Major International Business Headlines Brief::: 17 June 2020

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Major International Business Headlines Brief::: 17 June 2020

 


 

 


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ü  Angola to export 38 oil cargoes in August, up 1 from July-sources

ü  Ivory Coast requests debt holiday from creditors including Paris Club

ü  South Africa's Telkom flags 70% fall in annual earnings

ü  IMF cuts Senegal's 2020 GDP forecast to 1.1%

ü  South African insurer Discovery warns of up to 90% profit plunge

ü  EU imposes tariffs on Chinese makers of glass fibre fabric in China and
Egypt

ü  Credit from Safaricom's farming app sows seeds of change in Kenya

ü  US-China trade war takes toll on their global competitiveness

ü  US retail sales in record monthly rebound

ü  Apple faces two EU anti-competition probes

ü  Job cuts warning as 600,000 roles go in lockdown

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


Angola to export 38 oil cargoes in August, up 1 from July-sources

LONDON (Reuters) - Angola is set to export 38 crude oil cargoes in August,
up one from the July schedule, two trade sources said on Tuesday citing a
preliminary loading programme.

 

The loadings suggest the country is largely sticking to its commitments
under an OPEC-led supply cut.

 

Based on 38 cargoes, August’s daily export rate is as much as 1.23 million
barrels per day. Angola’s quota for August is 1.25 million bpd under the
OPEC+ deal.

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

Ivory Coast requests debt holiday from creditors including Paris Club

ABIDJAN (Reuters) - Ivory Coast has asked to join an initiative that would
let it suspend its debt payments until the end of the year in order to spend
more on health services and tackling the fallout of the coronavirus
pandemic.

 

The amount of debt service eligible for suspension is 119 billion CFA
($205.45 million), according to a letter sent by the government to its main
state creditors dated June 15.

 

The request is under the Group of 20 major economies’ Debt Service
Suspension Initiative (DSSI) to help 77 low-income countries, backed by the
Paris Club of sovereign lenders.

 

“Ivory Coast has decided to request participation in the DSSI initiative
and, as such, has sent official requests to its main creditors in the
official bilateral sector, as well as to the Paris Club,” the government
said.

 

It explicitly ruled out requesting any debt holiday from private lenders -
something that the Paris Club has previously asked debtor countries to do.

 

A number of the low-income countries had expressed concerns that to do so
could hurt their credit ratings after ratings agencies said a failure to pay
private creditors who had agreed to suspend debt payments in parallel with
the Club could be considered a default.

 

“Ivory Coast ... hereby reaffirms its capacity and commitment to honour all
of its contractual obligations vis-à-vis its private creditors in the
servicing of its external public debt,” the statement added.

 

It said macroeconomic fundamentals in the world’s top cocoa producer
remained excellent, with an economic growth projection of 3.6% in 2020, and
a national debt equivalent to 38.6% of gross domestic product (GDP) at the
end of 2019.

 

The International Monetary Fund expects Ivory Coast’s economy to grow 8.7%
in 2021, the highest projected rate on the entire continent, the government
said. ($1 = 579.2200 CFA francs)

 

 

 

South Africa's Telkom flags 70% fall in annual earnings

JOHANNESBURG (Reuters) - South African telecoms firm Telkom said on Monday
its earnings in the year to March may have fallen by as much as 70% due to
one-off costs relating to job cuts and the impact of the coronavirus
pandemic.

 

People practice social distancing as they queue outside a Telkom branch
during the coronavirus disease (COVID-19) outbreak in Johannesburg, South
Africa, June 2, 2020. REUTERS/Marius Bosch

Telkom said it expects headline earnings per share (HEPS), the main profit
measure in South Africa, to have tumbled by between 65% and 70% for the full
year ended March 31 from 619.2 cents in the previous year.

 

Partly state-owned Telkom will announce its results on June 22.

 

The company told unions in January it could cut up to 3,000 jobs as part of
a restructuring plan as it grappled with declining performance in its fixed
voice and fixed data services.

 

Voluntary severance and early retirement packages have cost it 1.2 billion
rand ($69.7 million).

 

The steep earnings drop is also a result of an additional 626 million rand
impairment linked to the impact of the coronavirus outbreak, it said.

 

Excluding the one-off costs, HEPS is expected to fall by 30% to 35%, mainly
as a result of lower core earnings.

 

These have been knocked by the impact of a drop in fixed voice revenues on
group earnings before interest, tax, depreciation and amortization (EBITDA),
an increase in finance charges and changes in the fair value of some assets.

 

Telkom said the 22% decline in fixed voice revenue had been offset by more
than 50% growth in mobile service revenue.

 

The contribution of fixed voice income to the group’s overall revenue has
slid to 22% in the 2019 financial year from 56% in 2013 due to shifts to new
sources of revenue such as fibre and long-term evolution (LTE) technology.

 

Telkom shares, which have fallen more than 32% year to date against a 5.7%
drop in the top 40 companies index, closed up 1.48%.

 

($1 = 17.2138 rand)

 

 

 

IMF cuts Senegal's 2020 GDP forecast to 1.1%

DAKAR (Reuters) - The International Monetary Fund has cut Senegal’s 2020
economic growth forecast to 1.1% from a 3% estimate in April due to the
effects of the coronavirus pandemic.

 

As recently as January, the Fund had expected 6.8% growth this year, but
Senegal’s economy has been battered by border closures, a curfew and social
distancing, it said in a statement late on Sunday.

 

 

 

South African insurer Discovery warns of up to 90% profit plunge

JOHANNESBURG (Reuters) - South African insurer Discovery said on Monday its
full-year profits could fall by up to 90%, hit by a 3.3 billion rand ($191
million) provision to cover the potential impact on claims and policy lapses
due to the coronavirus.

 

It also said it would not pay an annual dividend, with the payouts to be
considered when appropriate, sending its shares down 5.5% before recouping
some losses.

 

The company said the hefty provision covered the potential impact on claims
and anticipated policy lapses as stretched customers stop paying, while the
outlook also covered the impact of long-term interest rates.

 

It warned its headline earnings per share - the main profit measure in South
Africa - for the year to June 30 were expected to be between 70% and 90%
lower than the 789 cents reported a year earlier, though it said the final
outcome was subject to a high degree of volatility.

 

“Discovery is confident that the group is strong under high stress
scenarios, with sufficient liquidity and solvency to weather uncertain
conditions,” it said, adding capital ratios and cash buffers were expected
to remain within or above target.

 

The provision, Discovery said, was intended so that all of the currently
expected impact of the novel coronavirus as far ahead as 2022 was carried in
this financial year.

 

Changes to interest rates in South Africa after the government lost its
final investment-grade credit rating earlier this year, and historically low
interest rates in the United Kingdom where it has a unit, were expected to
have a further substantial impact on performance.

 

Discovery’s profits have been falling in recent years as it ploughed money
back into new businesses including a hefty investment in launching a digital
bank, which it said now has 177,000 clients and 2.1 billion rand in retail
deposits.

 

So far, lapses in most of its businesses had been low, it said, while new
business annualised premium income was up 4% for the 11 months to May 31.

 

($1 = 17.2795 rand)

 

 

 

EU imposes tariffs on Chinese makers of glass fibre fabric in China and
Egypt

BRUSSELS (Reuters) - The European Union imposed tariffs on Chinese producers
of glass fibre fabric in China and Egypt after finding they had benefited
from unfair subsidies that allowed them to sell at excessively low prices in
Europe.

 

The European Commission, which oversees trade policy in the 27 EU countries,
said in a report published on Monday that the companies had received
preferential lending, artificially cheap land and electricity and various
grants and tax breaks.

 

The companies include two Egyptian subsidiaries of state-owned China
National Building Materials Group Corp (CNBM), marking the EU’s first look
into whether Chinese aid is unfairly helping Chinese companies based abroad.
It normally only considers subsidies from the host government.

 

Combined with related anti-dumping duties, the EU will apply tariffs of
30.0% to 99.7%, the higher rates applying to China-based companies and the
lower rates to the operations in Egypt, the EU official journal said. The
tariffs are backdated to Jan. 22. The commission found the market share of
the producers in China and Egypt rose to 31% in 2018 from 23% in 2015, while
their average sales price fell by 14%.

 

Glass fibre fabrics have a wide range of applications, such as in wind
turbine blades, boats, trucks and sports equipment. EU producers include
Belgium’s European Owens CorningFiberglas, France’s Chomarat Textiles
Industries, Germany’s Saertex and Finland’s Ahlstrom-Munkzjo Glassfibre. The
commission is also looking into alleged unfair subsidies received by CNBM
subsidiary Jushi in Egypt regarding glass fibre reinforcements. It set
provisional duties of 8.7% in that case. Final findings are due in July.

 

 

 

Credit from Safaricom's farming app sows seeds of change in Kenya

BOMET, Kenya (Reuters) - Rachel Bor’s neighbours chatted, laughed and shared
milky tea from her tarnished kettle as they celebrated their most bountiful
maize crop yet on her half-acre plot in Kenya’s Rift Valley.

 

The secret behind the successful harvest was the credit they received to buy
better quality seeds, fertiliser and pesticides after enrolling on the
Digifarm mobile phone platform, the latest innovation by the region’s
biggest telecoms operator, Safaricom.

 

“Since Digifarm came to our area we have been happy. We had not been able to
harvest any maize for six years,” said Mercy Rono as she yanked a ripe corn
cob from its golden yellow stem.

 

Safaricom, part-owned by South Africa’s Vodacom and Britain’s Vodafone, is
under pressure to create new revenue streams as its voice business matures.

 

Digifarm bypasses middlemen, giving small-holder farmers direct access to
low-cost seeds and fertilizer, credit providers, and bulk purchasers of
their produce.

 

After a successful two-year pilot, during which it registered 1 million
farmers of which 42,000 are active, it is on a hiring spree and seeking new
logistics partners.

 

Like Safaricom’s wildly successful M-Pesa, a mobile payment system aimed at
small traders and Kenyans without bank accounts, Digifarm charges a small
per-transaction percentage fee.

 

Safaricom’s internal projections anticipate earnings of between 25-250
billion shillings annually ($235 million-$2.35 billion) within five years
from the platform, a company source said, representing up to 10% of annual
agricultural transactions in the country.

 

And M-Pesa’s market dominance means Safaricom doesn’t envisage any problems
attracting major financial backers for Digifarm.

 

Its biggest challenge is likely to be fragmented nature of the market, said
Professor Jane Ambuko at the University of Nairobi’s college of agriculture.
Firms like Digifarm must figure out how to reliably gather commodities from
small farms to be sold in bulk.

 

“The food supply chain is very inefficient. Until we can streamline the
supply chain... it is a hard nut to crack,” she said.

 

AFRICA AGRI-TECH

 

Although agri-tech has been constrained by lower mobile data availability in
the countryside, the market is huge.

 

Agriculture employs more than a quarter of the global workforce and is the
biggest employer in almost all the world’s poorer nations, where farmers
regularly deal with poor-quality seeds, price-fixing cartels and climate
disasters.

 

A European Union-funded study last year estimated the African agri-tech
market to be worth $2.6 billion annually, and Digifarm is not the only
newcomer.

 

In Kenya, where farming accounts for a third of annual economic output and
more than half of the workforce, tech start-up Twiga also connects farmers
with bulk purchases and has raised $55 million in three years from global
investors like Goldman Sachs. Meanwhile, the market in Nigeria is crowded
with startups like Farmcrowdy and Thrive Agric.

 

Digifarm also offers farmers insurance against weather damage, training
programmes, and advice on soil testing to increase yields. About 1,000
farmers enrolled with Digifarm are getting payouts after floods destroyed
their crops, Safaricom director Michael Joseph said.

 

IMPROVED HARVESTS

Digifarm farmers receive 10,500 shillings of credit per acre of maize, which
they repay with 15% interest once the crop is sold. Once the maize is
collected, Digifarm arranges a buyer who pays 33.3 shillings per kg of maize
- 3.3 shillings more than traditional brokers.

 

Wilson Kibet, a 50-year old farmer in Bomet, harvested 30 bags of maize from
his farm after partnering with Digifarm, up from just one bag or less in
previous seasons.

 

Farmers in the area said they could not afford to buy quality seeds and
other supplies before Digifarm unlocked financing. Training has also made a
huge difference.

 

“I...followed all the training lessons,” Kibet said, standing outside a
Digifarm maize collection centre, where farmers brought sacks of maize on
donkeys and motor-bikes. “They even told us not to plant beans in the middle
of maize rows.”

 

($1 = 106.1500 Kenyan shillings)

 

 

 

US-China trade war takes toll on their global competitiveness

The world's two biggest economies have become less competitive due to their
ongoing trade war, which seems to have no short-term resolution in sight.

 

Both China and the US have slipped down the World Competitiveness Rankings
for this year.

 

Smaller economies including Singapore, Denmark and Switzerland top the list.

 

The Institute for Management Development (IMD) survey said their handling of
the coronavirus pandemic helped strengthen their positions.

 

The US, the world's biggest economy, slipped seven places to 10th, while
China fell six places to 20th. The two economic superpowers have been locked
in a trade war since 2018 with import taxes (tariffs) imposed on a wide
range of goods.

 

The trade war has increased uncertainty for businesses, a factor weighing on
both countries' competitiveness. "Trade wars have damaged both China and the
USA's economies, reversing their positive growth trajectories," the IMD said
in its report.

 

Singapore was the most competitive economy for the second year in a row,
followed by Denmark and Switzerland. The Netherlands and Hong Kong complete
the top five highest ranking economies.

 

"The benefit of small economies in the current crisis comes from their
ability to fight a pandemic and from their economic competitiveness," said
Arturo Bris, director at the IMD. "In part, these may be fed by the fact it
is easy to find social consensus."

 

The IMD rankings assess 63 economies on hundreds of factors including
employment, cost of living and government spending. It also includes surveys
of executives on topics such as political stability and protection of
intellectual property rights.

 

The UK climbed four spots to 19th, which could be a sign that Brexit has
created the perception of a business-friendly environment, said the IMD.

 

Asia-Pacific economies have generally weakened in terms of competitiveness
with most slipping from last year's rankings. Japan dropped four places to
34th although India remained in 43rd spot.--BBC

 

 

 

US retail sales in record monthly rebound

American shoppers returned in force in May, fuelling a record 17.7% monthly
gain in retail spending after the lockdown triggered devastating declines in
the previous months.

 

The rebound only partially made up for the losses, leaving spending down
about 6% year-on-year.

 

And some sectors, such as clothing stores, have seen far steeper declines.

 

Still, the increase added to hopes that the economic recovery will be faster
than predicted.

 

Last month, US employers also added a surprise 2.5 million jobs and the
unemployment rate fell to 13.3%.

 

Capital Economics said it now expects the US economy to contract at an
annual rate of 30% in the three months to July, compared to its previous
more than 40% estimate.

 

But, senior economist Andrew Hunter warned: "There is still considerable
uncertainty over whether spending will continue to recover at this pace over
the coming months, particularly given the more recent upturn in new
coronavirus cases in a number of states."

 

US share prices headed higher on the stronger-than-expected figures, rising
more than 2% in opening trade.

 

Online companies benefited the most from the spending, with sales up more
than 30% on the year. Building material and garden stores gained 16.4%.

 

Sales at clothing stores, however, remained more than 60% lower, while
spending at restaurants and bars was nearly 40% down.

 

Speaking to Congress on Tuesday, Federal Reserve Chairman Jerome Powell
acknowledged the signs of improvement but warned that "significant
uncertainty remains about the timing and strength of the recovery".

 

"Much of that economic uncertainty comes from uncertainty about the path of
the disease and the effect of measures to contain it," he said. "Until the
public is confident that the disease is contained a full recovery is
unlikely."

 

Mr Powell said a "significant number" of the more than 20 million people who
have lost jobs in recent months are unlikely to return to work any time
soon, especially in sectors - such as food and travel - hardest hit by the
pandemic. And some of those jobs may never return, he said.

 

On Tuesday, the Hilton hotel group said it would cut 2,100 corporate jobs
around the world, a move it said was needed to protect the business.

 

The company also extended previously announced furloughs, reduced hours, and
corporate pay cuts for up to an additional three months.

 

"Never in Hilton's 101-year-history has our industry faced a global crisis
that brings travel to a virtual standstill," chief executive Christopher
Nassetta said.--BBC

 

 

 

Apple faces two EU anti-competition probes

Apple faces two European Commission probes into whether it has broken
competition rules.

 

One investigation centres on iPad and iPhones being limited to installing
apps from Apple's own App Store, among other restrictions imposed on
third-party developers.

 

The other involves Apple Pay, with one issue being that other services
cannot use the iPhone's tap-and-go facility.

 

Apple said it was "disappointing" the EU was "advancing baseless
complaints".

 

And it accused companies that had raised allegations against it of wanting a
"free ride".

 

"Our goal is simple: for our customers to have access to the best app or
service of their choice, in a safe and secure environment."

 

Apple is also under scrutiny in the US where the House Judiciary Committee
is reported to have asked for its chief executive Tim Cook to appear
alongside other tech leaders to answer questions about anti-trust concerns.

 

Amazon has said that its chief executive Jeff Bezos is willing to testify,
so long as Mr Cook and his counterparts at Facebook and Google also give
evidence.

 

The latest development comes days before Apple holds its annual developers
conference.

 

App sales

The investigation into Apple's App Store stems from a complaint raised by
the music streaming service Spotify.

 

Unlike Android, iOS does not offer a way to easily "sideload" apps that are
not distributed via the official store

Last year, it raised two specific concerns:

 

the only way developers can sell content and/or subscriptions directly
within an iOS app is via Apple's own system

publishers cannot tell users within their apps that the same items can be
bought elsewhere - for example via the service's own website

Apple typically charges apps a 30% cut of any sales, although that rate
falls to 15% for the second and later years of any subscription.

 

Publishers often sell media and other digital goods at a lower price when
bought outside of their apps, but consumers can be unaware of the fact.

 

Since Apple only allows apps to be downloaded from its own store, and has
repeatedly updated its mobile operating system to prevent "jailbreaks" that
circumvent this rule, it is argued that third-parties have little option but
to comply with its conditions.

 

The only alternative is to offer their products as web-based services, which
can limit their functionality.

 

The Financial Times has reported that Rakuten's online bookstore Kobo
recently contacted the European Commission with similar concerns.

 

"Apple's anti-competitive behaviour has intentionally disadvantaged
competitors, created an unlevel playing field, and deprived consumers of
meaningful choice for far too long," said Spotify in response to the latest
development.

 

"We welcome the European Commission's decision to formally investigate
Apple, and hope they'll act with urgency to ensure fair competition on the
iOS platform for all participants in the digital economy."

 

Mobile payments

The Apple Pay investigation centres on a technology that allows iPhones and
Apple Watches to make tap-and-go payments. It also lets users buy goods via
an app or website without having to give their payment card details to the
seller.

 

The European Commission has concerns about the conditions imposed on
services that have added the facility.

 

It also has reservations that alternative payment tech cannot make use of
the near field communication (NFC) chips in Apple's products to work with
contactless payment terminals.

 

By contrast, Samsung phones - for example - let their NFC chips be used for
both Samsung Pay and Google Pay.

 

"It is important that Apple's measures do not deny consumers the benefit of
new payment technologies, including better choice, quality, innovation and
competitive prices," said Margrethe Vestager, the EU's Competition
Commissioner and Executive Vice President.

 

The commissioner added that she had not set a deadline for the
investigations to be completed.

 

What today's move is about is the huge power over prices and innovation that
control of a platform gives to a tech giant.

 

Ever tried to buy a Kindle book via Amazon's iPhone apps? You can't because
Amazon doesn't want to see Apple walk away with a 30% cut of the purchase
price.

 

App developers big and small have protested over the years about what they
see as Apple's abuse of its position as a gatekeeper to its iOS platform.

 

Similarly, the tech giant's strict controls on the way NFC works on its
phones has sparked complaints that Apple Pay has huge advantages over what
could be more innovative payment systems.

 

Complaints about this behaviour aren't limited to Europe, but once again
Margrethe Vestager has shown that she wants to set the pace in pushing back
against the power of the big tech platforms.

 

And another American behemoth may be about to feel the heat - all the signs
are that Ms Vestager is about to determine the outcome of an existing probe
into how Amazon controls its online retailing platform.

 

The twin inquiries follow an earlier case in which Brussels ordered Apple to
pay 13bn euros ($14.4bn; £11.4bn) after claims that Ireland had given the
company illegal state aid by failing to tax it properly. The Irish
government and Apple have appealed the ruling.

 

The latest probes are likely to cast a shadow over the firm's Worldwide
Developers Conference (WWDC), which begins on Monday.

 

Apple has already claimed its app ecosystem generated more than half a
trillion dollars in sales and other billings last year, saying the vast
majority of that was not subject to it taking a commission.

 

But its relationships with some developers have become strained.

 

In recent days, one has called on Apple to reduce its standard cut from 30%
to 20% while another has accused the firm of operating a "capricious and
inconsistent review process" that can cause delays to the release of even
minor app updates.

 

In an interview pegged to last year's WWDC, Mr Cook said that he thought
that scrutiny of the firm was fair but added that regulators should bear in
mind it does not have a monopoly of any market.--BBC

 

 

 

Job cuts warning as 600,000 roles go in lockdown

The number of workers on UK payrolls dived more than 600,000 between March
and May, official figures suggest.

 

Meanwhile, the number of people claiming work-related benefits - which
includes the unemployed - was up 126% to 2.8 million.

 

The early estimates reflect the impact of around six weeks of lockdown in
which large parts of the UK were shut.

 

But economists say the full effect on employment will not be felt until wage
support schemes end in October.

 

"The slowdown in the economy is now visibly hitting the labour market,
especially in terms of hours worked," said Jonathan Athow, deputy national
statistician for economic statistics at the Office for National Statistics
(ONS)."

 

Frances O'Grady, secretary-general of the Trades Union Congress, said the
labour market was "on red alert".

 

"We need strong action now to stop lasting economic damage," she added.

 

Separate figures published by HMRC on Tuesday showed that a total of 9.1
million workers are having their wages paid through the government's
furlough scheme - more than a quarter of the workforce.

 

Why is the unemployment rate still steady?

Overall, the official UK unemployment rate for the three months to April
held steady at 3.9% as the massive state wage support in place stopped job
losses.

 

Reflecting that, the ONS said the total number of weekly hours worked in the
period dropped to 959.9 million - down by a record 94.2 million, or 9%, on
the previous year.

 

However, the agency said that early estimates from the Pay As You Earn
(PAYE) system showed that the number of payroll employees fell by 612,000,
or 2.1% , between March and May.

 

And it said there had been a record fall in job vacancies in that period to
476,000 - down 342,000 from the previous quarter - hinting at worse to come.

 

What do economists think?

Capital Economics economist Ruth Gregory said it was "abundantly clear" that
the labour market had weakened dramatically.

 

"Some of this will surely start to filter through into the actual
unemployment figures as the government's job furlough scheme is wound down
from August."

 

Tej Parikh, chief economist at the Institute of Directors, agreed: "The
furlough scheme continues to hold off the bulk of job losses, but
unemployment is likely to surge in the months ahead."

 

Yael Selfin, chief economist at KPMG UK, warned that many businesses were
expected to bring only part of their furloughed workforce back, while they
sought to tentatively reopen after the lockdown.

 

"Hiring new workers is also likely to be put on hold for some time," she
said.

 

Kayleigh Rennix has never struggled to find work before. The HR manager from
Essex was earning close to £40,000 working in the education sector before
she resigned in March, fearing her role was at risk.

 

Since then she's applied for dozens of jobs, but has had little interest
from employers.

 

"As my leaving date approached, coronavirus reared its ugly head. I would
say I've applied for more than 100 jobs and not had many call-backs," she
says.

 

Now the 34-year-old has found herself relying on benefit payments for the
first time in her life, and expects to move back in with her parents when
her tenancy expires later in the summer.

 

Some economists believe unemployment could hit 10% - a rate not since since
the mid-1990s - as social distancing rules remain in place and consumers
curb their spending.

 

The Institute of Employment Studies (IES), an apolitical think tank, pointed
out that the number of claims for work benefits had risen 1.6 million since
March - a rate faster, it says, than during the Great Depression of 1929.

 

At the same time, it says there are eight unemployed people are chasing
every job vacancy in the UK - up from just two before the crisis.

 

"It's clear too that this crisis is hitting many poorer areas hardest - with
coastal towns and ex-industrial areas seeing particularly big increases in
unemployment," said director Tony Wilson.

 

The IES said among the worst hit areas of the UK were:

 

·         Blackpool, where one in eight residents is claiming work related
benefits

·         Thanet in Kent, where the rate stands at one in eleven

·         And Birmingham, where the rate is also one in eleven.

·         The headline quarterly employment and unemployment numbers remain
barely changed, as all the furloughed workers count as having jobs.

 

The furlough scheme is working in suppressing unemployment and protecting
livelihoods so far, the real test of its functioning is what happens now.

 

The test of it will be whether those jobs remain as the taxpayer wage
support is eased away. It requires the government to inject as much
confidence as possible, into the minds of employers facing uncertainty and
declining bank balances.

 

But further rescue package and employment support will be required too. The
balancing act with the pandemic remains as delicate as ever. As one Cabinet
minister puts it - "we need to restart the economy, without restarting the
virus".

 

 

Restaurant chain owner: 'It's the worst news you can give as an employer'

Which firms are cutting jobs?

A swathe of businesses have announced job cuts as the economy has contracted
sharply due to the pandemic, opting not to furlough those workers instead.
Examples include:

 

·         The Restaurant Group, which owns Frankie and Benny's, which
expects to cut up to 3,000 workers

·         The UK's biggest builders' merchant, Travis Perkins, which plans
to cut about 2,500 jobs, or 9% of its workforce.

·         British Airways, which expects to cut 12,000 jobs

·         BP, which is slashing 10,000 jobs worldwide

·         And jet engine-maker Rolls-Royce is cutting 9,000 jobs, mainly in
the UK.

·         Bosses in sectors such as car making, aviation and hospitality
have warned there could be many further cuts without additional government
support.

 

In normal times, the employment rate tells you most of what you need to know
about jobs.

 

But these are not normal times.

 

With the furloughing scheme keeping people employed, if not working, we have
to look elsewhere to get a picture of what's happening.

 

It's like building a jigsaw, but with pieces from different boxes: surveys,
payroll data, jobs advertised, three-month trends and even looking at
week-on-week changes.

 

The picture it builds is different to the headline employment figure but
perhaps not surprising: Serious pressure on jobs during lockdown.

 

What's happening to the wider economy?

Last week, the ONS revealed the UK economy shrank by a 20.4% in April - the
largest monthly contraction on record - as the country spent its first full
month in lockdown.

 

That is three times greater than the decline seen during the whole of the
2008 to 2009 economic downturn.

 

Britain's economy is likely to slump by 11.5% in 2020, slightly outstripping
falls in countries such as Germany, France, Spain and Italy, the
Organisation for Economic Co-operation and Development has warned.

 

Meanwhile, the latest furlough figures from HMRC indicate that more than a
quarter of the UK workforce is having 80% of their monthly wages, up to
£2,500, paid by the government, while they are temporarily off work. Their
employer, which chooses whether or not to furlough workers, can top up the
remaining 20% if it wishes.

 

The Treasury also said there had been 2.6 million claims for support grants
from the self-employed.

 

The Prime Minister's spokesman said: "We are seeing the impact of
coronavirus on our economy, as is the case in many countries.

 

"It is starting to show in today's [jobs] figures but our extensive support
through the furlough scheme, grants, loans and tax cuts has protected
thousands of businesses and millions of jobs."-BBC

 

 

 

 

 

 

 

 


 

 


 

INVESTORS DIARY 2020

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


Companies under Cautionary

 

 

 


 

 

 

 


Bindura Nickel Corporation

 

 

 


Padenga Holdings

 

 

 


Delta Corporation

 

 

 


Meikles Limited

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 


DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of
Faith Capital (Pvt) Ltd for general information purposes only and does not
constitute an offer to sell or the solicitation of an offer to buy or
subscribe for any securities. The information contained in this report has
been compiled from sources believed to be reliable, but no representation or
warranty is made or guarantee given as to its accuracy or completeness. All
opinions expressed and recommendations made are subject to change without
notice. Securities or financial instruments mentioned herein may not be
suitable for all investors. Securities of emerging and mid-size growth
companies typically involve a higher degree of risk and more volatility than
the securities of more established companies. Neither Faith Capital nor any
other member of Bulls ‘n Bears nor any other person, accepts any liability
whatsoever for any loss howsoever arising from any use of this report or its
contents or otherwise arising in connection therewith. Recipients of this
report shall be solely responsible for making their own independent
investigation into the business, financial condition and future prospects of
any companies referred to in this report. Other  Indices quoted herein are
for guideline purposes only and sourced from third parties.

 


 

 


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