Major International Business Headlines Brief::: 13 July 2020

Mon Jul 13 05:28:28 CAT 2020

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Major International Business Headlines Brief::: 13 July 2020

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

ü  South Africa set to make SAA funding commitment, official says

ü  Congo central bank keeps 2020 economic growth forecast at -2.4%

ü  South Africa's rand recovers but caution remains, stocks slip

ü  South Africa's Eskom implements first power outages in months

ü  Nigeria's President Buhari to sign revised 2020 budget into law on Friday
-presidency

ü  S.Africa's banks mull how to avoid loan defaults when virus relief ends

ü  Nigeria's excess crude account held $72.41 million as of July 7: finance
minister

ü  Botswana to ration fuel amid shortage

ü  South African court dismisses appeal against SAA layoff ruling

ü  Foreign mineworkers return to South African mines after lockdown

ü  Primark says no to £30m job retention bonus

ü  Emirates set to cut 9,000 jobs, citing pandemic

ü  Liz Truss: US trade deal ‘won’t mean lower food standards’

ü  TikTok: Amazon says email asking staff to remove app 'sent in error'

ü  Package holiday firms told to sharpen up on refunds

 <mailto:info at bulls.co.zw> 

South Africa set to make SAA funding commitment, official says

JOHANNESBURG (Reuters) - The South African government is “on course” to
provide a funding commitment for the restructuring of loss-making South
African Airways (SAA), a senior official said on Friday.

The comments by the acting director-general of the Department of Public
Enterprises (DPE) will ease concerns at the airline after the finance
ministry told lawmakers last week it would not provide any new money.

SAA’s creditors are due to meet on July 14 to vote on a restructuring plan
that envisages scaling back the airline’s fleet and shedding jobs but
requires at least 10 billion rand ($592 million) of new funds to work.

If the government has not made a commitment on funding soon after the vote,
the plan could have to be reworked or rescue efforts abandoned.

“The first thing we need to do is give an indication to the business rescue
practitioners by the 15th that we are in a position to provide funding,” the
DPE’s Kgathatso Tlhakudi told Reuters. “That we are on track to be able to
achieve.”

Tlhakudi said the DPE, the ministry responsible for SAA, was currently
“socialising the idea” within government that it needed to do the initial
heavy-lifting to clean up SAA’s balance sheet.

“There are very few investors that will want to come and clean up, deal with
the legacy issues, so in our engagements within government we are getting
that position across.”

SAA has already taken more than 20 billion rand in bailouts in the last
three years alone.

Tlhakudi said the DPE was cognisant of the country’s fiscal constraints and
was speaking to potential investors to try to ease the burden on public
finances.

The government has been approached by a major airline interested in working
with SAA, but those discussions are at an early stage, he said, giving no
details on what sort of partnership was under discussion. There was also
interest in SAA’s maintenance, catering and cargo operations, he said,
without elaborating.

He said observers should not read much into the slide in a finance ministry
presentation that said no more funds would be provided to SAA. “We should
rely more on statements that have been made by cabinet, because that’s where
ultimately the call will have to be made.”

The cabinet said last month that it supported efforts to restructure SAA and
mobilise funds from a variety of sources, including equity partners.

($1 = 16.8943 rand)

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Congo central bank keeps 2020 economic growth forecast at -2.4%

(Reuters) - The Democratic Republic of Congo’s central bank kept its 2020
economic growth forecast unchanged at -2.4% because of the uncertainty over
the COVID-19 pandemic.

“This situation has contributed to weakening growth prospects both globally
and regionally,” the central bank said in a statement.

South Africa's rand recovers but caution remains, stocks slip

JOHANNESBURG (Reuters) - South Africa’s rand recovered in afternoon trade on
Friday, after sliding earlier due to concerns about rising COVID-19 cases
both at home and abroad.

At 1505 GMT the rand was 0.42% firmer at 16.7800 per dollar, bouncing back
from a session low of 16.9725 hit earlier.

“Given all the uncertainty surrounding the coronavirus pandemic and global
economic recovery prospects, market sentiment continues to switch between
risk-on and risk-off in a matter of seconds,” said market economists at ETM
Analytics.

“If the market really bought into the economic growth optimism and recovery
narrative, it wouldn’t be hedging its bets with gold purchases. Markets may
well be positioning for additional monetary and fiscal stimulus measures in
the months ahead.”

The United States on Thursday reported the largest one-day increase in
coronavirus cases by any country since the start of the pandemic, while
cases have jumped in major cities such as Melbourne, Tokyo and Hong Kong.

Locally, confirmed COVID-19 cases are also on the rise.

The Johannesburg Stock Exchange (JSE) slipped as investor optimism about a
market recovery was overshadowed by continued worry over coronavirus.

The benchmark FTSE/JSE All Share Index dropped by 0.64% to close the week at
55,431 points while the FTSE/JSE Top 40 Companies’ Index closed down 0.74%
to 51,154 points.

The benchmark index rose 1.67% this week.

Bonds firmed, with the yield on the benchmark 2030 government issue dropping
15.5 basis points to 9.495%.

South Africa's Eskom implements first power outages in months

JOHANNESBURG (Reuters) - Struggling South African power utility Eskom
implemented planned power outages for the first time since March on Friday,
ending a period of unusually stable power supply thanks to reduced demand
during a coronavirus lockdown.

Eskom, which generates the vast majority of South Africa’s power but for
years has had to manage supply from its ageing coal-fired power plants using
blackouts, said the outages would last from 1000 GMT until 2000 GMT though
the system could remain under pressure through the weekend.

“This loadshedding has been caused by an increase in plant breakdowns
exceeding 3,000 megawatts of capacity,” Eskom said in a statement, using the
local term for power cuts.

It added it was working to return broken-down generation units back to
service and asked the public to limit their usage to take some of the burden
off.

Eskom had to implement some of the worst blackouts in years in late 2019,
putting further strain on South Africa’s already struggling economy which
tipped into recession in the final quarter of the year.

But it received an unexpected respite when the pandemic struck and the
government implemented a nationwide lockdown, taking many power-hungry
industries offline for weeks.

The vast majority of the economy has now returned to work, and demand is
also higher due to cold weather.

Its Chief Executive Andre du Ruyter told lawmakers in May that it expected
only three days of stage-one power cuts, in which up to 1,000 megawatts are
taken off the national grid, during the winter period.

Nigeria's President Buhari to sign revised 2020 budget into law on Friday
-presidency

LAGOS (Reuters) - Nigeria’s President Muhammadu Buhari will on Friday sign
into law a 10.8 trillion naira ($28.38 billion) revised 2020 budget passed
by lawmakers last month, the presidency said on Twitter on Thursday.

The budget was passed by parliament in June after it was revised as part of
an effort by the government to tackle the new coronavirus pandemic and low
oil prices.

Finance Minister Zainab Ahmed also on Thursday held talks with lawmakers
during which she provided details of a framework for the government’s
2021-2023 spending plan, which she said she plans to submit to parliament
later this month.

The benchmark price for oil for the 2021 fiscal year was pegged at $35, and
then $40 for 2022 and 2023, respectively, according to a statement issued by
the office of the leader of the Senate, parliament’s upper chamber.

The framework is used to calculate the government’s budget.

Oil production was placed at 1.86 million barrels per day (mbpd) for 2021,
2.09 mbpd for 2022, and 2.38 mbpd for the 2023. The exchange rate was set to
remain at 360 naira per dollar.

Nigeria, the top oil producer in Africa, is heavily reliant on crude oil
sales which make up around 90% of foreign exchange earnings.

($1 = 380.5000 naira)

S.Africa's banks mull how to avoid loan defaults when virus relief ends

JOHANNESBURG (Reuters) - South African banks are looking at options ranging
from debt consolidation to new ways of leveraging equity to avoid defaults
when coronavirus-related debt relief measures end, industry officials said.

The banks gave customers in good standing relief on loans during the
pandemic, including payment holidays of up to three months. But some
consumers are still in trouble.

Some banks have offered extensions, while others like Capitec offered to
refund interest accumulated during payment holidays.

Jacques Celliers, CEO of FirstRand’s retail division, said the lender was
worried about the impact of job losses and wanted to avoid a wave of
property evictions that would affect prices.

Mortgages make up 59% of 489 billion rand ($28.88 billion) in loans
considered at risk, according to the Banking Association of South Africa
(BASA).

“We’ll have to be very clever between all of us as to how do we navigate the
property game,” Celliers said.

Options could include leveraging the equity in properties, including family
members’ properties, in new ways, using pensions or granting term extensions
on mortgages, he said.

Anton de Wet, chief client officer in Nedbank’s retail and business bank,
said debt consolidation on home loans was a possibility and that term
extensions, as well as other solutions, could be discussed with customers
individually.

Standard Bank also said its solutions were based on individual clients’
circumstances. Absa said it would make an announcement on its post-debt
relief plans in the near future.

Banks have already warned of rising bad loans: Capitec, for instance, said
its credit impairment charge was 145% above expectation and it had increased
provisions by 3.3 billion rand since February.

Some banks have applied a less-stringent approach to provisioning for loans
granted relief after regulators allowed more flexibility in strict new
accounting rules.

BASA managing director Bongiwe Kunene said higher provisions could be
triggered if consumers can’t keep up with payments following the relief
period.

($1 = 16.9307 rand)

Nigeria's excess crude account held $72.41 million as of July 7: finance
minister

ABUJA (Reuters) - Nigeria’s excess crude account held $72.41 million as of
July 7, the country’s finance minister said on Thursday.

Zainab Ahmed gave the figure during a meeting of the country’s National
Economic Council. The oil savings account, which holds dollar reserves from
sales of crude above the assumed benchmark price, contained $324.54 million
as of Nov. 20 last year.

Botswana to ration fuel amid shortage

GABORONE (Reuters) - Botswana will ration fuel from Thursday, President
Mokgweetsi Masisi announced, in a bid to ease a crippling shortage that has
seen some consumers rush to stock up.

Long queues formed in recent weeks at fuel stations in Botswana’s capital,
Gaborone, as some ran dry. The shortages have disrupted businesses and
threaten to exacerbate the woes of an economy already expected to shrink 13%
this year.

Mokgweetsi said in a televised address that sales will be limited to the
value of 250 pula ($21.40) worth of fuel, though the limit would not apply
to front-line workers and public transport operators.

“We have also started to import fuel through Namibia and Mozambique to
complement supplies from South Africa, where there are disruptions in the
transportation industry,” he said, adding the government did not want
strategic reserves to fall to below five days’ supply, from eight days’
currently.

The southern African country, which consumes about 3.3 million litres a day,
normally keeps reserves at 12 days’ supply.

It has lifted a lockdown imposed to contain the coronavirus but its borders
remain closed, with only essential imports allowed and truckers tested for
the virus and quarantined before they enter.

($1 = 11.6822 pulas)

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 world’s 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 Africa’s 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 country’s 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.

Primark says no to £30m job retention bonus

Primark said it will not take advantage of a £30m handout from the
government, potentially putting pressure on other major firms not to take
taxpayer money.

Chancellor Rishi Sunak announced last week that all businesses will be paid
£1,000 for each employee they bring back from furlough.

Primark placed around 30,000 workers on the government's coronavirus job
retention scheme.

But it said it has now brought them all back and would not ask for the
payment.

"The company removed its employees from government employment support
schemes in the UK and Europe in line with the reopening of the majority of
its stores," said a spokesperson for Primark's owner Associated British
Foods.

"The company believes it should not be necessary therefore to apply for
payment under the bonus scheme on current circumstances."

Announcing the Job Retention Bonus in last week's summer economic update, Mr
Sunak said: "One of the most important things we can do to prevent
unemployment is to get as many people as possible from furlough back to
their jobs."

Companies can get a £1,000 per person bonus if they bring back an employee
from furlough for at least three months after the government's wage payment
scheme ends in October.

There are currently 9.4 million on the government's furlough scheme who, if
they all returned to work, could cost the public purse more than £9bn in
bonus payments.

Mr Sunak said the Job Retention Bonus scheme would be open to "all"
companies.

But Labour leader Sir Keir Starmer criticised the scheme for not being
targeted on those companies that needed it most.

While he agreed that the government "is right to act", he said: "Our concern
is the action they've taken isn't focused on the right places, so the Jobs
Retention Bonus is a bonus for all jobs and many of those jobs, many of the
people would have been brought back in any event.

"Some are really at risk of losing their jobs, so we say it should have been
targeted in the areas that most need it."

Jim Harra, chief executive of HMRC and the Treasury's principal accounting
officer, refused to sign off on the measure, telling the Chancellor in a
letter that it does not represent "value for money".

It is not yet clear if other companies will apply for the bonus. John Lewis
is thought unlikely to take part in the scheme, although the retailer has
yet to make a formal announcement.

A spokesperson for M&S said it "welcomed" the support shown for businesses
during the pandemic.

"However, at this stage, it's too early to confirm our plans to use the
furlough bonus scheme announced by the chancellor earlier this week."

M&S said in May it had put 27,000 staff on furlough who are being brought
back on a gradual basis.

McDonald's said it is "still working through the details of the chancellor's
announcement" and is unable to comment.

Primark said it lost sales of around £650m a month through shutting shops
because of the coronavirus pandemic.

The retailer started to reopen European stores in early May. It then
reopened all 153 of its shops in England on 15 June.--BBC

Emirates set to cut 9,000 jobs, citing pandemic

The president of Emirates said the Middle Eastern airline is set to cut as
many as 9,000 jobs because of the coronavirus pandemic.

It is the first time the world's biggest long-haul carrier has disclosed how
many jobs will be lost.

Prior to the crisis, Emirates had 60,000 staff.

Sir Tim Clark said the airline had already cut a tenth of its staff but
said: "We will probably have to let go of a few more, probably up to 15%."

The global airline industry has been severely impacted by coronavirus, with
activity all but grinding to a halt.

In an interview with the BBC, Sir Tim said Emirates was "not as badly off as
others".

But its current situation marks a steep turnaround in the fortunes of the
airline, which he said before the pandemic was "heading for one of our best
years ever".

The job cuts sweeping the wider aviation industry are fuelling concern
amongst Emirates staff that things might get worse.

The BBC understands there is growing frustration at what they see as poor
communications and transparency from the airline.

At least 700 of the airline's 4,500 pilots were given redundancy notices
this week, which means at least 1,200 have been told their jobs are going
since the coronavirus crisis started.

The cuts have been focused on those who fly Airbus planes, rather than
Boeing aircraft.

Emirates flies superjumbo Airbus A380s which hold around 500 passengers.
Whereas the Boeing 777s it flies hold fewer passengers and are therefore
easier to fill during this period of decreased airline travel.

00Thousands of cabin crew have also been told they are no longer needed.

Further cuts

The International Air Transport Association, which represents 290 airlines,
is forecasting that the world's airlines will lose more than $84bn and one
million jobs this year.

This week United Airlines, one of the big three in the US, warned its staff
that it may have to cut 36,000 staff because of the huge fall in demand for
air travel.

Helane Becker, managing director and senior research analyst at investment
firm Cowen said given "the continuing issues surrounding the pandemic" she
expects US airlines to cull up to 200,000 of their 750,000 staff this year.

US aviation unions are pushing the federal government to add to the $25bn
bailout package it has provided so far.

As part of the conditions for receiving state help, airlines have to protect
jobs until the end of September.

But IATA says there are wider benefits in doing so.

A spokesman said the scale of job cuts in the aviation sector "shows the
severe economic crisis facing the industry and all who depend on air
connectivity".

Adding that its perfectly understandable that governments have put
restrictions in place to try and keep people safe from coronavirus "but this
should be done in the full knowledge of the economic and social
consequences".

Watch Sir Tim Clark's full interview on "Talking Business with Aaron
Heslehurst" this on BBC World News at Saturday 2330 GMT.--BBC

Liz Truss: US trade deal ‘won’t mean lower food standards’

International Trade Secretary Liz Truss has denied the UK is preparing to
water down its food safety standards in order to reach a trade deal with the
US.

"We will not be negotiating that away as part of a trade deal," she told the
BBC.

Her comments follow reports that negotiators are considering allowing
imports of US products that do not meet UK standards.

Boosting agricultural exports is a top US priority for a trade agreement.

Prime Minister Boris Johnson drew outcry earlier this year, when he appeared
to back away from a pledge to maintain bans on chlorinated chicken and
hormone-treated beef in hopes of securing a treaty.

And on Wednesday, farmers drove their tractors to Parliament Square in
London to call for protection for the British farming industry and the
current standards of food production in a post-Brexit economy.

But on a visit to the Port of Southampton, Ms Truss denied the government
would loosen the restrictions.

"It is against the law to import chlorinated chicken and hormone-injected
beef and we will not be negotiating that away as part of a trade deal," she
said.

The UK is looking for a "win-win" deal that will make it easier for UK car
manufacturers and others to sell to the US, she said.

However, the UK will not be bullied into an agreement that does not serve
its interests, she added.

"We're not going to be bounced into a deal by the US - we will take the time
it needs to get a deal that suits the UK," she said.

Ms Truss refused to comment on a leaked letter, in which she reportedly
expressed concerns about the government's plans to phase in checks on EU
goods coming into the UK after the Brexit transition period ends this year.

She reportedly warned fellow ministers that failing to impose full border
controls until July could lead to legal challenges at the World Trade
Organization, increased smuggling, and even weaken the union with Northern
Ireland.

"I'm absolutely confident we have the right plans in place for our border,
and we'll be saying more about that in a few days", she said.

US-UK trade deal progress

Robert Lighthizer, America's top trade negotiator, said at a video
conference hosted by Chatham House on Thursday that he was optimistic the US
and UK would reach a deal.

However, he said the inability to meet in person due to coronavirus had
slowed the talks. He warned there remained "very significant issues that we
have to come to grips with".

Alluding to the dispute over agricultural exports, Mr Lighthizer said that
food safety standards in some cases were "nothing more than thinly veiled
protectionism".

Fears over chlorine-washed chicken and other US farming practices have been
described by Woody Johnson, the US ambassador to the UK, as "inflammatory
and misleading".

Earlier this year, Mr Johnson said it was important that US beef and poultry
should be allowed into the UK.

He said the process was used by EU farmers to treat vegetables, and that it
was the best way to deal with salmonella and other bacteria.--BBC

TikTok: Amazon says email asking staff to remove app 'sent in error'

Amazon has said an email sent to employees asking them to remove the
video-sharing app TikTok from any mobile device that can access their
company email was sent in error.

An internal memo sent to staff earlier on Friday had said employees should
delete the app over "security risks".

The app, owned by a Chinese company, has come under scrutiny because of
fears it could share data with China.

TikTok said it did not understand Amazon's concerns.

"This morning's email to some of our employees was sent in error. There is
no change to our policies right now with regard to TikTok", a company
spokesperson told the BBC.

But earlier on Friday, a memo sent to staff seen by multiple news outlets
stated that the app must be removed from mobile devices.

"Due to security risk, the TikTok app is no longer permitted on mobile
devices that access Amazon email.

"If you have TikTok on your device, you must remove it by July 10 to retain
mobile access to Amazon email", it read.

TikTok said the company had not received any communication from Amazon
before the email went out.

Artificial intelligence-powered short video app TikTok is one of the most
downloaded mobile apps in the world, and its popularity has only grown
during the coronavirus lockdown.

This has drawn the attention of the Trump administration - on Monday,
Secretary of State Mike Pompeo told Fox News that it was considering a ban
on Chinese social media apps.

Mr Pompeo went so far as to say that TikTok users risk their private
information ending up "in the hands of the Chinese Communist Party".

TikTok is owned by Chinese start-up ByteDance, which has taken pains to
point out that its chief executive is American.

It has also said publicly several times that it has never, and will never,
share TikTok users' data with the Chinese authorities.

And on Friday, the firm decided to halt its operations in Hong Kong - a move
designed to show its distance from the Chinese government.

But many people use their smartphones for both recreation and to access
their work email accounts.

TikTok is on many personal smartphones, and with rising numbers of
cyber-security vulnerabilities regularly being discovered in both the
Android and iOS mobile operating systems, perhaps Amazon is now starting to
worry whether the app could perhaps be used to infiltrate devices.

"We still do not understand their concerns, we welcome a dialogue so we can
address any issues they may have and enable their team to continue
participating in our community," TikTok said.

TikTok was launched outside mainland China by Beijing-based ByteDance to
reach a global audience. It increased its popularity during the global
coronavirus lockdowns with about 315 million people downloading the app in
the first three months of this year, according to research firm Sensor
Tower.

US Secretary of State Mike Pompeo and an Australian member of parliament
have recently suggested the app needs more scrutiny over its data and
privacy policies because its headquarters are in China.

Mr Pompeo has banned Department of State employees from downloading the app
and suggested it could also be banned in the US.--BBC

Package holiday firms told to sharpen up on refunds

More than 100 holiday companies have been told to speed up their refunds
policy for coronavirus cancellations.

The Competition and Markets Authority (CMA) has received more than 17,500
complaints from people whose holidays have been hit by the virus.

In an open letter from the CMA, companies have been reminded of the 14-day
refund rule for cancellations.

Travel firms say this has been an unprecedented crisis that put many of them
on the brink of collapse.

Consumers' rights

By law, if a package holiday is cancelled by the provider, then a refund
should be provided for the whole holiday within 14 days.

Many thousands of getaways were cancelled during lockdown, when the Foreign
Office advised against all but essential travel outside of the UK.

The CMA said its investigations found that some businesses may not have been
giving these legally-required refunds.