to cut 5,300 jobs
Two of the UK's biggest High Street retailers, John Lewis and Boots, have
announced 5,300 job cuts.
Boots has said 4,000 jobs will go, while John Lewis is shutting down eight
stores, putting 1,300 jobs at risk.
The moves come amid warnings that new economic support from Chancellor Rishi
Sunak will not be enough to stop millions of workers losing their jobs.
Mr Sunak admitted that he would not be able to protect "every single job" as
the UK enters a "severe recession".
Boots is consulting on plans to cut head office and store teams and shut 48
of its more than 600 Boots Opticians practices.
It has not yet said which outlets will close, but about 7% of its workforce
will lose their jobs.
John Lewis said department stores in Birmingham and Watford will not reopen
as the coronavirus lockdown eases. It also plans to shut down its At Home
stores in Croydon, Newbury, Swindon and Tamworth and travel sites at
Heathrow airport and London St Pancras.
£1,000 bonus 'may not be enough to protect jobs'
How is furlough changing?
Mr Sunak unveiled a series of measures on Wednesday aimed at saving jobs,
including a one-off £1,000 payment to employers for every furloughed
employee retained to the end of January 2021.
He also announced measures to benefit the hospitality sector, including
giving diners 50% off eating out from Monday to Wednesday in August.
Culture Secretary Oliver Dowden said the moves to support restaurants, pubs
and cafes could also help retail.
"We very much hope that when people go to their local pub or their
restaurant to eat out, those are often in the centre of towns, hopefully
that will encourage the footfall to those areas so we get more people going
to our shops as well," Mr Dowden said, speaking after announcing the
reopening of gyms, indoor pools and outdoor theatres.
John Lewis says some of its stores were in trouble before the virus struck,
while Boots already had plans for a shake-up.
The crisis has forced them to speed up efforts to deal with the rise of
internet shopping.
And just now they face the phasing out of the government-supported furlough
scheme, starting next month.
One by one, retailers are revealing how many staff they will bring back into
stores as the job subsidy is withdrawn.
'Uncertain economic outlook'
Most Boots outlets remained open throughout the lockdown to provide pharmacy
and healthcare services, but the firm said footfall had "dramatically
reduced".
The firm said sales across all Boots UK outlets were down 50% in the third
quarter, and some 70% at Boots Opticians.
"Restrictions are beginning to lift, but with an uncertain economic outlook,
it is anticipated that the High Street will take considerable time to
recover," it said.
Boots said last year that it was reviewing the size of its UK operations
with the possibility that up to 200 stores could be closed.
The managing director of Boots UK, Sebastian James, described the latest
cuts as "decisive actions to accelerate our transformation plan".
John Lewis said the eight stores affected were already "financially
challenged" even before the pandemic struck.
However, Covid-19 had caused customers to move more quickly towards online
shopping and away from stores.
John Lewis Partnership chairwoman Sharon White said: "Closing a shop is
always incredibly difficult and today's announcement will come as very sad
news to customers and partners.
"However, we believe closures are necessary to help us secure the
sustainability of the partnership - and continue to meet the needs of our
customers, however and wherever they want to shop."
Ms White said John Lewis would do everything it could to keep on as many
people as possible.
John Lewis had warned in March it could close shops as a plunge in profits
forced it to cut staff bonuses to their lowest level in almost 70 years.
Former John Lewis boss Andy Street, now mayor of the West Midlands, said the
closure of the chain's flagship Birmingham store was "deeply disappointing".
"At this stage the closure is only a proposal, and one which I believe risks
being a dreadful mistake," he tweeted.
He added that his belief in its potential was "unwavering" and that he would
be making the case for it to stay open.
The planned closure of John Lewis's Watford store has prompted a petition to
save it, which has been signed by 4,400 people so far.
Other John Lewis customers took to Twitter to vent their frustrations.
John Lewis and Boots are the latest in a long line of companies to have made
cuts during the pandemic. Other lay-offs announced include:
· Up to 5,000 job cuts at Upper Crust owner SSP Group
· Up to 12,000 jobs at British Airways
· Up to 700 jobs at Harrods
· About 600 workers at shirtmaker TM Lewin
· 1,900 jobs at Café Rouge-owner Casual Dining Group
· 1,000 jobs at Pret A Manger
· 1,700 UK jobs at plane-maker Airbus
· 1,300 crew and 727 pilots at EasyJet
· 550 jobs are going at Daily Mirror publisher Reach
· 'Jobs loss tsunami'
Unions and analysts have warned that the virus could mean millions of people
end up out of work, warning that government incentives to save jobs were not
large enough to persuade bosses to keep workers.
Len McCluskey, general secretary of the Unite union, said: "With no
modification to the jobs retention scheme, that dreaded October cliff-edge
for businesses and workers has now been set in stone.
"Our fear is the summer jobs loss tsunami we have been pleading with the
government to avoid will now surely only gather pace."
Vivienne King, chief executive at Revo, which represents the retail property
sector, warned that three million retail jobs remained in jeopardy unless
the government undertook "a fundamental review of business rates and direct
financial support to underwrite rents".
Chancellor Rishi Sunak himself told BBC Breakfast: "Is unemployment going to
rise, are people going to lose their jobs? Yes, and the scale of this is
significant.
"We are entering one of the most severe recessions this country has ever
seen. That is of course going to have a significant impact on unemployment
and on job losses."
Lucy Powell, shadow minister for business and consumers, said the job cuts
were "deeply worrying news for staff at John Lewis and Boots" and described
Mr Sunak's statement as "a missed opportunity to protect jobs with properly
targeted support for the businesses and people that need it".--BBC
South African court dismisses appeal against SAA layoff ruling
JOHANNESBURG (Reuters) - A South African court on Thursday dismissed an
appeal by administrators in charge of South African Airways (SAA) against a
ruling which prevented them from laying off staff.
The failure of the appeal means the administrators may have to start
consultations about layoffs from scratch if employees do not accept
severance packages they have been offered.
South African labour law stipulates a minimum two-month consultation period
for layoffs.
The Labour Appeals Court upheld a May ruling that consultations on layoffs
at SAA should wait until after the administrators published a rescue plan
for the loss-making state airline.
That plan was published last month and tweaked earlier this week, after
repeated delays and months of wrangling with the government and unions.
But the administrators, who took over SAA in December, issued notices to
consult on job cuts in March, prompting some unions to approach the courts.
The formulation of a business rescue plan is the central task of the
business rescue practitioner, read the Labour Appeals Court judgment seen
by Reuters.
As the business rescue plan must be published within a short period,
retrenchments would be contained in the plan as opposed to a piecemeal
reconstruction of the company which would allow a decision on retrenchments
before the plan was published.
The administrators said they were studying the judgment. The general
secretary of the NUMSA union, Irvin Jim, celebrated it as a victory on
Twitter.
Foreign mineworkers return to South African mines after lockdown
JOHANNESBURG (Reuters) - Foreign mineworkers have begun returning to South
African mines, though at a slower rate than hoped, as the industry rebuilds
output after the easing of the coronavirus lockdown, the Minerals Council
said on Thursday.
Mines in South Africa, the worlds biggest producer of platinum and chrome
and a major gold and diamond producer, have been raising output after the
virus restrictions, which caused some migrant mineworkers return to their
home countries.
The Minerals Council said 698 foreign mineworkers had returned on Tuesday,
lower than the 1,150 workers they had planned to bring back.
The return of the migrant workers has been delayed due to technical
challenges at border posts and limitations on police staffing, with officers
required to escort returning workers from the borders to quarantine
facilities.
The 10-day plan to return the foreign workers, who make up about 10% of
South Africas mining workforce, will now take double the about of time,
said Niks Lesufi, senior executive for safety and health at the Minerals
Council.
The industry had so far identified 12,500 foreign mineworkers from
neighbouring countrys such as Mozambique, Lesotho and e-Swatini who are
needed to return to South Africa.
The industry, which has around 75% of its workforce back following the
lockdown, has recorded 28 deaths and 3,519 confirmed COVID-19 cases so far.
South Africa has recorded 224,664 cases of COVID-19 and 3,602 deaths,
according to the latest health ministry update on Wednesday.
Zambia copper production rises to 342,734 tonnes in first five months of
2020 - govt
LUSAKA (Reuters) - Zambias copper production increased to 342,734 tonnes in
the first five months of this year, from 330,024 tonnes in the same period
of 2019, the ministry of mines said on Thursday.
Copper production was projected to continue rising in the third and fourth
quarters of 2020 in line with rising prices driven by factors including
growing production of electric vehicles that rely on copper.
South Africa's manufacturing output falls 49.4% year on year in April
JOHANNESBURG (Reuters) - South Africas manufacturing output fell 49.4% year
on year in April during a nationwide lockdown, after contracting by a
revised 5.5% in March, the statistics agency said on Thursday.
Factory production was down 44.3% in April month on month and declined 16.9%
in the three months to the end of April, Statistics South Africa said.
Total secures $15.8 bln in funding for Mozambique gas project - FNB
JOHANNESBURG (Reuters) - French oil major Total has secured $15.8 billion in
funding for its massive liquefied natural gas (LNG) project in northern
Mozambique, according to South African lender FirstRands local unit, FNB
Mozambique.
Total declined to comment.
In a press release published on Wednesday, FNB Mozambique said the financing
contracts for Totals blockbuster development had been signed on Friday.
While this was widely reported in local media at the time, Total has not
confirmed the signing.
FNB... intends to enter other large natural gas projects in Mozambique,
just as it entered into Totals financing, in a consortium of 20 banking
institutions that granted $15.8 billion, for which the last contracts were
signed last Friday, it said.
FirstRands corporate and investment banking unit, Rand Merchant Bank (RMB),
has previously said it was part of the consortium.
The project, Mozambique LNG, is one of several being developed in the
countrys extreme north following one of the largest gas finds in a decade
off its coast.;
Air Namibia allowed to fly again after court suspends licence cancellation
WINDHOEK (Reuters) - Air Namibia will be allowed to temporarily operate
commercial flights after a court late on Wednesday suspended the
cancellation of its air licence, the airline said on Thursday.
Cash-strapped Air Namibias planes were due to be grounded at midnight on
Wednesday after the transport authority cited carriers financial
instability.
The airline, which operates 10 aircraft and has close to 800 staff, requires
around 8 billion Namibian dollars ($469 million) to stay afloat, but only
received a tenth of that in last months budget.
The suspension of Air Namibias service licence has been upended by the
High Court. Air Namibia shall continue to fly all domestic flights as per
published schedule, the airline said.
A hearing on the matter is scheduled for Aug. 3.
The airline has failed to file financial results for a number of years and
is heavily reliant on government bailouts. It also faces possible
liquidation after a European creditor, to which it owes 2.3 million euros
($13.9 million), took a motion to court.
An Air Namibia board member, who declined to be named, told Reuters it would
be more expensive to liquidate Air Namibia than to keep it as a going
concern.
Kenyan shilling weakens against dollar
NAIROBI (Reuters) - The Kenyan shilling weakened on Thursday due to
increased dollar demand from the energy sector and general merchants as
businesses reopen following recent easing of movement restrictions, traders
said.
At 0921 GMT, commercial banks quoted the shilling at 106.75/95 per dollar,
compared with 106.65/86 at Wednesdays close.
Malawi appoints Wilson Banda as new central bank governor
BLANTYRE (Reuters) - Malawis new President Lazarus Chakwera has appointed
Wilson Banda, a former central bank official, as its new governor, a
government statement said on Wednesday.
Chakwera, sworn in in June, also appointed a number of other individuals to
his 31-member cabinet though key positions like the finance minister had
already been announced.
South Africa's rand edges lower ahead of manufacturing data
JOHANNESBURG (Reuters) - South Africas rand backtracked early on Thursday
after gaining ground in the previous session as investors opted to take
profits ahead of local manufacturing data expected to highlight the weakness
of the real economy.
At 0700 GMT the rand was 0.12% weaker at 16.9400 per dollar.
The currency advanced more than 1% against the U.S. currency on Wednesday as
concerns about rising coronavirus infections globally and in the United
States prompted a selloff in the dollar as investors looked for yield in
higher-risk emerging market assets.
But this demand subsided overnight with key data releases domestically, in
Europe, and a weekly jobs report in the United States making investors more
cautious.
Manufacturing production figures for April set to be published by Statistics
South Africa at 1100 GMT are likely to show a deep contraction.
Bonds were flat in early trade, with the yield on the benchmark 2030
government issue up 0.5 basis points to 9.69%.
Egypt's annual headline inflation rises to 5.6% in June - CAPMAS
CAIRO (Reuters) - Egypts annual urban consumer price inflation increased to
5.6% in June from 4.7% in May, state statistics agency CAPMAS said on
Thursday.
Month-on-month headline inflation stood at 0.1% in June, from 0% in May, the
agency said.
INVESTORS DIARY 2020
Company
Event
Venue
Date & Time
Companies under Cautionary
Bindura Nickel Corporation
Padenga Holdings
Delta Corporation
Meikles Limited
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