Major International Business Headlines Brief::: 30 June 2020

Tue Jun 30 07:16:27 CAT 2020

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Major International Business Headlines Brief::: 30 June 2020

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

ü  Kenya loses 80 bln shillings in tourism revenue due to coronavirus

ü  "On our knees": Kenya's tourism revenue collapses

ü  Nissan to launch 7 models in Africa to pursue growth

ü  South African casinos switch slot machines back on, but hurdles remain

ü  Libya's NOC confirms international talks on resuming oil output

ü  Uganda power distributor Umeme to invest $83 mln to boost network

ü  Sudan says it will rein in state firms, including those owned by security

ü  Sasol to sell stakes in Mozambique pipeline, power plant - sources

ü  PM pledges to 'build back better' post-virus

ü  Wirecard: Financial watchdog lifts restrictions on payments

ü  Kweichow Moutai: 'Elite' alcohol brand is China's most valuable firm

ü  Cirque du Soleil cuts 3,500 jobs to avoid bankruptcy

ü  BP sells petrochemicals business to Ineos in $5bn deal

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Kenya loses 80 bln shillings in tourism revenue due to coronavirus

(Reuters) - Kenya has lost 80 billion shillings ($751.88 million) so far in revenue from its tourism sector, about half of last year’s total, due to the coronavirus crisis, its tourism minister said on Monday. ($1 = 106.4000 Kenyan shillings) 

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"On our knees": Kenya's tourism revenue collapses

(Reuters) - Kenya has lost 80 billion shillings ($752 million) so far in tourism revenue, about half of last year’s total, due to the coronavirus crisis, its tourism minister said on Monday.

The sector is one of the leading sources of foreign exchange, earning 163.56 billion shillings ($1.54 billion) last year, which had been expected to grow 1% in 2020.

Tourism Minister Najib Balala said things would get worse before they can improve. “The second half is almost as good as zero. So we have a major problem,” he told reporters after launching his ministry’s study on COVID-19’s impact.

The estimated losses include cancelled bookings for the high season months of July-October, said Mohammed Hersi, the chairman of the Kenya Tourism Federation, a private sector lobby.

>From Indian Ocean beaches to the Maasai Mara wildlife reserve, tourism contributes 10% of Kenya’s annual economic output and employs over 2 million people.

Kenya, which so far has confirmed more than 6,000 cases of the disease, shut its airspace to commercial flights in March. It has also banned movement into and out of the capital Nairobi and the coastal resort city of Mombasa.

“OUT OF BUSINESS”

“The entire tourism sector is out of business. There are major job losses,” Balala said. “We are on our knees.”

Resorts will be required to observe strict social distancing and hygiene measures to curb the spread of the virus once they reopen, Balala said, without giving any timelines.

The government has also ordered all bars and nightclubs to be closed and it has imposed a daily, nighttime curfew to curb the spread of the virus.

Despite its wide variety of tourist products, Kenya attracts fewer visitors than competitors like South Africa due to frequent political upheavals and insurgent attacks.

Between 2012 and 2015, visitor numbers and tourism earnings fell after a spate of attacks claimed by Somalia’s al Qaeda-linked al Shabaab, which wants Nairobi to pull troops out of Somalia.

A reduction in attacks in the years that followed allowed the sector to rebound.

$1 = 106.4500 Kenyan shillings 

Nissan to launch 7 models in Africa to pursue growth

JOHANNESBURG (Reuters) - Nissan Motor Co aims to launch seven new models in Africa over the next two years, company executives said on Monday, as the Japanese automaker seeks to focus on high-growth markets to try to weather the impact of the COVID-19 crisis.

The company announced a plan last month to cut the number of models it makes globally and improve efficiency after the pandemic triggered its first annual loss in 11 years.

Nissan will expand its SUV and cross-over portfolio in Africa with seven new models, of which four will be in the SUV (sports utility vehicle) category, Shinkichi Izumi, managing director at Nissan South Africa, said.

It plans to make Africa a hub for light commercial vehicles (LCV), will increase production of its popular Navara pick-ups and open plants in Ghana and Kenya, Izumi said.

He did not disclose details of the investment and levels of production for the region, although Nissan said last year it would spend 3 billion rand ($174.07 million) on its Navara model.

“We are going to locally produce the new Navara model and we are also looking at export,” Guillaume Cartier, Chairman for Nissan’s Africa, Middle East, and India (AMI) region, told a media call.

($1 = 17.2344 rand)

South African casinos switch slot machines back on, but hurdles remain

PRETORIA, South Africa (Reuters) - When Sun International’s Times Square Casino in South Africa’s administrative capital Pretoria opens its doors again on Monday, following a three-month shutdown, every second slot machine will be off and shields will separate clients.

The seating arrangement, designed to maintain physical distance between customers, is one of the new measures casinos are putting in place to reduce the spread of the coronavirus.

The casino, as are others, is only allowed to operate at 50% capacity of its over 2,000 slot machines and 60 casino tables to avoid crowding, as South Africa eased lockdown restrictions further on Monday.

The industry is one of the hardest hit by the lockdown restrictions imposed from late March to slow the spread of the virus.

Sun International rival Tsogo Sun Gaming lost an estimated 2 billion rand ($116.05 million) in revenue during the three-month lockdown. Sun International has proposed raising 1.2 billion rand through a rights issue in order to survive the pandemic.

The industry, which contributes around 1% to the economy, is among the few sectors in the country which had been growing above 4% before the outbreak. It generated over 18 billion rand in revenues in 2018.

It has welcomed the reopening, but it does not expect to see many ardent gamblers rushing back to roulette and poker games soon. A ban on alcohol sales will also hurt.

“Downstairs we’re not opening those (casino) tables yet because we don’t know how many customers will come,” Time Square casino general manager Ruben Gooranah told Reuters inside the two-floor casino.

Due to the half-capacity limit, Sun International will temporarily lay off some workers until it can operate at full capacity.

It will also not reopen its Sun City Resort which depends on visitors from the country’s other regions, Group Chief Executive Anthony Leeming said.

($1 = 17.2338 rand)

Libya's NOC confirms international talks on resuming oil output

TUNIS (Reuters) - Libya’s National Oil Corporation (NOC) hopes oil production will resume after international talks to end a blockade by eastern-based forces in the civil war, which has stopped almost all energy exports for six months, it said on Monday.

The eastern-based forces shut down Libya’s oil production in January, putting financial pressure on the internationally recognised government in Tripoli, in the west, but also cutting off revenue for state institutions operating across the country.

A possible deal to allow production to restart would involve a new agreement on distributing oil revenue, as well as guarantees on field security, a person familiar with the matter said.

Ending the blockade could also make it easier to agree to a ceasefire, with Libya’s warring sides and their foreign backers continuing to mobilise forces around the coastal city of Sirte.

Libya has been split since 2014 between rival factions in Tripoli, home to the internationally recognised Government of National Accord (GNA), and in the east, where Khalifa Haftar’s Libyan National Army (LNA) holds sway.

Though an eastern government aligned with Haftar has set up parallel institutions, international agreements say only the NOC in Tripoli can produce and export oil, with revenue channelled through the Central Bank of Libya (CBL) in the capital.

The eastern administration and its foreign supporters want oil revenue to flow to it directly, rather than through the CBL. Diplomats say the east has attempted to export oil directly, in breach of those rules, during the blockade.

This year Turkish backing has helped the GNA suddenly regain control of most of the northwest, after beating back a 14-month assault on the capital by the LNA, which is backed by the United Arab Emirates, Russia and Egypt.

The LNA still controls the east and south, including most major oil fields and export terminals.

OIL DISTRIBUTION

After the GNA’s gains this month, NOC attempted to reopen Sharara and El Feel oil fields, before armed groups stopped it. Last week it said Russian mercenaries had occupied Sharara.

There have been negotiations in recent weeks between NOC, the GNA and regional countries, overseen by the United Nations and United States, an NOC spokesman said.

“We are hopeful that those regional countries will lift the blockade and allow us to resume our work,” the spokesman said.

The GNA says the LNA is behind the blockade, which was announced in January by local groups including tribes. The LNA says the tribes imposed the blockade themselves.

On Monday, some of the tribes said in a statement that they were reopening the oil fields and handing authority to negotiate a resumption in output to the LNA, a possible sign that the deal is close to agreement.

An LNA spokesman said on television that it welcomed any popular mandate to protect the oilfields.

The NOC spokesman said the company would start producing oil again right away if workers’ security was guaranteed.

“We need to resume work immediately to save our infrastructure and the Libyan economy,” the spokesman said.

“NOC is determined that the agreement will guarantee transparency and that oil revenues will achieve social justice for all Libyans,” he said.

Uganda power distributor Umeme to invest $83 mln to boost network

KAMPALA (Reuters) - Uganda’s sole electricity distributor, Umeme Limited, plans to spend 310 billion shillings ($83.27 million) this year to boost grid capacity and quality, its chief executive said on Monday.

The investments will help the firm distribute more power from a new hydropower plant being built by Chinese firm Sinohydro on the Nile river, which is scheduled to be completed in the first quarter of 2021.

“We need to increase the network capacity to deliver this power to end users,” Umeme CEO Selestino Babungi told a news conference.

The East African nation has sufficient power supplies but consumers routinely suffer from outages caused by breakdowns along the aged and fragile distribution infrastructure.

Umeme, which is listed on both the Ugandan and Kenyan stock exchanges, will construct new, high voltage lines and switching stations to make power supplies more stable, Babungi said.

When Karuma comes online, it will increase Uganda’s generation capacity to more than 1,800 megawatts.

The government plans to drive up access to electricity to 60% of the population by 2027 from the current 25%.

($1 = 3,723.0000 Ugandan shillings)

Sudan says it will rein in state firms, including those owned by security

KHARTOUM (Reuters) - Sudan’s finance ministry said on Sunday it would take control over all state firms, including ones owned by the security forces, as it works to straighten out the country’s faltering economy and open it up to foreign financing.

The measure is part of a 12-month reform package worked out with the International Monetary Fund (IMF) that also aims to reduce fuel subsidies, stabilise the currency and open gold trading to the private sector.

Tackling the security sector’s extensive economic power is seen as one of the toughest challenges of a 39-month transition following a coup last year that ended three decades of rule by Omar al-Bashir. The military and civilian groups are now running the country in a fragile power sharing arrangement.

“The Transitional Government will prepare and publish an inventory of all state-owned enterprises, including those overseen by the Ministry of Finance and Economic Planning, other ministries, as well as the security sector,” the ministry said a statement on Sunday.

The government would issue decrees within six months ensuring “ownership, complete oversight and transparency over all state-owned enterprises,” to avoid political interference and conflicts of interest in the management and oversight of the companies, the statement added.

A Sudanese committee chaired by Prime Minister Abdalla Hamdok approved a plan 10 days ago to liquidate many of the country’s 650 state-owned companies and privatise others.

Inflation in Sudan is running at over 110%, the economy is expected to contract by 8% this year after contracting by 2.5% in 2019, and the ratio of debt to gross domestic produce is at 190%, one of the highest in the world, the statement said.

Sasol to sell stakes in Mozambique pipeline, power plant - sources

JOHANNESBURG (Reuters) - Struggling petrochemicals producer Sasol has appointed advisers to sell its stakes in a power plant in Mozambique and a gas pipeline running from the country into South Africa, two sources familiar with the matter told Reuters.

Sasol, the world’s top producer of motor fuel from coal, is trying to shed assets to pay off its debt pile and avoid a rights issue of up to $2 billion, but has not previously flagged the Mozambique assets as up for sale.

It has appointed South Africa’s Nedbank to manage the sale of its 50% stake in the Republic of Mozambique Pipeline Company (ROMPCO), the joint venture operating the pipeline that runs 865 kilometres from Mozambique into South Africa, the sources said.

“We do not comment on ongoing commercially sensitive and/or M&A processes and we do not react to market speculation,” a Sasol spokesman wrote in an email.

The sources said the company had also appointed Deloitte to sell its 49% stake in Central Termica de Ressano Garcia (CTRG), Mozambique’s first permanent large-scale gas power plant which, at a capacity of 175 megawatts, meets almost a quarter of the country’s energy demand, according to Sasol’s website.

Mozambique’s state-run National Hydrocarbon Company (ENH) and South Africa’s government-owned Central Energy Fund (CEF) each hold 25% stakes in ROMPCO.

ENH, CEF, and Deloitte did not immediately respond to requests for comment. Nedbank declined to comment.

The other 51% of CTRG is held by Mozambique’s state power utility EDM. EDM could not immediately be reached for comment.

As part of a business revamp, Sasol said last week it would cut jobs and exit West African oil operations.

PM pledges to 'build back better' post-virus

Boris Johnson will promise to "build back better" as he unveils government plans to soften the economic impact of coronavirus.

Speaking in the West Midlands, the prime minister will say he wants to use the coronavirus crisis "to tackle this country's great unresolved challenges".

As part of a "new deal", Mr Johnson will set out plans to "bring forward" £5bn on infrastructure projects.

Labour called for a "laser-like focus" on preventing job losses.

The prime minister's speech comes as BBC analysis found that the UK was the hardest hit of all the G7 major industrialised nations by the virus in the weeks leading up to early June.

In April, the UK economy shrunk by a record 20.4% as a result of the spread of coronavirus and the subsequent lockdown measures.

In a bid to boost the country's financial outlook, Mr Johnson will pledge to put jobs and infrastructure at the centre of the government's economic growth with a commitment to "build, build, build".

Aiming to emulate the New Deal policies of the depression-era American President Franklin D. Roosevelt, Mr Johnson will say he wants a government that "puts its arms around people at a time of crisis".

In the aftermath of the Wall Street Crash of 1929, President Roosevelt launched one of the largest, most expensive US government programmes which included building schools, hospitals and dams.

Mr Johnson will say he wants to use the coronavirus crisis as an opportunity to "to build the homes, to fix the NHS, to tackle the skills crisis, to mend the indefensible gap in opportunity and productivity and connectivity between the regions of the UK".

"Too many parts of this country have felt left behind, neglected, unloved, as though someone had taken a strategic decision that their fate did not matter as much as the metropolis.

"And so I want you to know that this government not only has a vision to change this country for the better, we have a mission to unite and level up."

Projects in the £5bn investment plan includes:

·         £1.5bn for hospital maintenance, eradicating mental health dormitories, enabling hospital building and improving A&E capacity

·         £100m for 29 road network projects including bridge repairs in Sandwell and improving the A15 in the Humber region

·         £900m for "shovel ready" local projects in England this year and in 2021

·         £500,000 - £1m for each area in the towns fund to spend on improvements to parks, high street and transport

·         Over £1bn to fund a schools building project, as announced on Monday

·         £83m for maintenance of prisons and youth offender facilities, and £60m for temporary prison places.

The government says it will bring forward funding to "accelerate" infrastructure projects in Scotland, Wales and Northern Ireland.

Chancellor Rishi Sunak will provide an update on the economy next week and in the autumn the government will publish a National Infrastructure Strategy.

A Downing Street statement said that "while in the long-term the government must set a path to balance the books, the prime minister is clear that we will not do so at the expense of investing now in the productive potential of the economy, or at the expense of the resilience of the UK's public services".

Responding to the announcement, Labour's shadow chancellor Anneliese Dodds said: "Our country is suffering the worst economic hit of all industrialised nations, but instead of the back-to-work budget our country needs focusing on one thing - jobs, jobs, jobs - the chancellor will only be providing an 'update' on the economy."

She urged the government to "abandon their 'one-size-fits-all' approach to the economic support schemes" and instead offer "concrete action and a laser-like focus preventing further job losses and supporting future employment".

Liberal Democrat education spokeswoman and party leadership contender Layla Moran said Mr Johnson's speech looked like "a rehash of manifesto pledges" and accused the government of "running out of ideas".

Federation of Small Businesses (FSB) national chairman Mike Cherry said the announcement was "encouraging" but said it was important that small businesses were not "locked out of the ambition to build... because of cumbersome public sector procurement rules".

And British Chamber of Commerce director-general Adam Marshall said the government's plans had to "take shape on the ground swiftly to give a real confidence boost to businesses and communities".

For weeks ministers, including Mr Johnson, have been promising a bold green recovery package to create jobs whilst cutting carbon emissions. In the pre-released summary of his speech the prime minister did pledge to "build back greener" - but some environmentalists consider his response inadequate.

The think tank Green Alliance, for instance, calculates that ministers need to spend £14bn to meet CO2 targets. It says the government is spending £9bn on projects that actually harm the climate.

Mr Johnson re-iterated a policy of planting 75,000 acres of forest a year and said he'd create new conservation rangers.

But he didn't mention home insulation - the sector consistently judged best for cutting emissions and creating jobs.

And there was no suggestion of scaling back the £27bn roads programme, which will increase emissions and is judged by the Trades Union Congress to be poor value for job creation.--BBC

Wirecard: Financial watchdog lifts restrictions on payments

The UK's financial watchdog has lifted restrictions on German payments company Wirecard, allowing it to resume payment activities.

The Financial Conduct Authority (FCA) imposed restrictions on the company's UK arm after its collapse last week.

Thousands of people could not access their money or make payments through apps as a result.

"Our primary objective all along has been to protect the interests and money of consumers," the FCA said.

Customers should now, or very shortly, be able to use their cards as usual.

"We have been working closely with Wirecard UK and other authorities over the last few days to ensure that the firm was able to meet certain conditions required to lift the restrictions we imposed on it," the FCA said in a statement.

"We are now in a position to allow Wirecard to resume operational activity."

Several British technology companies were forced to suspend services due to the FCA restrictions, leaving thousands of accounts blocked.

Online firm Pockit's payment cards, for example, were locked because they used a payment processing service owned by Wirecard.

Dawn Guilfoyle is one of thousands who were barred from using their cash cards because of the failure of huge German payments firm Wirecard.

"It's really bad. I'm left with nothing," she says. "Once the gas goes off, I'll have none for cooking or hot water."

Ms Guilfoyle's card, from the online firm Pockit, was frozen because the FCA wanted to make sure the money is safe.

Read more about her story here.

The FCA said any customers who are still experiencing difficulties in using their card should contact their card provider directly.

The action came after the German parent firm Wirecard last week disclosed a €1.9bn (£1.7bn) hole in its accounts, and subsequently filed for insolvency.

Former boss Markus Braun has been arrested and accused of inflating Wirecard's finances to make them appear healthier to investors and customers.

On Monday, the FCA said: "There continue to be certain requirements in place, which have been imposed on Wirecard's authorisation.

"These requirements include restrictions over where it can hold customer monies and restrictions over its ability to transfer its own assets."

"The FCA continues to work with the firm to progress these matters," it added.

Wirecard did not immediately respond to the BBC's request for comment.--BBC

Kweichow Moutai: 'Elite' alcohol brand is China's most valuable firm

A drinks maker has become China's most valuable publicly-listed company, overtaking the country's biggest bank.

Kweichow Moutai is a luxury spirit favoured by Chinese politicians and businesspeople looking to impress.

The company's share price has risen dramatically this year, pushing its value to new highs.

Despite producing one of China's most prestigious brands, few people will have heard of it outside of the country until now.

As its value has risen, Kweichow Moutai has leapfrogged Industrial & Commercial Bank of China (ICBC), the world's largest commercial bank by assets, to become the country's most valuable public company.

Its share price has rocketed more than 20% so far this year according to data from Refinitiv and it is one of the few Chinese listed companies whose share price has exceeded 100 yuan (£11, $14).

Chinese tech giant Alibaba is more valuable, but isn't listed in China. Huawei, another well-known Chinese company, is privately owned.

Based on Monday's closing share prices, Kweichow Moutai is currently valued at more than 1.8tn yuan. ICBC is currently worth just under 1.8tn yuan.

What is Kweichow Moutai?

Kweichow Moutai has an unusual corporate structure. It is partially state-owned and partially publicly-listed on the Shanghai Stock Exchange.

Formed in 1999, Kweichow Moutai is the world's most valuable liquor company, having surpassed UK-based Diageo three years ago.

It manufactures and distributes a unique brand of baijiu, a clear and colourless liquor which is considered China's national spirit.

Baijiu typically has an alcohol content of between 35% and 60% by volume.

John Watkins, an alcohol industry expert who has worked extensively in China, said: "Doing shots with Moutai is part of the business culture and accelerates building trust and friendships."

Talking about the manufacturer, he added: "It appears from the outside to be a well-run company that will be able to generate sustainable and growing profits as China's consumer market grows and has more and more purchasing power."

Why is it so prestigious?

Kweichow Moutai was a favourite drink of People's Republic of China's (PRC) founding father Mao Zedong who famously served it at state dinners during US President Richard Nixon's visit to China in 1972.

In 1974, the US Secretary of State Henry Kissinger told Deng Xiaoping, China's future paramount leader: "I think if we drink enough Moutai we can solve anything."

Such glowing endorsements made Moutai the brand of choice for the elite, a must-have at business banquets and a display of wealth and power.

"It is considered as a status symbol because of the high price and limited supply, which I believe it is part of Moutai's marketing and sales strategy," said David Liu, an analyst and regular baijiu drinker based in Shanghai.

Shares in Kweichow Moutai have risen since the coronavirus pandemic broke out in China, while other alcohol brands have seen their values fall.

Kweichow Moutai is often drunk at home so sales have not been dented like rival brands who rely heavily on bars and clubs that have been closed during virus lockdowns.

The luxury brand is also benefitting from the US-China trade war.

"Right now, with rising patriotism from pride in how China has so far contained Covid-19 and anger at the US from Trump's trade war, Chinese are increasingly buying domestic brands and products out of patriotism.

"This is true from sports apparel to cosmetics to alcohol," said Shaun Rein, founder of the China Market Research Group.

He added that because Chinese can't travel overseas on costly shopping trips to Europe, they are spending on domestic luxury consumption instead.

How much does it cost?

Buyers regularly spend about up to 900 yuan (£91, $127) for a bottle of Kweichow Moutai baijiu but the price can rise dramatically for rare and good vintages. Some bottles sell for up to $20,000.

Although distribution and price setting is heavily controlled by the Chinese government, many people buy bottles as speculative investments to hold onto and sell at a higher price.

And how does it taste? "The first time I tried Moutai it tasted like engine oil - fiery and burnt my throat on the way down. Now I find it smooth and enjoyable," said Mr Rein.

Kweichow Moutai still has some way to go to become the world's most valuable listed company. That title currently belongs to Saudi Aramco (Saudi Arabia Oil Company) which is valued at almost $1.9tn, according to Refinitiv.--BBC

Cirque du Soleil cuts 3,500 jobs to avoid bankruptcy

Canadian entertainment firm Cirque du Soleil is to cut 3,500 jobs after striking a deal to avoid bankruptcy.

The group, best known for its flamboyant touring circuses, said the coronavirus pandemic had forced it to cancel shows and lay off its artists.

The company will now try to restructure while shedding about 95% of its staff.

"With zero revenue since the forced closure of all of our shows due to Covid-19, the management had to act decisively," said boss Daniel Lamarre.

The firm had to pause production of all of its shows, including six in Las Vegas, back in March.

Along with its circuses, its also has musicals that tour the world including Michael Jackson One and The Beatles Love.

The firm said it had entered an agreement under which its existing shareholders will take over Cirque's liabilities and invest $300m (£244m) in the business.

Some $200m of this will take the form of a loan from the province of Quebec, where the firm is based.

It also said shareholders would set aside $20m to provide additional relief to affected employees and contractors.

It said it intended to rehire "a substantial majority" of terminated employees, business conditions allowing, once coronavirus-related shutdowns were lifted and operations could resume.

Cirque's application for bankruptcy protection will be heard on Tuesday by the Superior Court of Quebec.--BBC

BP sells petrochemicals business to Ineos in $5bn deal

BP has sold off its petrochemicals business in a move designed to help it become a lower carbon firm.

The $5bn (£4.1bn) deal with Ineos will see BP all but pull out of a sector expected to contribute to demand for oil over the coming decades.

BP boss Bernard Looney said the sale of the business, which employs 1,700 people, "will come as a surprise".

Campaign group Greenpeace UK said the sale money "must be invested in a transition to renewable energy."

BP is in the process of mapping out a major shift in direction it announced in February, when it said it planned to sharply cut carbon emissions by 2050.

Further details of how it plans to get there are expected in mid-September.

BP has also been looking at its assets to decide which ones to sell in the light of this strategy and a decline in demand amid the coronavirus pandemic.

"Strategically, the [petrochemicals] overlap with the rest of BP is limited and it would take considerable capital for us to grow these businesses," Mr Looney said in a statement.

"As we work to build a more focused, more integrated BP, we have other opportunities that are more aligned with our future direction," he added.

The business includes stakes in manufacturing plants in the UK, the US, Trinidad and Tobago, Belgium, China, Malaysia and Indonesia.

The petrochemical plants attached to BP's oil refineries in Gelsenkirchen and Mulheim in Germany will not be sold.

The International Energy Agency said in 2018 that it expected plastics and other petrochemical products to help boost global oil demand up to 2050, off-setting slower consumption of motor fuel.

However, in June BP forecast lower oil prices for decades to come as governments speed up plans to cut carbon emissions in the wake of the coronavirus crisis.

Earlier this month, it announced plans to cut 10,000 jobs after a slump in demand for oil due to Covid-19.

Asset sale

BP's petrochemicals business was smaller compared with rivals such as American oil giant Exxon Mobil or Royal Dutch Shell after it sold its Innovene division in 2005 to Ineos.

The firm, majority-owned by billionaire Sir Jim Ratcliffe, has a network of more than 180 sites in 26 countries and about 22,000 employees.

That left BP's petrochemicals business focused on aromatics, which are used in polymers for plastic bottles and packaging, and acetyles, which are used in paints, solvents and pharmaceuticals.

However, growing consumer concern about marine pollution has made those sectors a less likely long-term bet for BP as it focuses on improving its green credentials.

The sale also meant BP has hit a $15bn asset sales target one year ahead of schedule.

Progress towards the target had slowed after BP had to renegotiate terms of its sale of two oil and gas portfolios in Alaska and the North Sea in recent months.

Santander analyst Jason Kenney said that the deal is positive for BP because of the limited overlap with its other operations.

It also strengthened expectations that BP will not cut dividend payments to its shareholders, he said.

Renewables call

Environmental campaign group Greenpeace said it was vital that BP invests in renewable energy.

Mel Evans, senior oil campaigner for Greenpeace UK, said: "BP has sold its petrochemicals business to free up some cash, but it remains to be seen how BP will spend the money.

"BP's boss Bernard Looney admits we may be at peak oil demand, and our climate can't handle more burning of oil or gas. So if BP cares about our planet's future - or even its own future - this money must be invested in a transition to renewable energy."--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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Blog:            <http://www.google.com/url?q=http%3A%2F%2Fwww.bulls.co.zw%2Fblog&sa=D&sntz=1&usg=AFQjCNFoIy6F9IXAiYnSoPSgWDYsr8Sqtw> www.bulls.co.zw/blog

Twitter:         @bullsbears2010

LinkedIn:       Bulls n Bears Zimbabwe

Facebook:      <http://www.google.com/url?q=http%3A%2F%2Fwww.facebook.com%2FBullsBearsZimbabwe&sa=D&sntz=1&usg=AFQjCNGhb_A5rp4biV1dGHbgiAhUxQqBXA> www.facebook.com/BullsBearsZimbabwe

Skype:         Bulls.Bears 

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