Major International Business Headlines Brief::: 24 July 2020

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Major International Business Headlines Brief::: 24 July 2020

 


 

 


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ü  MTN Nigeria expects slight margin drop after FX rate shift

ü  Sudan 2020 budget will adjust currency, aim for float in 2 years
-government source

ü  All conditions for SAA rescue met apart from guarantee letter -
administrators

ü  Dyson cuts 900 jobs amid coronavirus impact

ü  Petra Diamonds full-year revenues drop 36%, COVID-19 weighs

ü  Apple and Nike urged to cut 'China Uighur ties'

ü  South Africa cuts rates further as COVID-19 strangles economy

ü  African Development Bank approves 5 bln rand loan to South Africa

ü  Nigeria stocks rise to 3-week high, Dangote Cement gains

ü  Ghana slashes 2020 growth forecast to 0.9%

ü  IMF board to consider South Africa financing aid on Monday-spokesman

ü  Sasol expects delay in last unit in U.S. project to come onstream

ü  Germany's Ritter Sport wins square chocolate battle against Milka

ü  Tech CEO hearing will probably be postponed, sources say

ü  Dow drops 350 points as tech shares slide, S&P 500 snaps 4-day win streak

 

 

 

 

 

 

 

 

 

 

 

 


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MTN Nigeria expects slight margin drop after FX rate shift

ABUJA (Reuters) - MTN Nigeria expects its profit margin to dip by almost
half a percentage point this year as its leased tower services feel the
impact of weaker currency exchange rates, it said on Thursday.

 

The dollar conversion rate used by the Nigerian unit of South African
telecoms group MTN weakened by 6.5% to 385 naira, it said, reflecting this
month’s currency adjustment by the central bank to unify the country’s
system of multiple exchange rates.

 

The change to reference rate, currently at 360-385 naira, will reduce the
EBITDA margin in 2020 by approximately 0.4 percentage points under IFRS16
financial reporting rules, MTN Nigeria said.

 

The company leases the majority of its tower and network equipment sites
from IHS Towers and said it has concluded a renegotiation of certain terms
of its rental agreements, MTN Nigeria said in a statement.

 

MTN Nigeria sold its tower infrastructure in 2014 to focus on its core
business.

 

The company said the slight drop in earnings will be offset over time by
improved pricing, increased focus on rural connectivity and operational
efficiencies.

 

Shares in MTN Nigeria rose 0.8% to 119 naira per share.

 

MTN Nigeria said the ongoing coronavirus pandemic has shown the importance
of digital infrastructure and that its agreement with IHS and other tower
firms will enable it enhance fibre networks and connect rural areas that are
currently underserved.

 

 

 

 

 <http://www.zb,co.zw/> Sudan 2020 budget will adjust currency, aim for
float in 2 years -government source

KHARTOUM (Reuters) - Sudan’s amended budget for 2020 includes a currency
adjustment programmme beginning in August that aims to reach a full currency
float in two years, a government source told Reuters on Wednesday.

 

The country’s currency recently fell to a record low of 150 Sudanese pounds
to the dollar on the black market, compared with 55 at the official rate.
The black market rate was 140 pounds to the dollar on Wednesday.

 

A little over a year after a popular uprising that put Sudan on a shaky path
towards democracy, its economy is at risk of freefall, hammered by an
inflation rate of more than 100% and frequent shortages of bread and
medicine.

 

The private sector will be allowed to import unlimited quantities of fuel to
address shortages, which will lead to a “rationalization” of its price,
Acting Finance Minister Hiba Mohamed Ali said, referring to a removal of
subsidies to help meet the reform demands of international donors.

 

The government source said the sector would be allowed to import fuel using
dollars at the free market price in August.

 

Fuel imports would be secured through a previously announced trade financing
fund, Ali said. The fund has a $1 billion portfolio to be used for imports,
Prime Minister Abdalla Hamdok said in a speech on Wednesday. Resolving the
country’s trade imbalance is a priority for the government, Hamdok said.

 

In an exception to the “rationalization” drive, subsidized fuel could still
be sold to productive sectors like agriculture.

 

The reforms come as part of an adjusted 2020 budget to be passed by Sudan’s
cabinet and sovereign council, acting in a parliamentary capacity, within
days, the government source said.

 

Ali said a budget adjustment was necessary to reduce the impact of the
coronavirus pandemic, which had cut public revenue by 40%.

 

Khartoum is in desperate need of international financial help to reorganise
its economy, and the government is printing money to subsidise bread, fuel
and electricity. The finance minister said the government would continue to
subsidize bread, medicine and cooking oil as part of the 2020 budget.

 

Foreign donor nations in June pledged $1.8 billion at a conference hosted by
Germany to help Sudan ease an economic crisis hampering its transition
towards democracy. Ali said that $484.7 million of that money has been set
aside for a cash transfer programme to support poor families.

 

 

 

 

All conditions for SAA rescue met apart from guarantee letter -
administrators

JOHANNESBURG (Reuters) - All conditions for a rescue plan for South African
Airways (SAA) have been met, apart from a “guarantee confirmation letter”
required by lenders from the government, the state-owned airline’s
administrators said on Thursday.

 

The administrators have called a creditor meeting for Friday to consider
amending the SAA restructuring plan to give the government until July 27 to
provide the guarantee confirmation letter, they said.

 

 

 

 

Dyson cuts 900 jobs amid coronavirus impact

Sir James Dyson is Britain's richest man, according to The Sunday Times Rich
List.

Dyson is cutting 600 jobs in the UK and a further 300 worldwide as the
coronavirus impact speeds up the company's restructuring plans.

 

The firm, best known for the invention of the bag-less vacuum cleaner, said
the pandemic was changing consumer habits as more people shopped online.

 

Dyson was founded by inventor Sir James Dyson, who in May topped the Sunday
Times Rich List.

 

The company has a global workforce of 14,000, with 4,000 in the UK.

 

Most of the jobs will be lost in retail and customer service roles.

 

Dyson uses its own people to sell in department stores, for example at John
Lewis, but the shift to online has cut necessity for a High Street presence.
The jobs being lost overseas, where the company operates in 80 countries,
involve similar roles.

 

Inventor Sir James Dyson tops UK Rich List

A Dyson spokesman said: "The Covid-19 crisis has accelerated changes in
consumer behaviour and therefore requires changes in how we engage with our
customers and how we sell our products."

 

He said the company would try to avoid compulsory redundancies where
possible, and emphasised that it had not furloughed any staff nor drawn on
any public money to support jobs anywhere in the world during the pandemic.

 

Most Dyson products are designed in the UK, where it has two technology
campuses in Wiltshire, but manufactured in Asia.

 

Electric cars

Earlier this year the company joined the fight to produce medical
ventilators for the NHS, amid fears it would be overwhelmed by coronavirus.

 

In March the government ordered 10,000 ventilators from the company,
although Sir James later told employees these were no longer needed.

 

The company also tried to diversify into making electric cars.

 

But last year, it said that although its engineers in the UK had developed a
"fantastic electric car", it would not hit the roads because it was not
"commercially viable".

 

Sir James, a Brexit-backing entrepreneur, launched his first vacuum cleaner
in 1993. He had previously, in 1974, invented a wheelbarrow which used a
spherical wheel.--BBC

 

 

 

Petra Diamonds full-year revenues drop 36%, COVID-19 weighs

JOHANNESBURG (Reuters) - Petra Diamonds shares fell on Thursday after it
reported selling 23% fewer diamond carats for 36% less revenue in the year
to June 30 as the COVID-19 pandemic dealt a fresh blow to a struggling
diamond industry.

 

Petra sold 2.9 million carats in its full-year 2020, down from 3.7 million
in the previous year, while revenues dropped to $295.8 million from $463.6
million.

 

The falls reflect already weaker diamond prices to February this year, which
were exacerbated when the pandemic disrupted sales cycles. Petra shares were
down 5.8% at 1.55p by 0758 GMT. The stock has fallen 81% this year,
Refinitiv data showed.

 

Petra cancelled May and June tenders because of travel restrictions and low
demand from the midstream. It plans to hold its next tender in September.

 

The African diamond miner is restructuring debt. It said discussions with
noteholders and South African lenders continued and it expects to announce
progress this quarter.

 

Production fell 7% year-on-year, partly because Petra’s Williamson mine in
Tanzania has been shut since the start of April. It remains suspended due to
the impact of low pricing on its liquidity, the company said.

 

South Africa’s coronavirus lockdown also caused Petra’s mines there to shut
for three weeks from March 26.

 

Petra said it is targeting a ramp-up to pre-COVID-19 production levels, and
will give production guidance for 2021 once it reaches a “sustainable level
of operational stability”.

 

Petra’s free cash flow fell to $53.6 million by June 30, from $64.2 million
on March 30, while net debt rose to $658 million from $601 million.

 

As South Africa’s COVID-19 epidemic worsens, Petra said 39 workers have been
confirmed coronavirus positive at its South African operations so far, and
one worker at the Cullinan mine has died of the respiratory disease.

 

 

 

Apple and Nike urged to cut 'China Uighur ties'

Corporate giants including Nike face growing calls to cut ties with
suppliers alleged to be using "forced labour" from China's Uighur people.

 

Activists have launched a campaign accusing firms of "bolstering and
benefiting" from exploitation of the Muslim minority group.

 

The US has also ramped up economic pressure, warning firms against doing
business in Xinjiang due to the abuses.

 

Nike and other brands have said they are tracking the issue.

 

Nike said it was "conducting ongoing diligence with our suppliers in China
to identify and assess potential risks related to employment of Uighur or
other ethnic minorities".

 

It said it does not source materials directly from Xinjiang, the region in
western China that is home to much of the country's Uighur population and
many of the factories said to use the labour.

 

Apple also said it had investigated the claims. "We have found no evidence
of any forced labour on Apple production lines and we plan to continue
monitoring," the firm said.

 

Who are the Uighurs?

China 'using birth control' to suppress Uighurs

Politicians and activists say companies need to do more if they do not want
to be complicit in the Chinese government's human rights abuses.

 

"Brands and retailers should have left long ago, but they haven't and that
is why this public call to action is important and necessary," said Chloe
Cranston of Anti-Slavery International, one of the more than 180
organisations involved in the pressure campaign.

 

"It's not just about ending a relationship with one supplier. It's really
about taking a comprehensive approach."

 

What is happening in Xinjiang?

Reports by the Australian Strategic Policy Institute (ASPI) and the US
Congress, among others, have found that thousands of Uighurs have been
transferred to work in factories across China, under conditions the ASPI
report said "strongly suggest forced labour". It linked those factories to
more than 80 high-profile brands, including Nike, Apple and Gap.

 

China, which is believed to have detained more than one million Uighurs in
internment camps in Xinjiang, has described its programmes - which
reportedly include forced sterilisation - as job training and education.

 

Officials say they are responding to risks of extremism and have dismissed
claims of concentration camps as "fake".

 

 

Omer Kanat, executive director of the Uyghur Human Rights Project, said
getting companies to shift business away from Xinjiang is critical to
convincing the Chinese government to change its policies.

 

"Until now, there have been condemnations of what the Chinese government has
been doing but there have not been any actions," he told the BBC. "The
Chinese government will not do anything unless there are some real impacts,
so therefore targeting the companies means a lot."

 

What are governments doing?

The call for action comes as the US has also ramped up economic pressure
over the issue.

 

This month, it sanctioned Chinese officials overseeing the region and warned
firms against doing business in Xinjiang.

 

American border officials also seized a shipment of 13 tonnes of hair
products from the region worth an estimated $800,000 (£628,000), while the
Commerce Department blacklisted 11 more companies - suppliers said to work
with firms such as Apple - a move that limits the ability of those firms to
buy US products, citing abuses.

 

Lawmakers in the US Congress are considering legislation to explicitly ban
imports from Xinjiang, while politicians in the US and in Europe have also
threatened legislation that would force companies to monitor the issue more
closely.

 

"Companies all over the world must reassess their operations and supply
chains and find alternatives that do not exploit the labour and violate the
human rights of the Uighur people," said US congressman James McGovern, who
leads a committee on China.

 

Mr Kanat said he believes an international movement is growing, pointing to
recent comments by UK Foreign Secretary Dominic Raab, who accused China of
"gross and egregious" human rights abuses and said sanctions could not be
ruled out.

 

"This is encouraging," he said. "It is the first step."

 

What do the companies say?

The activist campaign is focused on clothing brands because Xinjiang
produces the majority of China's cotton, which accounts for about 20% of the
world's supply.

 

Apparel companies said they were taking the issue seriously.

 

Nike said after it confronted one of its suppliers, Taekwang Group, about
the issue, the firm stopped recruiting employees from Xinjiang at one of its
factories. The sportswear company said that Taekwang said those workers "had
the ability to end or extend contracts their contracts at any time".

 

"This remains an issue of critical importance," the firm said. "We are
continuing to draw on expert guidance and are working with brands and other
stakeholders to consider all available approaches to responsibly address
this situation."

 

Gap also said it has policies that bar involuntary labour in its supply
chain and does not source clothing directly from Xinjiang.

 

"We also recognize that a significant amount of the world's cotton supply is
grown and spun there," it added. "Therefore, we are taking steps to better
understand how our global supply chain may be indirectly impacted."

 

UK accuses China of 'gross' abuses against Uighurs

'Forced labour' Chinese hair imports seized by US

Other companies disputed the claims that their supply chains were tainted.

 

Adidas said it had never sourced products from Xinjiang and the company
cited in the ASPI report had falsely claimed to be a supplier.

 

"The adidas workplace standards strictly prohibit all forms of forced and
prison labour and are applicable to all companies across our supply chain,"
it added. "The use of forced labour by any of our partners will result in
the termination of the partnership."

 

Apple said it had not found any issues, despite conducting several surprise
audits of its long-time supplier O-Film - one of the firms cited by the US
Commerce Department.

 

Some of the Chinese companies accused of using forced labour from Uighur
workers have also disputed the claims.

 

"We absolutely have not, do not, and will never use forced labour anywhere
in our company," said the Esquel Group, a Hong Kong based shirt-maker,
reportedly a manufacturer for brand such as Lacoste.

 

It added that it was "deeply offended" by the US decision to add it to its
export blacklist this week.

 

"We are working with all relevant authorities to resolve the situation, and
we remain committed to Xinjiang as we are proud of our contribution in the
region over the last 25 years."--BBC

 

 

 

South Africa cuts rates further as COVID-19 strangles economy

JOHANNESBURG (Reuters) - A divided South African central bank cut interest
rates for a fifth time this year on Thursday, trimming them to a record low
as it looks to support an economy strangled by the coronavirus pandemic.

 

 

Three members of the generally conservative bank’s five-member monetary
policy committee favoured a 25 basis point (bps) cut while two voted for no
change, a split also reflected in analysts’ forecasts.

 

The cut brought the main lending rates to 3.50% and followed a previous 275
bps of cuts this year to try to cushion the impact of COVID-19 on consumers
and firms.

 

The bank also cut its 2020 forecast for gross domestic product, to a
contraction of 7.3% from the 7% predicted in May.

 

Beset by chronically high unemployment and several years of low growth,
South Africa’s economy has been further enfeebled by the continent’s worst
coronavirus outbreak, in which almost 400,000 people have been infected and
close to 6,000 died.

 

Consumer inflation is seen remaining near the lower end of the central
bank’s 3% to 6% target range, and there have been growing calls from labour
unions for policymakers to ease policy more aggressively.

 

However, the bank noted in its policy statement, read out by Kganyago, that
upside risks to inflation could emerge “from heightened fiscal risks and
sharp reductions in the supply of goods and services”, and that future rate
decisions would be data-dependent.

 

The easing of South Africa’s lockdown “has supported growth in recent weeks
and high frequency activity indicators show a pickup in spending from
extremely low levels,” he added.

 

The bank forecast average consumer price growth of 3.4% this year and 4.3%
next, and said it expected GDP to expand 3.7% in 2021.

 

The rate cut decision boosted the rand and government bonds.

 

Chief Africa economist at Standard Chartered, Razia Khan, said the bank’s
statement was hawkish, but it was unclear whether the bank had reached the
end of its easing cycle.

 

“A lot of monetary accommodation has been provided, but the impact of that
is difficult to gauge, given the lockdown. In our view, this leaves open the
likelihood of further easing, should inflation remain benign and growth
weak,” she said.

 

 

 

 

African Development Bank approves 5 bln rand loan to South Africa

JOHANNESBURG (Reuters) - The African Development Bank (AfDB) has approved a
roughly 5 billion rand ($300 million) loan to the South African government
to help it fight the COVID-19 pandemic and support its budget, the bank said
on Wednesday.

 

Africa’s most industrialised economy was in recession even before COVID-19
started ravaging its economy. Forecasts are now for gross domestic product
to shrink by at least 7% this year, and a budget deficit of around 15% of
GDP.

 

The country has recorded the most coronavirus infections in Africa, with
more than 380,000 cases.

 

The AfDB said in a statement that the loan was to protect lives and promote
access to essential medical equipment, to protect livelihoods by preserving
jobs, and to support companies in the formal and informal economy.

 

“South Africa’s ability to respond to the pandemic has implications for
neighbouring countries as well as the continent as a whole,” the bank said.

 

South Africa has also approached the International Monetary Fund for
financial support in its fight against the coronavirus. The IMF is expected
to consider its request next week.

 

The development bank of the BRICS group of nations approved a $1 billion
COVID-19 loan for South Africa earlier this year.

 

($1 = 16.4914 rand)

 

 

 

 

Nigeria stocks rise to 3-week high, Dangote Cement gains

ABUJA (Reuters) - Nigerian stocks climbed to a three-week high on Thursday
lifted by gains in its biggest listed firm Dangote Cement, which announced a
share buyback this year.

 

The main share index bucked four straight days of losses to rise 1.4% to
24,512 points on Thursday.

 

Dangote Cement, majority owned by Africa’s richest man Aliko Dangote, rose
by 10% - the maximum allowed on the bourse. MTN Nigeria, the second-biggest
listed firm climbed 0.84%.

 

One fund manager said there was buying interest in Dangote Cement because
the stock was recovering from a six-week low.

 

He added that gains across the market were few because investors were
waiting for half-year results to determine the extent of the damage
inflicted by the novel coronavirus pandemic on businesses.

 

MTN Nigeria, the local unit of South Africa’s telecoms group MTN, on
Thursday said it expects its profit margin to fall by almost half a
percentage point this year.

 

A total of 11 firms advanced while 11 declined and more than 100 others
recorded no trades.

 

 

 

Ghana slashes 2020 growth forecast to 0.9%

ACCRA (Reuters) - Ghana’s economy will grow at its slowest rate in nearly 40
years in 2020 as it reels from the fallout of the coronavirus pandemic, the
finance minister said on Thursday, announcing a $17.4 billion support
programme.

 

Speaking at a mid-year budget review, minister Ken Ofori-Atta said gross
domestic product would grow just 0.9% this year versus an earlier forecast
of 6.8%.

 

“Ghana has been hit with a double shock: a health pandemic and a global
economic recession,” he told parliament, projecting a new fiscal deficit of
11.4% due to a deep revenue shortfall and unanticipated extra spending.

 

The government will roll out a programme worth 100 billion Ghanaian cedi
($17.39 billion) to help Ghana’s economic recovery, with 70% coming from the
private sector, he said.

 

($1 = 5.7500 Ghanian cedi)

 

 

 

IMF board to consider South Africa financing aid on Monday-spokesman

WASHINGTON (Reuters) - The International Monetary Fund confirmed on Thursday
that South Africa has requested emergency financing assistance and its
executive board will consider the request on Monday, which would bring to 72
the number of countries receiving IMF aid to deal with the coronavirus
pandemic.

 

“They’ve requested this assistance to help them address urgent balance of
payments needs arising from this external shock that the pandemic has given
to so many countries,” IMF spokesman Gerry Rice told a regular news
briefing. “As always, our board will make the decision on the approval and
on the amount.”

 

 

 

 

Sasol expects delay in last unit in U.S. project to come onstream

JOHANNESBURG (Reuters) - South Africa’s Sasol said on Thursday a unit
damaged by fire at its Lake Charles Chemical Project (LCCP) should reach
meaningful output by October, a month later than previous guidance.

 

Even before a fire earlier this year, the Louisiana plant, which converts
natural gas into plastics ingredient ethylene, had been hit by delays and
cost overruns that led to the company’s joint CEOs stepping down last
October.

 

On Thursday, the world’s top producer of motor fuel from coal said work at
the last unit to be repaired from fire damage had experienced “some
challenges” and meaningful output was delayed from previous guidance of
September.

 

Six downstream chemical units at the 1.5 million ton per year ethane cracker
feed into each other, and can only produce commercially viable output once a
meaningful level of production is achieved.

 

Sasol, which is in talks for a potential partner at its U.S. Base Chemicals
assets, said project expenditure is currently $12.7 billion.

 

Shares in Sasol fell 2.43% to 138.55 rand by 0730 GMT as dampened global
fuel demand, concerns about the LCCP project and lower than expect output
weighed.

 

“They are just reminding the market that they have some execution risk with
Lake Charles,” Cratos Capital equities trader Greg Davies said.

 

Also on Thursday, Sasol gave its sales and production update for the year to
June.

 

Saleable production from its mining business was flat at 36.1 million tonnes
versus a year earlier.

 

Sales of liquid fuels and natural gas fell by 12% and 8% respectively
following lower demand because of lockdown restrictions.

 

Total sales volumes at its performance chemicals business rose 8% compared
to the prior year.

 

Sasol said the novel coronavirus had also impacted production at its organic
chemicals operations in Terranova, Italy, and its Nanjing surfactant
producing plant in China. Both were both temporarily shut during the third
quarter.

 

Sasol has recorded 774 coronavirus infections, most of which have been in
South Africa where two employees have died.

 

 

 

 

Germany's Ritter Sport wins square chocolate battle against Milka

For decades, Ritter Sport has marketed its chocolate bars on their unique,
square shape.

 

So when rival brand Milka challenged its German monopoly on square
chocolate, the battle lines were drawn.

 

Milka achieved an initial victory in 2016 by getting the trademark deleted
but that ruling was overturned.

 

Finally, the case ended up in the Federal Court of Justice, where judges
have now thrown out Milka's complaint and ruled in favour of Ritter Sport.

 

First, the history

The square bar dates back to 1932, when Clara Ritter came up with the idea,
according to company legend. "Let's make a chocolate bar that fits in
everyone's jacket pocket without breaking and weighs the same as a normal
long bar," she is supposed to have said (although in German).

 

By 1970 it had come up with the slogan "Quadratisch, praktisch, gut" -
quality, chocolate, squared, as the company likes to translate it.

 

The family company registered the shape with the German patent and trademark
office in 1993, so when Milka began marketing a square bar in 2010, the case
went to court.

 

Milka, now owned by Mondelez, won round one in the federal patent court but
that ruling was later thrown out and the patent court decided the following
year that Ritter could keep its three-dimensional monopoly.

 

Milka's final challenge in the Federal Court of Justice has now also failed.

 

Normally a brand cannot claim protection in Germany if its shape gives the
product "an essential value". But the judges in this case said Ritter Sport
was different.

 

Consumers considered the square nature of the chocolate bar as an indication
of both where the chocolate came from and its quality, they concluded.

 

They said there was no artistic value to the shape and it did not lead to
differences in price.

 

Their ruling means that the incumbent bar can remain the only top-brand
square chocolate bar on the shelves in German shops.--BBC

 

 

 

Tech CEO hearing will probably be postponed, sources say

The blockbuster antitrust hearing featuring CEOs from Amazon, Apple,
Facebook and Google, which was supposed to happen Monday, looks like it will
be postponed, two people familiar with the matter told CNBC.

 

The blockbuster antitrust hearing featuring CEOs from Amazon, Apple,
Facebook and Google scheduled for Monday will likely be postponed, two
people familiar with the matter told CNBC, due to a conflict with the
memorial service for the late Rep. John Lewis, D-Ga.

 

The House Judiciary Committee and the Antitrust Subcommittee, which is set
to host the hearing, have not yet confirmed the move and spokespeople did
not immediately comment.

 

The hearing, which was set to feature Amazon CEO Jeff Bezos, Apple CEO Tim
Cook, Facebook CEO Mark Zuckerberg and Google CEO Sundar Pichai, is meant to
be the culmination of a more than year-long investigation into the four tech
giants. Following the hearing, lawmakers plan to issue a report based on
their findings throughout the investigation and propose legislation that
would aim to bring antitrust laws up to date to be responsive to issues
unique to digital marketplaces.

 

The project has been delayed already by the public health crisis that’s
interrupted Congress’ normal course of business. Subcommittee Chairman David
Cicilline, D-R.I., said in January he expected the report to be completed by
early April, but that timeline has since been shifted at least several
months.

 

It’s not yet clear when the hearing will be rescheduled.

 

A special ceremony is scheduled in honor of Lewis on Monday at 2 p.m. ET at
the U.S. Capitol Rotunda. After, he will lie in state at the Capitol. The
antitrust hearing had been scheduled to begin at noon.--cnbc

 

 

 

Dow drops 350 points as tech shares slide, S&P 500 snaps 4-day win streak

Stocks fell in volatile trading on Thursday as Microsoft and Apple led the
broader market lower and traders pored through disappointing unemployment
data. 

 

The Dow Jones Industrial Average dropped 353.51 points, or 1.3%, to
26,652.33. The S&P 500 slid 1.2%, or 40.36 points, to 3,235.66, snapping a
four-day winning streak. The Nasdaq Composite fell 2.2%, or 244.71 points,
to 10,461.42 as the sell-off in major technology companies deepened. 

 

Microsoft shares slipped 4.3% despite reporting better-than-expected
earnings for the previous quarter. Though the company’s results were largely
positive, Microsoft said its transactional license purchasing continued to
slow and that subsidiary LinkedIn was negatively impacted by the weak job
market.

 

Apple traded 4.5% lower, while Amazon and Netflix dropped 3.6% and 2.5%,
respectively. Tesla, meanwhile, gave back its earlier gains and fell nearly
5% despite reporting earnings that blew past analyst expectations. Elon
Musk’s automaker also said it’s set “for a successful second half” and
reiterated its goal of delivering 500,000 vehicles this year.

 

 

 

The S&P 500 “is getting hit very hard as investors sell out of tech, a group
that came into the CQ2 reporting season with impossibly high expectations,”
Adam Crisafulli of Vital Knowledge, said in a note on Thursday. “Tech stocks
were simply wildly overbought, overowned, and overvalued, and there probably
wasn’t anything they could have done differently with earnings to spur
further gains.”

 

Christopher Harvey, senior analyst at Wells Fargo Securities, noted these
“uber-cap” tech stocks have led the sharp gains off the 2020 lows, adding:
“We are seeing growing similarities to the late 1990s.”

 

“Overall, our intermediate-term worry is that a melt-up may destabilize the
marketplace and easy come, easy go – i.e., as stocks aggressively discount
easy 1H21 comps but do not factor in political risks,” Harvey said in a
note. 

 

The latest unemployment figures also dented market sentiment.

 

 

Chart of initial claims for unemployment insurance with data through July
18, 2020.

U.S. weekly jobless claims came in at 1.416 million for last week, marking
the 18th straight week in which initial claims totaled more than 1 million.
Economists expected another 1.3 million workers to have filed initial claims
for state unemployment benefits, according to Dow Jones.

 

“The surge of COVID cases in the Sun Belt and the stalling out of reopening
activities in other states has seemingly caused another round of layoffs
that has stymied the nascent labor market recovery,” said Thomas Simons,
money market economist at Jefferies, in a note.

 

This stalling in the labor market comes as lawmakers work on an additional
stimulus package for those impacted by the coronavirus pandemic. 

 

On Wednesday, sources told CNBC that Republicans were considering extending
a $600-per-week unemployment benefit at a reduced rate of $100 per week. On
Thursday, Treasury Secretary Steven Mnuchin said an extension in
unemployment benefits will be based on “approximately 70% wage replacement.”

 

Thursday’s losses led to investors seeking protection in options and
Treasurys. The Cboe Volatility Index (VIX) — seen by Wall Street as the
market’s best “fear gauge” — topped 26. The benchmark 10-year Treasury fell
to 0.57%.--cnbc

 

 

 

 

 

 

 

 

 

 

 

 


 


 


 

 


 

INVESTORS DIARY 2020

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


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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