Major International Business Headlines Brief::: 19 June 2020

Fri Jun 19 06:46:35 CAT 2020

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Major International Business Headlines Brief::: 19 June 2020

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ü  S.Africa's bad debts may hit highest ever level of 10% due to virus

ü  Sasol revamp to cut jobs, focus on core businesses

ü  Amazon to hire 3,000 people in South Africa for customer service roles

ü  Zambia mining revenues drop 30% due to COVID-19, Chamber of Mines says

ü  Amplats targets mines at 75-80% capacity by end-year

ü  TFG looks to raise $229 mln via rights issue

ü  Tunisia's economy could shrink by as much as 7% this year

ü  Congo cuts 2020 economic growth forecast to -2.4%: cbank

ü  Colgate reviews China's Darlie brand amid race debate

ü  Sunak urges US to back digital services tax

ü  Bank pumps £100bn into UK economy to aid recovery

ü  US jobless claims worse than expected despite reopening

ü  Wirecard shares slump over missing €1.9bn

ü  Qantas axes most overseas flights until October

ü  Have we become too reliant on Big Tech firms?

ü  Tesco sells Polish supermarket business

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S.Africa's bad debts may hit highest ever level of 10% due to virus

JOHANNESBURG (Reuters) - South Africa’s bad debts could hit 10% of bank lending this year, its banking association director said on Thursday, which would be the highest ever and well above the 6% seen during the 2008/9 financial crisis.

South Africa had already slipped into recession before the coronavirus pandemic struck and struggling consumers and businesses have been hit hard by the impact of the virus and the lockdown that it prompted.

“So far, we are working with the numbers of 10% NPLs (non-performing loans) which may deplete the capital buffers,” said Bongiwe Kunene, managing director of the Banking Association South Africa, adding that this estimate was based on the aggregate amount of members’ lending books seen as at risk.

That stood at over 400 billion rands worth of lending, her presentation showed.

For comparison, South Africa’s NPLs ratio stood at 4.3% last month, according to the CEIC global economic data service, which says the 6% seen in 2009 is the highest ever ratio.

South Africa’s major banks, some of the biggest on the continent, have said they expect a sharp rise in bad debts and for profits to slip by at least 20% this year.

However, the lenders are generally better capitalised than international peers and say they have sufficient buffers to weather the storm. Shareholders and analysts also believe banks are unlikely to breach regulatory capital minimums.

Kunene said that, so far, banks had provided 7 billion rand in lending to 4,800 small coronavirus-hit firms under a government-backed loan scheme, and banks were discussing changes to increase take-up. It could also be extended to non-bank financial providers, she said.

Lenders could also extend the term of relief measures already offered to customers over the last three months, such as payment holidays, she said.

Lender FirstRand said separately on Thursday qualifying customers would be able to extend payment breaks by a further three months.

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Sasol revamp to cut jobs, focus on core businesses

JOHANNESBURG (Reuters) - Sasol Ltd plans to cut jobs and end West African oil operations as part of a business revamp, the petrochemicals producer said on Thursday, and has also agreed a deal with lenders to relax borrowing rules.

Sasol has been reviewing its business as it grapples with high debt levels, falling oil and chemical prices and lower demand due to the COVID-19 pandemic.

Its shares, which are down 54% since the start of this year, were trading flat by 0850 GMT.

The world’s top producer of motor fuel from coal, Sasol said it would refocus on chemicals and energy as it seeks to win back investors’ trust after delays at the Lake Charles Chemicals project hit profits and led to the company’s joint CEOs stepping down last October. [nL8N27D0P7]

Sasol’s interests in West African oil include a 27.75% stake in the Etame Marin Permit offshore Gabon, operated by VAALCO Energy, and a 10% interest in a 33,000 barrel per day gas-to-liquids project in Nigeria.

Sasol said the revamp would affect its workforce, but did not say how many jobs might be lost. It is seeking consultations with trade unions in South Africa and aims to do the same in other countries.

Sasol also said lenders agreed to waive its June debt covenant due and relax the December covenant.

That test will now allow Sasol to have net debt of four times earnings before interest, tax, depreciation and amortisation (EBITDA), up from three times previously, on the condition that Sasol prioritise debt reduction.

Under the agreement with lenders, Sasol will pay no dividends and pursue no acquisitions while its leverage is above three times net debt to EBITDA.

Liquidity headroom would remain well above $1 billion, Sasol said.

Sasol will focus on gas as a key feedstock and renewables as a secondary energy source in its Southern African energy business, with an aim to reduce emissions, the company also said.

Amazon to hire 3,000 people in South Africa for customer service roles

JOHANNESBURG (Reuters) - Amazon.com Inc is hiring 3,000 people in South Africa this year to provide support to customers in North America and Europe, it said on Thursday.

The work from home roles will range from customer service associates to technical experts, providing 24 hour support to customers, the world’s largest online retailer said in a statement.

The new positions will bring the total permanent workforce in South Africa to 7,000, it added.

“This decision by Amazon to locate these jobs in South Africa shows our ability to offer a good value-proposition,” the Minister of Trade, Industry and Competition, Ebrahim Patel, said in the joint statement.

Amazon is building up its presence in Africa’s most developed economy. It’s cloud computing platform — Amazon Web Services (AWS) — announced the launch of its first data centre operations in April in Cape Town.

Amazon’s history in South Africa dates back to 2004, with the customer service unit operating since 2010. It, however, doesn’t offer its e-commerce service in the country.

Zambia mining revenues drop 30% due to COVID-19, Chamber of Mines says

LUSAKA (Reuters) - Mining companies in Zambia, Africa’s No.2 copper producer, have suffered a 30% drop in revenue over the three months to April due to the COVID-19 pandemic and the fallout could last for at least 12 months, the Chamber of Mines said on Thursday.

Severe global restrictions on movement have hit mining supply chains and hindered the export and sale of copper, the mining industry association said, hurting company revenues and government coffers.

The metal is Zambia’s main foreign exchange earner and a key driver of tax revenues.

“The fall in mining revenues is mirrored exactly in the fall in mineral royalty payments, as royalties are levied on each tonne of copper that is sold,” the chamber said.

Royalty payments are estimated to have come in at $60 million to $65 million over the three months from February to April, around two-thirds of the $90 million that was expected.

A plunge in copper prices has also dented companies’ revenues.

Mining companies have also seen costs increase as they implement COVID-19 prevention measures to ensure the safety of workers and surrounding communities, the Chamber of Mines said.

“Zambia’s miners have been battling ever higher costs for years, and we are concerned about the potential consequences of such a big hit to earnings occurring now,” it said.

The chamber said mining firms would likely be grappling with revenue pressures due to the pandemic for at least 12 months.

Mining companies operating in Zambia include First Quantum Minerals, Glencore, Barrick Gold Corp and Vedanta Resources.

Amplats targets mines at 75-80% capacity by end-year

JOHANNESBURG (Reuters) - Anglo American Platinum expects to bring its mining production back up to 75% to 80% of capacity by the end of this year as South African mines recover from a forced COVID-19 shutdown, CEO Natascha Viljoen said on Thursday.

“Our ramp-up is targeted to get to 75 or 80 percent towards the end of the year,” she told reporters. Production lost during South Africa’s early lockdown, when most mines in the country shut down, would probably not be recovered, she said.

Viljoen, who was appointed as CEO in April, estimated the platinum miner had spent 25 million rand ($1.45 million) on sanitation and personal protective equipment at its mines so far.

With COVID-19 screening procedures in place at the mines, Viljoen said she estimates they will have an infection rate of between 7% and 10%.

Mining companies in South Africa are anxious about managing COVID-19 and preventing outbreaks at mine sites where workers are in close quarters and confined spaces.

AngloGold Ashanti’s Mponeng gold mine - the deepest in the world - shut down for just over a week earlier this month after 196 workers tested positive for COVID-19.

Under Amplats’ risk assessments they would likely close a mine if 20% of workers test positive, Viljoen said, although if the workers are concentrated in a particular area of the mine they might close just one part of the mine.

According to mining industry body the Minerals Council, 12,131 COVID-19 tests have been conducted across South Africa’s mines, 1,133 of which came out positive.

Despite supply chain disruptions, Viljoen said Amplats has been able to export all its platinum, though it has had to use different routes.

Amplats has spent around 1 billion Rand on the salaries of employees not at work, she said.

($1 = 17.1923 rand)

TFG looks to raise $229 mln via rights issue

JOHANNESBURG (Reuters) - South African retailer TFG said on Thursday it plans to raise 3.95 billion rand ($229.66 million) through a rights offer to lower debt and protect its balance sheet, as profits fell by 1.1% in the year to March 31.

TFG, which also operates in Australia and Britain, said the proposed rights offer is fully underwritten by a syndicate of banks comprising three of its largest lenders and its major shareholders have shown support.

“The intention really is to put us in a position to insulate the balance sheet against any shocks,” TFG group CEO Anthony Thunström said at the firm’s results presentation.

He also announced the company would axe its dividend to shareholders this year. As a result of an uncertain economic outlook, several South African companies have either slashed, postponed or axed dividends.

“There is a lot of uncertainty going forward. We’re confident that the sizing of this capital raise covers us for pretty much anything that is foreseeable in our scenario planning,” Thunström said.

The proceeds from the rights issue will also be used to invest in the business, with particular focus areas being in e-commerce and the firm’s local manufacturing “vertical integration,” Thunström said, adding that the money might also be used for any attractive acquisitions.

He quashed speculation that the clothing and homeware retailer was interested in rival Edcon, which is in bankruptcy protection and is up for sale.

“We have no interest in any of those businesses. They don’t fit strategically with us,” he said.

Its headline earnings per share - the main profit measure in South Africa - stood at 1,174.4 cents ($0.6845) per share during the period, versus a restated figure of 1,187.9 cents a year earlier.

($1 = 17.1571 rand)

Tunisia's economy could shrink by as much as 7% this year

TUNIS (Reuters) - Tunisia’s economy could shrink by up to 7% this year because of the effects of the COVID-19 pandemic, the investment minister said on Wednesday.

The government ended all restrictions on movement and businesses this month and will open its sea, land and air borders on June 27. However, the pandemic is hammering the tourism sector, which contributes nearly 10% of gross domestic product and is a key source of foreign currency.

The number of unemployed people in Tunisia will increase by 275,000, according a government study in partnership with the United Nations, investment minister Slim Azzabi said.

This would raise the unemployment rate to 21.1% in 2020, up from about 15% at the start of the year.

The study expects the economy to shrink by 4.4%, but Azzabi said the figure could rise as high as 6% or 7%.

Tourism revenue in the first five months of this year fell by about 50% from the same period of 2019 as western tourists deserted Tunisia’s hotels and resorts.

Congo cuts 2020 economic growth forecast to -2.4%: cbank

(Reuters) - The Democratic Republic of Congo’s central bank on Wednesday trimmed its economic growth forecast for 2020 to -2.4%, down from a previous projection of -1.9%, due to the impact of the coronavirus.

“This contraction, which affected all sectors of activity, is mainly explained by the measures of confinement of populations both internally and externally,” the central bank said in a statement.

Colgate reviews China's Darlie brand amid race debate

Colgate-Palmolive is reviewing Chinese toothpaste brand Darlie as firms reassess race stereotypes in products.

The popular Chinese brand features a caricature of a man with blackface make-up and the name translates as "black person toothpaste".

It is owned by Colgate and its joint venture partner Hawley & Hazel and sold widely across Asia.

A string of high-profile brands are also reviewing names and logos in light of the racism debate in the US.

The toothpaste brand was originally called Darkie before it was changed to Darlie in 1989, following pressure from shareholders and other groups. But the blackface logo remained.

"For more than 35 years, we have been working together to evolve the brand, including substantial changes to the name, logo and packaging. We are currently working with our partner to review and further evolve all aspects of the brand, including the brand name," a Colgate spokesman told the BBC.

Colgate paid $50m (£40m) in 1985 for 50% of Hong Kong-based Hawley & Hazel, the maker of Darlie. The brand controls 17% of the toothpaste market in China, 21% in Singapore, 28% in Malaysia and 45% in Taiwan, according to data firm Euromonitor International.

On Wednesday, PepsiCo said it was dropping its Aunt Jemima logo, while other food brands featuring African-American characters are reviewing their logos. Mars Inc said it was considering possible changes to the branding of its Uncle Ben's rice, which entered the market in the 1940s.

With racial injustice under the spotlight, following the death of African-American George Floyd while in police custody and the Black Lives Matter movement, corporate America has been forced to tackle the issue.

Many British firms have also been under pressure to admit links to the slave trade including brewer Greene King, Lloyd's of London and banks including RBS and Lloyds Banking Group.--BBC

Sunak urges US to back digital services tax

The coronavirus crisis has made tech firms "more powerful and more profitable", the chancellor said in a letter signed by European counterparts.

The letter from Rishi Sunak and finance ministers in France, Italy and Spain says tech giants, like Google, Amazon and Facebook, need "to pay their fair share of tax".

International talks are taking place over how online sales should be taxed.

But on Wednesday, the US said it had walked away from the negotiating table.

Ganging up on America

The US Trade Representative Robert Lighthizer told Congress the US had abandoned efforts to find a multilateral solution to taxing tech firms in talks overseen by the Organisation for Economic Cooperation and Development (OECD).

He said other nations had ganged up to "screw America".

In the letter, obtained by the BBC, the four finance ministers told the US Treasury Secretary, Steven Mnuchin, that the pandemic had increased the need for such levies.

"The current Covid-19 crisis has confirmed the need to deliver a fair and consistent allocation of profit made by multinationals operating without - or with little - physical taxable presence," the letter said.

"The pandemic has accelerated a fundamental transformation in consumption habits and increased the use of digital services, consequently reinforcing digital business models' dominant position and increasing their revenue at the expense of more traditional businesses."

OECD: No deal on digital tax risks trade war

US says a UK trade deal 'unlikely' before November

The letter continues: "Digital giants, no matter where they are headquartered, will emerge from the current crisis more powerful and more profitable."

"These companies benefit from free access to the European market. It is fair and legitimate to expect that they pay their fair share of tax within countries where they create value and profit."

The finance ministers' letter says a solution is still possible this year.

Without it, and with promises from the European finance ministers to push ahead with their taxes, a tit-for-tat trade war could be in the offing, in the middle of a severe global recession, caused by the pandemic.--BBC

Bank pumps £100bn into UK economy to aid recovery

The Bank of England will pump an extra £100bn into the UK economy to help fight the "unprecedented" coronavirus-induced downturn.

Bank policymakers voted 8-1 to increase the size of its bond-buying programme.

However, they said there was growing evidence that the hit to the economy would be "less severe" than initially feared.

The Bank's Monetary Policy Committee (MPC) also kept interest rates at a record low of 0.1%.

The move comes just days after Bank governor Andrew Bailey said policymakers were ready to take action after the economy suffered its biggest monthly contraction on record.

The UK economy shrank by 20.4% in April, while official jobs data showed the number of workers on UK payrolls fell by more than 600,000 between March and May.

The Bank said more recent indicators suggested the economy was starting to bounce back.

Minutes from the MPC's June meeting said: "Payments data are consistent with a recovery in consumer spending in May and June, and housing activity has started to pick up recently."

However, Mr Bailey warned that the outlook for the economy remained uncertain. He said: "We don't want to get too carried away by this. Let's be clear, we're still living in very unusual times."

The minutes added: "While recent demand and output data had not been quite as negative as expected, other indicators suggested greater risks around the potential for longer-lasting damage to the economy from the pandemic."

What is QE and how will it affect you?

Job cuts warning as 600,000 roles go in lockdown

Back in May, policymakers warned the economy was heading for its sharpest recession on record.

Scenarios drawn up by the Bank suggested the economy could shrink by 25% in the three months to June.

However, the MPC said more recent evidence suggested the contraction would be less severe.

The extra monetary stimulus - known as quantitative easing (QE) - will raise the total size of the Bank's asset purchase programme to £745bn.

Policymakers said the injection would help to support financial markets and underpin the recovery.

However, Andy Haldane, the Bank's chief economist, voted against the increase.

He said the recovery was happening "sooner and materially faster" than the Bank expected in May.

Slow recovery

Policymakers said the jobs market was likely to remain weak for some time, with a risk of "higher and more persistent unemployment".

Millions of workers have already seen their pay packets shrink as a result of lower pay for furloughed employees. A survey by the Bank said other companies had postponed or cancelled pay rises this year.

Mr Bailey said: "Even with the relaxation of some Covid-related restrictions on economic activity, a degree of precautionary behaviour by households and businesses is likely to persist. The economy, and especially the labour market, will therefore take some time to recover towards its previous path."

Weak inflation

Mr Bailey also addressed the recent fall in UK inflation in an open letter to Chancellor Rishi Sunak.

Inflation, as measured by the consumer prices index (CPI), fell to 0.5% in May, from 0.8% in April - well below the Bank of England's 2% target.

Mr Bailey said weak inflation had been by driven by falling oil and energy prices, as well as a global drop in economic activity.

The Bank expects inflation to return to target within two years.

Samuel Tombs of Pantheon Macroeconomics expects the Bank to increase QE again later this year.

"Unemployment looks set to rise sharply in the second half of this year and to fall back slowly thereafter," he said.

"The resulting prolonged weakness in domestically generated inflation likely will necessitate the MPC doing more to stimulate the economy in the winter."

The Bank of England has increased its support for the economy, despite it assessing that the outlook is not quite as awful as its scenario last month. The economy is on course for a hit in the second quarter of about 20% compared with the final three months of 2019. That's still historic, and off the scale, but not quite as extreme as the 27% it predicted in May.

The extra £100bn of purchases of government bonds also has the air of an insurance policy.

Most of the MPC were concerned about a couple of factors, A less awful outlook does not mean the recovery will be quick. This is for two reasons stretching beyond economics.

There is a fear that the "prevalence of the virus" in the UK will mean that Britons will continue to socially distance, voluntarily, holding back the recovery more than other nations (Germany would be an example).

Related to that was the idea that more QE now could mitigate the economic impact of "higher rates of Covid-19 infection going forward" - a second wave.

So the news is still bad, but less awful. But risks beyond the purely economic led to more billions being injected into the economy.--BBC

US jobless claims worse than expected despite reopening

A further 1.5 million Americans filed for unemployment last week, a higher-than-expected number that signals the economic damage caused by the pandemic is continuing.

Although reopening is underway throughout the country, the number of new applications for benefits fell by just 58,000, the Labor Department said.

It was the 13th week in a row the figures have held above one million.

The claims remain more than double the pre-pandemic record set in 1982.

The smaller-than-expected decline in claims last week likely reflects "some moderation" in the pace of reopening, Wells Fargo economics said.

Human suffering

US employers added a surprise 2.5 million jobs last month and the unemployment rate fell to 13.3%, the Labor Department said earlier in its monthly report.

But most analysts expect the US unemployment rate to be above 9% at the end of the year - close to the high set in the aftermath of the 2008 financial crisis.

The Labor Department's report on Thursday showed more than 29 million people - nearly one in five American workers - continued to collect jobless benefits as of 30 May.

"Like the threat posed by the virus, we must not become complacent about the level of human suffering associated with the economic downturn simply because of its persistence," said Mark Hamrick, senior economic analyst at Bankrate.com.

The head of the US central bank this week warned of "significant uncertainty" regarding the recovery and told Congress he thought further economic relief would be necessary.--BBC

Wirecard shares slump over missing €1.9bn

Shares in German payments company Wirecard have fallen more than 60% after the firm said its auditor had raised questions over cash balances worth €1.9bn (£1.7bn).

Auditors EY had refused to sign off on Wirecard's accounts, saying it was unable to confirm the money existed.

The missing sum amounts to about a quarter of its total balance sheet.

Wirecard said there was evidence of "spurious" figures intended "to deceive the auditor".

Wirecard joined Germany's blue-chip Dax 30 share index two years ago. At the time, it was valued at €24bn, but following the latest share price crash this has fallen to just €4bn.

The scandal came to light after a series of articles in the Financial Times last year focusing on alleged accounting irregularities in Wirecard's Asian operations.

The missing money was supposed to be held in accounts at two Asian banks and had been set aside for "risk management", Wirecard said.

However, EY auditors said the banks had been unable to provide the account numbers.

Wirecard said there were "indications that spurious balance confirmations had been provided" by a trustee "in order to deceive the auditor and create a wrong perception of the existence of such cash balances or the holding of the accounts".

"The Wirecard management board is working intensively together with the auditor towards a clarification of the situation," said the company.--BBC

Qantas axes most overseas flights until October

Qantas has cancelled all international flights until late October except for those to New Zealand.

The news comes as the Australian government said its border would remain closed into next year to slow the spread of the coronavirus.

The airline and subsidiary Jetstar are now boosting domestic flights as travel restrictions within Australia ease.

Qantas has seen domestic passenger numbers double to 64,000 this week, compared to last week's 32,000.

The nation's tourism minister has also encouraged Australians to take their holidays within the country this year.

“With Australia’s borders set to remain closed for some time, we have cancelled most international flights until late October," the airline said in a statement sent to the BBC.

"We still have some flights scheduled across the Tasman in the coming months, with the expected travel bubble between Australia and New Zealand," the statement continued, referring to the Tasman Sea between the two countries.

The airline pointed to comments from Tourism Minister Simon Birmingham for its announcement on Thursday.

Mr Birmingham said on Wednesday that the decision to shut the country's border was one of the main reasons Australia had been successful in fighting the spread of Covid-19 and it would not be reopened any time soon for general travel.

"I do sadly think that in terms of open tourist-related travel in or out of Australia, that remains quite some distance off," he told the National Press Club.

When asked whether that would mean the border would remain closed until next year, Mr Birmingham said, "I think that is more likely the case".

Adding more flights

Qantas also reiterated that it will increase domestic flights to 15% of pre-coronavirus levels as some travel restrictions are lifted.

At the same time the airline said that it is ready to ramp its international schedule as soon as government regulations allow.

“Should travel between Australia and other countries open up and demand returns, we can add more flights back into our schedule."

Qantas, like many other carriers, has been hit hard by travel restrictions imposed around the world to combat the spread of the coronavirus.

A number of high-profile airlines have been struggling to survive during the crisis including Virgin Australia, Thai Airways and Colombia's Avianca.

Other airlines have been forced to layoff thousands of workers and downsize operations.

Earlier this month the International Air Transport Association (IATA) warned that the airline industry could suffer losses of more than $84bn (£67bn) this year.--BBC

Have we become too reliant on Big Tech firms?

"We wouldn't have survived without Amazon," says Keith Ingram, owner of vinyl records shop Assai Records.

When lockdown hit on 23 March in the UK, Mr Ingram had to shut his shops in Edinburgh and Dundee, and sell his stock through Amazon Marketplace. Now, his sales are 40% higher than last year.

"Without Amazon, we would have had to furlough all employees for all of lockdown. Instead, we furloughed them for four weeks until we adjusted ourselves to the new normal, and then we could retrain staff to help us fulfil our online orders," he says.

It's not just Amazon that has been used more during the pandemic. Apple and Android smartphones and tablets, Facebook's apps and Microsoft tools have provided crucial links with friends, family and colleagues.

And that's certainly been great for investors and the billionaires behind these firms. Shares in Facebook, Apple, Amazon and Microsoft all hit all-time highs on the stock market in June.

Between 18 March and 19 May, Amazon's Jeff Bezos saw his wealth swell by $34.6bn (£27.6bn) and Facebook's Mark Zuckerberg's wealth rose by $25bn (£19.9bn), according to a recent report.

But is this reliance on Big Tech getting out of control?

"Amazon have gone from being the dominant gatekeepers for online commerce to being the dominant gatekeeper for much of retail because of the lockdowns," says Stacy Mitchell, co-director of the Institute for Local Self-Reliance, the US organisation that challenges concentrated economic and political power.

Meanwhile, this week the UK government announced that it would be using a coronavirus-tracing app based on technology from Apple and Google.

Germany, Italy and Denmark are among other countries also using that system.

Big Tech firms have been getting even bigger during the pandemic and their success means they have plenty of funds to snap up other businesses.

For example, in May Facebook announced its second biggest deal - a plan to buy a 10% stake in India's Jio, a telecoms and digital services business.

"All of them will be in the M&A [mergers and acquisitions] game if they're not already. Start-ups are more likely to sell out during the pandemic when they might struggle to meet their obligations and the buyout looks especially attractive - the pandemic is speeding up the buyout date in some cases," says Sandeep Vaheesan, legal director at the Open Markets Institute, a think-tank that studies corporate concentration.

Before the pandemic, there had been scrutiny on Big Tech. The US House Judiciary antitrust subcommittee sent requests for information to Amazon, Apple, Google owner Alphabet and Facebook in September 2019, with the government concerned that only a small number of companies hold such a big share of the digital market.

Coronavirus may have delayed these investigations, but they will still be carried out.

"Those focused on antitrust will renew their attention on big tech companies because we're in an election year [in the US] and both parties are going to want the attention on their efforts to regulate business," says Jonathan Osborne, a lawyer from Globalaw's law firm Gunster.

Mr Vaheesan warns that in the US, the Department of Justice (DoJ) and the Federal Trade Commission (FTC) have not taken company acquisitions seriously enough - clearing the acquisitions of Instagram and WhatsApp by Facebook, and YouTube and Android by Google.

He is not optimistic that the DoJ and the FTC will change their approach in the future.

In the UK, Amazon's multi-million pound investment in Deliveroo was provisionally cleared by competition chiefs because the takeaway courier said it would collapse if it was blocked. A final ruling is due on 6 August.

"That was a one-off, the Competition and Markets Authority (CMA) looked at the market circumstances and saw them changing because of the pandemic, but the pandemic is not a reason for Big Tech companies to get away with scrutiny - absolutely not," says Jonathan Branton, head of competition at law firm DWF.

The CMA has since announced it is investigating Facebook's acquisition of Giphy, the popular owner of a library of short animations and stickers used in social media.

But is the current level of scrutiny enough, and will it change because of the pandemic?

"It's hard to look into a crystal ball. I think Microsoft has taken a strong stance on trust, security and ethical use of AI, and while we've been focusing more on the crisis response in the short term, we still maintain and apply these principles and they will apply in the future. It's then about how public, industry and government look at that across the usage of Big Tech in the market," says Microsoft's Azure business lead Michael Wignall.

Mr Vaheesan suggests that these major investigations into tech companies may not be what they seem.

"It's too soon to say whether these are serious inquiries or whether they're merely a window dressing responding to the public and political concerns about the power of the big five tech companies."

In the US the picture is further complicated by President Trump's fraught relationship with Twitter.

In May, for the first time, the company attached fact-check links to the President's tweets.

That prompted a furious response from the White House with the President threatening to "strongly regulate" or even "close down" social media firms.

Facebook has also been under pressure to remove comments made by the President, but has so far kept his posts up.

To help protect their interests, the Big Tech firms have hundreds of lobbyists working in Washington.

"When I meet with elected representatives in Washington DC, they're almost a bit bereft that there are more lobbyists than they have staffers to write this legislation," says Scott Galloway, professor of marketing at NYU Stern.

"The budgets at DoJ and the FTC have been cut every year, so although there's more likely to be anti-trust action with a change in the White House, the question is whether the US government even has the resources anymore," says Mr Galloway.

Mr Galloway believes that Europe is more likely to take the lead on tougher sanctions against Big Tech than the US.

"Europe gets all of the downside of big tech... but they get very little of the upside. In the US, these are tremendous economic engines, providing a lot of jobs and a source of pride - they create that ecosystem of other successful companies around them," he says.

The European Commission announced two new antitrust investigations into Apple this week, while a recent Wall Street Journal report suggested that Amazon could be next on the EU's agenda, over its treatment of third party sellers.

"It raises the question: why are we so dependent on a handful of large companies? Would we actually lose anything as a society if we had multiple online marketplaces? There's really nothing that compels us to accept the present structure of these markets," says Mr Vaheesan.

Big tech may be getting stronger during the pandemic, but it may actually make things harder for them in the long term.

Amazon, Facebook, Apple and Alphabet were asked for a response but declined to comment.--BBC

Tesco sells Polish supermarket business

Tesco has agreed to sell its business in Poland as it continues to scale back its international operations.

The UK supermarket giant is selling its 301-store Polish business to Danish retail group Salling Group for £181m.

It said the sale would allow it to focus on its central European markets of Czech Republic, Hungary and Slovakia where it commands more of the market.

The company has also retreated from Thailand and Malaysia so far this year as it curbs its global ambitions.

"We have seen significant progress in our business in Central Europe, but continue to see market challenges in Poland," said Tesco chief executive Dave Lewis.

"Today's announcement allows us to focus in the region on our business in Czech Republic, Hungary and Slovakia, where we have stronger market positions."

The company said it had also made "good progress" in selling its remaining Polish property outside of the deal with Salling. It said it had raised £200m over the past 18 months by either selling or agreeing to sell 22 stores.

In March, Tesco sold its operations in Thailand and Malaysia for $10.6bn (£8bn).

The supermarket chain had 2,000 stores across both countries, under the Tesco Lotus brand, and sold them to Thai conglomerate CP Group.

That sale generated enough for a special dividend for shareholders.

Changing habits

Tesco is facing increased competition in the UK as shoppers turn to budget chains such as Aldi and Lidl.

But the coronavirus lockdown has also been changing shopping habits.

People have reverted to shopping the way they did a decade ago by making one big weekly trip to the supermarket, Mr Lewis said in April.

He said Covid-19 social distancing measures mean consumers were shopping less frequently.

The number of transactions in April nearly halved, but the size of the average basket had doubled.--BBC

INVESTORS DIARY 2020

Company

Event

Venue

Date & Time

Companies under Cautionary

Bindura Nickel Corporation

Padenga Holdings

Delta Corporation

Meikles Limited

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