Major International Business Headlines Brief::: 20 July 2020

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Major International Business Headlines Brief::: 20 July 2020

 


 

 


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ü  Tata Steel: Job fears at Port Talbot over furnace plan

ü  Klarna: We tightened our lending in lockdown

ü  Government 'must stop garment worker exploitation'

ü  TikTok's UK headquarters in doubt amid US pressure

ü  World faces staggering jobs challenge, says Microsoft president

ü  Revamped South African Airways could be run independently, says Gordhan

ü  Zambia's state investment arm be operator of mines in future, says govt

ü  Algeria sees state carrier's losses from coronavirus at $272 mln this
year

ü  Nigerian banks to limit debit card spending abroad to ease FX risk

ü  Egypt aims to import 600,000-700,000 tonnes of sugar in FY 20-21 -
official

ü  Total signs $14.9 bln debt financing for huge Mozambique LNG project

ü  POLL: S.Africa's Reserve Bank to cut rates again, by modest 25 bps

ü  Nigeria inflation rises in June, food and healthcare cost weigh

ü  Zambia rejects Glencore copper mine's suspension plan

 

 

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


Tata Steel: Job fears at Port Talbot over furnace plan

There are fears "thousands and thousands" of jobs could be at risk at Tata
Steel in Port Talbot.

 

Aberavon MP Stephen Kinnock said reported plans to shut two blast furnaces
and replace them with electric arc furnaces raised "massive questions" about
the future of the steel industry.

 

But the Tata group said no decisions had been made and described the reports
as "unsubstantiated speculation".

 

The Community Union said it was seeking urgent clarification from the
company.

 

Mr Kinnock said he had found out through newspaper reports that Tata Steel
had reportedly pitched the plan to the UK government.

 

"They should not be making those kinds of proposals without discussing this
first with the workforce and the trade unions," he said.

 

"What I would also say is the blast furnaces at the Port Talbot steelworks
are an absolutely vital part of primary steel making in Wales and in the UK,
and if you don't have those blast furnaces you're not able - with an
electric arc furnace model - to produce anything like the same quality and
variations of steel.

 

"So this proposal raises massive questions and the future of the industry -
thousands and thousands of jobs are on the line."

 

'Unsubstantiated speculation'

In a statement a spokesperson for Tata Steel Europe said its UK operations
faced "structural challenges" caused by the pandemic.

 

"We are in active discussions with the UK government on several options for
the future of our UK operations, including potential co-operation and
participation from the government to create a sustainable decarbonised
footprint for the future.

 

"Discussions with the government are constructive and ongoing, and at this
stage no decisions have been made.

 

"It would therefore be inappropriate to comment on unsubstantiated
speculation about the outcome of these discussions or the potential impact
of any changes to secure our sustainable long-term future.

 

"If and when we do have progress to report, we will first inform our
employees and consult with our employee representatives."

 

Production fears

A spokesman for Community, the steelworkers' union, said: "We are seeking
urgent clarification from Tata but rest assured the unions will not accept
the end of blast furnace steel production at Port Talbot, which would leave
the UK unable to make a range of specialist steels.

 

"Steel production accounts for half the jobs at Port Talbot and this plan
would devastate the town and the community.

 

"If necessary we will be prepared to fight to protect our members
livelihoods and the future of our industry."

 

It comes weeks after Tata Steel confirmed it was seeking government support
amid reports it is close to securing a bailout worth hundreds of millions of
pounds.

 

The steel industry was suffering before the pandemic but demand has now
dived.--BBC

 

 

 

 


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Klarna: We tightened our lending in lockdown

Buy now, pay later service Klarna has seen a boom in business during
Britain's lockdown.

 

That includes a 105% increase in the number of running shoes purchased using
its services, a 60% hike in beauty product sales and "significant uplift" in
purchases of bicycles and cycling accessories.

 

"We saw our volumes increase during that period just reflecting the increase
in digital transactions generally," Luke Griffiths, Klarna's vice president,
told BBC Radio 5 Live's Wake Up To Money.

 

However, as sales increased but more shoppers faced the financial
uncertainty of lockdown, the company did tighten its rules on lending.

 

"Obviously with people's financial circumstances changing during this
period, we have constantly reviewed our policies around the type of customer
that we accept," Mr Griffiths said.

 

He says the firm is now only accepting customers who it believes will and
can repay on time.

 

As a result, he does not believe Klarna will see an increase in defaults,
despite rising levels of financial hardship

 

"[Klarna's] default rate is less than 1% and we are working super hard to
make sure that we are only accepting customers that can pay over time.

 

"If anything, it will be at the front end that we are rejecting consumers
because we don't feel they will be able to pay, rather than on the back end
which is customers who are unable to pay."

 

Klarna is just one of several buy now, pay later services that have seen
enormous growth over the last few years.

 

It is used by eight million customers in the UK alone and is often displayed
as a payment option across the websites of its many retail partners. The
main other players in this growing market are ClearPay and Laybuy.

 

At the start of the year, a report from payments firm Worldpay suggested
that these kinds of deferred payment services were growing at a rate of 39%
a year and were set to double their market share by 2023, compared to 2019.

 

That means that buy now, pay later services are the fastest growing online
payment method in the UK, growing twice as quickly as bank transfers.

 

'Really thinking about affordability'

But some consumer groups and debt charities have expressed concern over this
growing trend for postponing payments.

 

Sue Anderson from the debt charity StepChange says they are seeing a rise in
the number of people seeking debt help who have outstanding buy now, pay
later debts.

 

"Buy now pay later is marketed hard to consumers on the basis of
convenience," she says. "That's all well and good, but the conceptual
concern is that deferring payment allows you, perhaps even encourages you,
to postpone really thinking about affordability until later.

 

"By that time, with the goods in your hand, it may be less likely that
you'll go through the process of deciding against them and returning them.
That isn't necessarily helpful if your finances are stretched and if you
would otherwise have decided against buying."

 

She says it is unlikely that using buy-now-pay-later will be the sole cause
of someone's debt problems, as issues are more often caused by a sudden loss
of income. However, she says she is beginning to see more clients who do owe
money on this basis which is when "they turn to us".

 

If you're worried about any kind of debt then there is help available.
Citizens Advice has specialist money advisers, while other organisations
that can help include StepChange, Christians Against Poverty, Debt Advice
Foundation, National Debtline and the Debt Support Trust.--BBC

 

 

 

Government 'must stop garment worker exploitation'

More than 50 MPs and peers have written to the home secretary urging her to
do more to protect UK garment factory workers from exploitation.

 

It follows reports of staff at factories in Leicester being underpaid and
unprotected from Covid-19.

 

Fast fashion brands Boohoo and Quiz were both accused of using unethical
suppliers in the city and have since vowed to investigate.

 

The government said exploitation for commercial gain was "despicable".

 

The letter - which was also signed by investors, charities and retailers
such as Asda and Asos - said concerns around unethical use of labour in the
UK's garment industry had been raised "multiple times" in the last five
years by academics, retailers and MPs, but little had been done.

 

It said "thousands more" could be exploited without stronger government
action.

 

"The public want to know that the clothes they buy have been made by workers
who are respected, valued and protected by the law," said Helen Dickinson
OBE, boss of the British Retail Consortium, which coordinated the letter.

 

Last week Quiz said it had suspended a supplier after reports that a factory
in Leicester offered a worker just £3 an hour to make its clothes.

 

The national minimum wage for people over 25 years-old is £8.72 an hour.

 

Rival retailer Boohoo was similarly accused of using a factory that
underpaid workers, while also doing nothing to stop the spread of
coronavirus.

 

The letter urged Home Secretary Priti Patel to bring in a new licensing
scheme for garment factories that would:

 

Protect workers from forced labour, debt bondage and mistreatment, as well
as ensuring the payment of the National Minimum Wage and holiday pay

Prevent rogue businesses from undercutting compliant manufacturers

And encourage retailers to source their clothing from the UK, supporting the
development of an "ethical, world-leading industry".

On Friday, Boohoo boss John Lyttle wrote to Ms Patel urging her to adopt the
proposals.

 

"We're taking action to investigate allegations of malpractice in our supply
chain and we ask government to take action too," he said.

 

Both Boohoo and Quiz have said the claims made about their suppliers - if
true - are "totally unacceptable" and have promised to take action.

 

'Free from exploitation'

The National Crime Agency has also confirmed it is investigating Leicester's
textile industry over allegations of exploitation, although it did not
comment on Boohoo or Quiz specifically.

 

Minister for Safeguarding, Victoria Atkins, said: "Exploiting vulnerable
people for commercial gain is despicable and this government will not stand
for it.

 

"We expect all companies implicated in these allegations to conduct a full
and thorough investigation to ensure that their supply chains are free from
labour exploitation.

 

"We have liaised with relevant agencies regarding alleged working practices
at garment factories in Leicester. We await the results of these
investigations."--BBC

 

 

 

TikTok's UK headquarters in doubt amid US pressure

TikTok's plan to base its international HQ in the UK has been thrown into
doubt following pressure by Washington over the Chinese firm's future in the
US.

 

ByteDance, owner of the video sharing app, has had talks with the government
about basing its HQ in London.

 

But the US is considering banning TikTok and may only allow it to keep
operating if it splits from China and becomes an American company.

 

"We remain fully committed to investing in London," said a ByteDance
spokesman.

 

A spokeswoman for the Department for International Trade said: "ByteDance's
decision on the location of their global HQ is a commercial decision for the
company."

 

It comes as tensions mount between the UK and China over the government's
recent decision to order the removal of Huawei's 5G equipment from Britain's
mobile networks by 2027.

 

There are fears it could prompt a tit-for-tat economic war between the two
countries.

 

Chinese ambassador to the UK, Liu Xiaoming, told The Andrew Marr Show: "We
are still evaluating the consequences. This is a very bad decision."

 

Asked whether China would punish UK companies operating in China, Mr Liu
said: "We do not want to politicise the economy. That is wrong."

 

But he said: "It is wrong for the United Kingdom to discriminate [against a]
Chinese company because of pressure from the United States."

 

'In the crosshairs'

The US has already implemented a number of sanctions against China's Huawei.

 

The Trump administration claims that the Chinese telecoms firm provides a
gateway for the state to spy on and potentially attack countries that use
its equipment.

 

Huawei strongly denies the claims.

 

George Magnus, research associate at University of Oxford China Centre, said
it was "hard to predict" how the Chinese government would retaliate for the
Huawei decision.

 

"But we expect British companies will be in the crosshairs of all of this,"
he said.

 

China is an important market for British business.

 

Jaguar Land Rover, which is owned by India's Tata Motors, sells its vehicles
to China. Last month it borrowed £560m from five Chinese banks after sales
dried up because of the coronavirus.

 

China is also a major investor in the UK, in particular the nuclear
industry. China General Nuclear Power Corporation has invested around £3.6bn
in the UK, including the Hinkley Point nuclear power project in Somerset.

 

Josh Hardie, deputy director general of the Confederation of British
Industry, said: "Post-Covid, promoting trade will be an important plank of
our recovery, so we must think carefully about a future relationship that
balances UK global competitiveness with wider interests. "

 

"We do not want to politicise the economy," Chinese ambassador Liu Xiaoming
claimed to the BBC about potential repercussions for UK businesses based in
China after the government U-turn on Huawei.

 

But given how trade is being used as a political weapon by both sides, it's
impossible to see how this could not be the case.

 

China has form in targeting companies as a proxy for the countries that it
is rowing with.

 

Take Australia, which has blocked Huawei from its national infrastructure
since 2012.

 

China has recently banned some of its beef businesses and put tariffs on
barley, designed to hit the country's important agricultural sector.

 

On the other hand, China is sinking vast sums of money into major
infrastructure in the UK, such as nuclear power plants.

 

Huawei alone is investing £1bn in developing chips in a new facility in
Cambridge.

 

These projects are just part of the deep economic interdependence between
the UK and China - which could just still prove to be the glue holding an
ever frostier relationship together.

 

As Emily Taylor of Chatham House's International Security Programme argues:
"Mutual dependence creates stability and if that's hacked away at, global
stability will suffer."

 

TikTok currently employs around 1,000 people in Europe, with the majority of
those based in the UK and Ireland.

 

The Sunday Times reported that a decision by TikTok to build its
headquarters in the UK has the potential to create 3,000 jobs.

 

The Chinese video-sharing platform is hugely popular and the app has been
downloaded two billion times.

 

US Secretary of State Mike Pompeo - who is visiting the UK this week - has
previously said Washington is considering banning TikTok.

 

But last week President Trump's chief economic adviser Larry Kudlow appeared
to change course and said: "As has been reported in some places I think
TikTok is going to pull out of the holding company which is China-run and
operate as an independent American company.

 

"That's a much better solution than banning [or] pushing away."

 

Mr Pompeo claims that America's TikTok users are at risk of their data
ending up "in the hands of the Chinese Communist Party".

 

A spokesperson for TikTok said: "We have never provided user data to the
Chinese government, nor would we do so if asked."

 

India has already blocked TikTok as well as other Chinese apps. Australia,
which has already banned Huawei and telecom equipment-maker ZTE, is also
considering banning TikTok.--BBC

 

 

 

World faces staggering jobs challenge, says Microsoft president

The world is facing a staggering jobs challenge with a quarter of a billion
people set to lose their job this year, the president of Microsoft has said.

 

Brad Smith says millions will need to learn new skills to get jobs, or even
to hang on to their old one, as the digitisation of economies races ahead.

 

Microsoft recently announced a plan to deliver skills and training to 25
million people globally this year.

 

It will offer training, skills, certifications and help finding jobs.

 

The firm will do this with the help of Microsoft-owned LinkedIn. However, Mr
Smith admitted that many jobs in many countries would be beyond the reach of
digital retraining.

 

"It's true that the nature of work varies widely around the world. Not all
jobs can be digitised, particularly in the developing world.

 

"We live in a world of internet inequality - if we don't do something about
it we are going to exacerbate all the other inequalities that we all worry
about. This is a task beyond any one company or any one government but if we
can reach 25 million people we will feel like we are doing our part."

 

Microsoft will donate $20m (£19.6m) in grants to non-profit organisations on
this programme on top of free use of their services, which will strike many
as fairly small given this is a company whose value has increased by $500bn
in the past year.

 

If big US tech looked powerful before Covid-19, it looks imperious now. Just
five companies make up 20% of the value of the S&P 500 index. Does he
understand why many feel big tech is too powerful and needs reining in?

 

"Tech is a powerful tool but it can also be a formidable weapon in the wrong
hands," he says. "So this is a critical time for technology, it has more
responsibility than ever."

 

"I think people have more questions than ever and that's not a bad thing. To
ensure that technology is a force for good, governments need to move more
quickly to develop technology-focused laws. While tech companies need to
exert some self-restraint."

 

'Almost nothing can be solved without us'

Getting global agreement on how to regulate and tax technology has proved
notoriously difficult and many countries are nervous as the increasing
digitisation of their economies makes it harder to generate the tax revenue
they will need to pay for the trillions of dollars of damage Covid-19 has
done.

 

Advances in technology will also lead to an increase in automation and AI
which may only hasten mass unemployment. What responsibility does Mr Smith
feel that tech companies have to pay for the changes to employment that they
are ushering in?

 

"I think the good news is that governments have all the tools they need to
make sure that tech companies remain responsive and responsible under the
rule of law," he says.

 

"Fundamentally the responsibility of companies and countries is to make sure
that people have the skills to ensure they reap the benefits rather than
suffer from the consequences of the changes unleashed.

 

"I think we all need to recognise that tech cannot solve everything, but
almost nothing can be solved without us. We need to be at the table."--BBC

 

 

 

Revamped South African Airways could be run independently, says Gordhan

JOHANNESBURG (Reuters) - South Africa is considering an independent board
for its ailing national airline, with a shareholder structure similar to
that of part state-owned telecoms firm Telkom, a senior government minister
told the local eNCA news channel on Sunday.

 

Debt-ridden South African Airways (SAA) has been in a form of bankruptcy
protection since December. Its creditors approved a rescue plan last week
that involves scaling down its fleet, shedding thousands of jobs and a
commitment of over 10 billion rand ($599.6 million) from the government

 

“Telkom is an interesting model that we could actually look at as we go
forward,” Public Enterprises Minister Pravin Gordhan said, adding that the
new SAA cannot be run by a “bunch of amateurs”.

 

He did not specify if the revamped airline will be a listed entity.

 

Telkom SA, among the top three telecom service providers in Africa’s most
industrialised country, is run independently and not bound by government
guidelines set up for most South African sate-owned enterprises.

 

The government directly holds a 37% stake in the listed entity and
state-owned fund manager Public Investment Corp. owns around 15%. The rest
is owned by institutional investors and the public.

 

Gordhan said the government was still trying to secure the 10 billion rand
required for the business rescue plan to succeed. “Now where it comes from,
what form it comes in is something is still being worked on.”

 

The public and finance ministries committed to finding the funds in a letter
to the airline’s administrators seen by Reuters last Thursday. This is in
addition to more than 16 billion rand the finance ministry set aside in its
February budget to repay SAA’s guaranteed debt and debt-service costs.

 

He reiterated that the restructured airline will have a strategic partner,
professional aviation managers and a more simplified salary structure.

 

($1 = 16.6788 rand)

 

 

 

Zambia's state investment arm be operator of mines in future, says govt

LUSAKA (Reuters) - Zambia’s state-owned investment arm will run mines as an
operator rather than a minority investor in future investments, a executive
said on Sunday, as the government seeks a more active role in mining assets
it holds.

 

ZCCM-Investment Holding (ZCCM-IH), controlled by Industrial Development
Corporation (IDC), is a mining investment arm of Africa’s second largest
copper producer.

 

“What we have asked ZCCM-IH to do is too seek its own mines, do explorations
and develop mining operations,” Mateyo Kaluba, chief executive of IDC, said
in a statement.

 

ZCCM-IH should have a higher stakes in mining ventures of the future, Kaluba
said.

 

Mining, which contributes more than 10% to Zambia’s economy, is also the
nation’s largest foreign exchange earner.

 

ZCCM-IH has minority shares in mines including First Quantum Mines’s
Kansanshi Mine and Glencore’s Mopani Copper Mines with highest stake in
Konkola Copper Mines (KCM) where it has 20.6% and Vedanta Resources 79.4%

 

“We are not averse to them getting into partnerships but those partnership
must be balanced. Most of the partnerships that ZCCM-IH has right now are
not balanced because the stakes are very small minorities,” Kaluba said.

 

Lately, ZCCM-IH has ramped up its exploration efforts and have commissioned
new mines in gold and manganese.

 

“We are confident that we’ll see it taking stronger positions in copper
mining and many other minerals in the country,” Kaluba said.

 

It has already done so in gold and manganese mines.

 

Kaluba was on a tour of a new manganese mine - Kabundi Resources - owned by
ZCCM-IH in central Zambia.

 

Kabundi Resources, which has started its first phase of mining, aims to
reach an output of 240,000 tonnes of manganese ore annually once commercial
production is achieved.

 

 

 

Algeria sees state carrier's losses from coronavirus at $272 mln this year

ALGIERS (Reuters) - Algeria, already under financial pressure after a fall
in energy earnings, expects state carrier Air Algerie’s losses from the
coronavirus pandemic to reach 35 billion dinars ($272 million) this year,
the government said on Saturday.

 

It said all other sectors have suffered losses due to movement restrictions
and lockdowns aimed at limiting the spread of the novel coronavirus.

 

Air Algerie suspended both external and domestic operations in March before
operating some emergency flights mainly from Europe, Turkey and Gulf
countries.

 

That suspension caused losses estimated at 16.31 billion dinars by April, a
figure that may climb to 35 billion by the end of the year, Finance Minister
Ayman Benabderrahmane told a meeting with businessmen and unions.

 

President Abdelmadjid Tebboune has said air, sea and land borders would
remain closed until the end of the health crisis.

 

The meeting, chaired by Prime Minister Abdelaziz Djerad, was intended to set
up a commission with the aim of evaluating overall economic losses from
restrictions linked to the virus.

 

“The state has taken preventive measures to cope with the health crisis.
These measures have seriously affected the national economy,” Djerad told
the meeting.

 

He cited energy, construction, public works and transport as the main
sectors that have suffered since the government started imposing
restrictions in mid-March.

 

OPEC member and gas-exporting Algeria has already announced public spending
cuts and delayed planned investment projects for this year in sectors
including energy to ease the impact of lower oil prices.

 

“Algeria is facing an unprecedented economic situation,” Djerad said.

 

 

 

Nigerian banks to limit debit card spending abroad to ease FX risk

ABUJA (Reuters) - Nigerian banks plan to reduce the amount customers can
spend abroad using debit cards on Monday, two lenders said, as banks try to
limit foreign currency settlement risk.

 

The country is facing dollar shortages because of the sharp fall in the
price of oil, Nigeria’s main export, and domestic banks are trying to avoid
transactions with hard currency.

 

Stanbic IBTC Bank, the local unit of South Africa’s Standard Bank, said it
will halve the spending limit for offshore card transactions to $500 per
month from Monday and will limit cash withdrawals to $100.

 

Another top tier lender Zenith Bank said it will temporarily suspend the use
of debit cards abroad for cash withdrawals and cut the monthly spending
limit abroad by more than half to $200.

 

“This review is in response to today’s economic realities,” Zenith said in a
notice, advising clients to request prepaid dollar cards.

 

Other lenders — Ecobank and Fidelity Bank — have also lowered withdrawal
limits for individuals while abroad.

 

Such moves have previously been at the behest of the central bank, but it
was not clear if the regulator was behind the latest action. The central
bank did not respond to a request for comment.

 

The bank is battling to conserve dollar reserves that are down 19% from a
year ago. Last week it depreciated the currency on the official market
prompting the naira to weaken on the black and over-the-counter spot
markets.

 

Bankers told Reuters that it now takes more than six months to settle
foreign lines of credit.

 

Nigeria is yet to resume forex sales to retail currency traders after it
banned international travel as part of a lockdown measure to slow the spread
of the coronavirus that has killed 778 people and infected more than 36,000.

 

 

 

Egypt aims to import 600,000-700,000 tonnes of sugar in FY 20-21 - official

CAIRO (Reuters) - Egypt will aim to import 600,000-700,000 tonnes of sugar
in the 2020-2021 financial year which began on July 1, an agriculture
ministry official said on Sunday.

 

During the last season, Egypt planted 340,000 feddans of sugar cane and more
than 600,000 feddans of sugar beet, Mostafa Abdel Gawad, the head of the
ministry’s sugar crops council added.

 

 

 

Total signs $14.9 bln debt financing for huge Mozambique LNG project

PARIS (Reuters) - French oil major Total has signed a $14.9 billion senior
debt financing agreement for its massive liquefied natural gas (LNG) project
in Mozambique, the biggest project financing ever in Africa, it said on
Friday.

 

The project includes the development of the Golfinho and Atum natural gas
fields in the Offshore Area 1 concession, and the construction of a
two-train liquefaction plant with a capacity of 13.1 million tons per annum,
Total said.

 

Jean-Pierre Sbraire, chief financial officer of Total, said the signing,
which secures the majority of the project’s total investment of $20 billion,
shows financial institutions have confidence in the long-term future of LNG
in Mozambique.

 

Mozambique LNG is one of several projects being developed in the country’s
northernmost province of Cabo Delgado after one of the biggest gas finds in
a decade off its coast. Together, the projects are worth some $60 billion.

 

Rival Exxon Mobil delayed the final investment decision on its nearby Rovuma
LNG gas project due to the coronavirus pandemic, and Mozambique expects the
decision next year.

 

Mozambique LNG’s project financing includes direct and covered loans from
eight export credit agencies (ECAs), 19 commercial bank facilities, and a
loan from the African Development Bank, Total said in a statement.

 

UK Export Finance (UKEF) was among the ECAs contributing to the financing,
alongside the Export Import Bank of the United States, Italy’s SACE, the
Netherlands’ Atradius, the Export Credit Insurance Corporation of South
Africa, Japan Bank for International Cooperation, Nippon Export and
Investment Insurance, and the Export-Import Bank of Thailand.

 

Reuters reported last month that UKEF was planning to commit around $800
million of funding - a contribution that drew criticism from environmental
campaigners who say Britain should not be funding fossil fuel projects.

 

Sealing the Total project financing is a win for Mozambique’s government as
it tackles security challenges.

 

Cabo Delgado has seen an Islamist insurgency with links to Islamic State
gather pace over the past year, and suspected Islamist insurgents attacked a
town 60 km (37 miles) south of the gas projects late last month.

 

 

 

POLL: S.Africa's Reserve Bank to cut rates again, by modest 25 bps

JOHANNESBURG (Reuters) - South Africa’s Reserve Bank is expected next week
to cut its repo rate for the fifth time this year, most likely by 25 basis
points to an all-time low of 3.5% as the COVID-19 pandemic batters the
economy, a Reuters poll found.

 

The SARB cut rates in May by 50 basis points after the economy was shut down
to limit the spread of the novel coronavirus. That followed two aggressive
100 basis point cuts in succession in March and April.

 

But the decision at the July 23 meeting is in the balance. The July 9-16
poll found 13 of 28 economists expected a 25 basis point cut and two
expected 50 basis points to 3.25%. Thirteen said the Bank would leave rates
unchanged.

 

“Given growth risks, the SARB will be willing to ease further, perhaps even
accommodating a negative real repo rate temporarily in 2021,” Razia Khan,
head of research for Africa and the Middle East at Standard Chartered, said.

 

“Although the SARB introduced secondary-market bond purchases in March, this
was in response to significant market dislocations. Monetary accommodation
is likely to happen through more conventional rate cuts,” Khan added.

 

The local bond yield curve had steepened in recent months as investors
fretted over the long-term sustainability of gross debt.

 

Median forecasts from the poll suggest rates are expected to be left at 3.5%
for the remaining September and November meetings this year. The SARB may
then raise the repo rate to 3.75% next year.

 

Still, annual inflation in South Africa has moderated sharply to 2.1% and is
expected to average 3.4% this year before quickening to 4.1% next year. That
is still within the Reserve Bank’s comfort level of 3-6%.

 

South Africa’s economy in the last quarter is expected to contract 38.7%,
the poll found. That would be the most since comparable records began in
1993, the year before South Africa held its first fully democratic
elections.

 

It would follow a 2.0% contraction reported for the first quarter of the
year, before Africa’s second-largest economy largely shut down in March.

 

The economy is forecast to partially bounce back by an annualised 19.3% in
the three months to September and grow in all of the following quarters.
That would likely mean 3.5% growth next year following an 8.0% contraction
this year.

 

 

 

Nigeria inflation rises in June, food and healthcare cost weigh

LAGOS (Reuters) - Annual inflation in Nigeria rose for a 10th straight month
in June, lifted by food and healthcare costs, the statistics office said on
Friday, after the coronavirus pandemic disrupted logistics and the central
bank weakened the currency.

 

Inflation climbed to 12.56%, its highest level in more than two years, from
12.4% in May, the National Bureau of Statistics said.

 

The central bank is due to meet on Monday to set interest rates after it
last week depreciated the naira by 5.5% against the dollar on the official
market, its second adjustment in six months.

 

Rising inflation has caused yields on Treasury bills and bonds to turn
negative, a major stumbling block for the central bank’s push to attract
foreign inflows to support the naira and boost the economy.

 

The statistics office said prices of medical services, pharmaceutical
products, transport and associated services, rose the most on the non-food
index.

 

A separate index for food, which accounts for the bulk of the inflation
basket, showed a price increase of 15.18% from 15.04% in May. Food inflation
has been in double digits for more than three years.

 

The rise in the food index was caused by increases in bread and cereals,
potatoes, yam and meat, fish and vegetables.

 

Africa’s top oil exporter faces economic hardship from the coronavirus
outbreak and sharp falls in crude prices, which have caused a steep decline
in growth.

 

The government expects the economy to contract by as much as 8.9% this year.

 

Nigeria has more than 34,000 confirmed cases of coronavirus and 76 deaths.
Most cases are in urban areas, where the brunt of price increases is felt,
especially for imported drugs and food.

 

 

 

Zambia rejects Glencore copper mine's suspension plan

LUSAKA (Reuters) - Glencore’s Zambia subsidiary Mopani Copper Mines on
Thursday said the country’s mines ministry rejected its proposal to suspend
operations because of low copper prices and disruptions caused by the
coronavirus crisis.

 

Mopani said it would appeal against the decision and will continue mining
operations pending the outcome of the appeal process.

 

Operations were halted at its mines at the start of April, with Mopani
citing the COVID-19 pandemic and other problems, but mining resumed a month
later after the decision sparked a backlash from the Zambian government.

 

“Mopani remains of the belief that the only way to protect the company’s
value and preserve the option to deliver its growth projects when conditions
further improve is to transition the operations to C&M (care and
maintenance),” it said on Thursday.

 

Zambia’s mines minister, Richard Musukwa, said the government had made it
clear from the beginning that it wants Mopani to continue and said he was
happy Mopani had “responded favourably” to his call not to place the mine
under care and maintenance.

 

Musukwa said that Mopani has cut the number of expatriates working at the
mine from 94 to 49 and the company will address concerns over what he
described as its high cost of production.

 

“We are open to dialogue because we want what’s best for the people of
Zambia and Mopani is strategic to [our] economic trajectory,” he said.

 

Mopani Copper Mines, which produced 119,000 tonnes of copper in 2018, is
73.1% owned by Glencore, 16.9% by First Quantum Minerals and 10% by Zambia’s
mining investment arm ZCCM-IH.

 

 

 

 

 

 


 

 


 

INVESTORS DIARY 2020

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


Masimba

AGM

Virtual

21 July 2020 | 12pm

 


Proplastics

AGM

Virtual

23 July 2020 | 10am

 


NMB

AGM

Virtual

28 July 2020 | 10am

 


FMP

AGM

Ground Floor, First Mutual Park, 100 Borrowdale Road, Borrowdale

29 July 2020 | 9:30am

 


FML

AGM

Ground Floor, First Mutual Park, 100 Borrowdale Road, Borrowdale

29 July 2020 | 11:30am

 


ZBFH

AGM

Board Room, 21 Natal Road, Avondale

30 July 2020 | 10:30am

 


OK Zimbabwe

AGM

Virtual

30 July 2020 | 3pm

 


ZHL

AGM

virtual

31 July 2020 |

 


Delta

AGM

Virtual, Head Office, Northridge Close, Borrowdale

31 July 2020 | 12:30pm

 


Zimbabwe

National Heroes Day

Zimbabwe

10  August 2020

 


Zimbabwe

Defence Forces’ Day

Zimbabwe

11  August 2020

 


CBZ

AGM

Virtual

14  August 2020 | 6pm

 


 

 

 

 

 


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.

 


 

 


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