Major International Business Headlines Brief::: 02 March 2020

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Major International Business Headlines Brief::: 02 March 2020

 


 

 


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ü  South African Airways rescue plan pushed back to end of March

ü  Northam Platinum half-year earnings more than treble

ü  Kenya Electricity Generating's H1 pretax profit rises 4.3%

ü  South Africa's credit growth in January slows to 5.01% year-on-year

ü  Kenyan shilling stable against the dollar

ü  Kenya Airways names budget subsidiary's boss as new CEO

ü  South Africa's trade balance swings to deficit in January

ü  Nigerian stocks fall to 2 months low after country records first case of
coronavirus

ü  The kids making up to $1m a year on YouTube

ü  Brexit: UK vows to seek 'hard bargain' in US trade talks

ü  Young ethnic minority workers more likely to be in unstable jobs - study

ü  Coronavirus: Italian economy takes a body blow

ü  Chinese manufacturing hits record low amid coronavirus outbreak

ü  Brexit: What to expect from UK-EU trade talks

ü  Global shares suffer worst week since financial crisis

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

South African Airways rescue plan pushed back to end of March

JOHANNESBURG (Reuters) - Specialists appointed to try to save struggling
South African Airways (SAA) have received a one-month extension until the
end of March to publish a rescue plan, they said on Friday.

 

SAA entered a form of bankruptcy protection in December, with administrators
Les Matuson and Siviwe Dongwana taking over the management of the
state-owned airline, which hasn’t made a profit since 2011.

 

“We are still in the process of finalising the steps to implement the
proposed restructuring option,” Matuson and Dongwana said in a statement,
adding that a majority of creditors had approved the extension to March 31.

 

They added that an employees’ committee, creditors’ committee and the
Department of Public Enterprises would be consulted on the draft rescue
plan.

 

SAA is among several South African state entities including power company
Eskom that are mired in financial crisis after nearly a decade of
mismanagement.

 

It has received more than 20 billion rand ($1.3 billion) in bailouts over
the last three years.

 

In the 2020 budget unveiled this week, the finance ministry set aside an
additional 16.4 billion rand over the next three years to repay SAA’s
guaranteed debt and cover debt-service costs.

 

SAA’s business rescue team said earlier this month that the airline would
scale back some of its domestic and international routes from the end of
February to conserve cash.

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

Northam Platinum half-year earnings more than treble

JOHANNESBURG (Reuters) - South Africa’s Northam Platinum on Friday reported
a three-fold increase in interim earnings, underpinned by higher metal
prices and increased sales volumes.

 

Normalised headline earning per share (HEPS), the main profit measure used
in South Africa that strips out certain one-off items, for the six months
ended Dec. 31 jumped 241% to 369.6 cents, from 108.5 cents in the year-ago
period.

 

Palladium and rhodium, widely used in vehicle exhausts to reduce harmful
emissions, have climbed as tighter environmental regulations force carmakers
to buy more of the precious metals used in catalytic converters.

 

“The operations are performing well and are expected to deliver a solid
performance for the full financial year. Project execution is on track and
the company is well-positioned to benefit from stronger PGM (platinum group
metals) prices,” said Chief Executive Officer Paul Dunne.

 

Tighter regulations helped boost profit of other South African miners such
as Impala Platinum, Sibanye-Stillwater and Anglo American Platinum after
posting years of losses.

 

Northam Platinum, which also produces palladium and rhodium, said its
earnings before interest, tax, depreciation and amortization (EBITDA) rose
to 3.193 billion rand ($209.55 million), from 1.125 billion rand a year
earlier.

 

The miner said its Zondereinde mine had experienced a fire on the eastern
side in July, which resulted in an interruption to its business with power
cuts by state-owned utility Eskom further impacting operations.

 

Half-year production surged 20% to 306,738 ounces, compared with 256,461
ounces a year earlier, Northam said, adding that it had generated
significant free cash flow of 695.8 million rand for the first time since
2015.

 

“It is expected that the group’s ability to generate free cash flow in the
foreseeable future will be positively impacted by production growth and the
continuing increase in PGM,” said Northam.

 

However, the company did not declare an interim dividend.

 

($1 = 15.2377 rand)

 

 

 

 

Kenya Electricity Generating's H1 pretax profit rises 4.3%

NAIROBI (Reuters) - The Kenya Electricity Generating Company said on Friday
its pretax profit edged up 4.3% in the first half ended December helped by
lower finance costs.

 

A tax credit of 1.89 billion shillings related to the completion of a new
power generation plant, however boosted its earnings per share by 96.8% to
1.24 shillings, the company said.

 

The East African nation’s largest electricity producer also reported results
for the full year ended June 2019, after it delayed them in November due to
a vacancy at the auditor general’s office, which audits state-controlled
firms.

 

Pretax profit and earnings per share were broadly flat in 2019, the company
said, adding that it would only declare dividend for the full year when an
auditor general is appointed and the results are reviewed.

 

The company, which is popularly known as KenGen, has been expanding its
generation capacity by digging up new geothermal steam wells to drive
electricity generation turbines in the Rift Valley area of Naivasha in
Nakuru County.

 

KenGen also announced that it had secured contracts from some geothermal
electricity development consultancies in neighbouring Ethiopia in recent
months.

 

“These initiatives are expected to have positive contribution to our future
performance,” the company said in a statement.

 

The company said pretax profit rose to 6.28 billion shillings in the half
year ended December from 6.02 billion shillings a year earlier.

 

Finance costs, which include interest on short-term borrowings, slid to 1.14
billion shillings from 1.34 billion shillings a year ago.

 

 

 

South Africa's credit growth in January slows to 5.01% year-on-year

JOHANNESBURG (Reuters) - Growth in private sector credit in South Africa in
January slowed to 5.01% year-on-year from a revised 6.12% in December,
central bank data showed on Friday.

 

Expansion in the broadly defined M3 measure of money supply quickened to
7.02% in January from a revised 6.15% in December.

 

 

 

 

Kenyan shilling stable against the dollar

NAIROBI (Reuters) - The Kenyan shilling was stable on Friday supported by
inflows from diaspora remittances and offshore investors buying government
debt amid waning end month dollar demand, traders said.

 

At 0915 GMT, commercial banks quoted the shilling at 100.90/101.10 per
dollar, the same as Thursday’s close.

 

 

 

Kenya Airways names budget subsidiary's boss as new CEO

NAIROBI (Reuters) - Kenya Airways named the head of its low-cost subsidiary
as its new chief executive on Thursday.

 

Allan Kilavuka, who had been named as acting CEO in December, was CEO of
loss-making Kenya Airways’ Jambojet subsidary. His appointment takes effect
on April 1, a company statement said.

 

 

 

South Africa's trade balance swings to deficit in January

JOHANNESBURG (Reuters) - South Africa’s trade balance swung to a deficit of
1.87 billion rand ($122.72 million) in January from a revised 13.89 billion
rand surplus in December, data from the revenue service showed on Friday.

 

Exports fell 1.4% on a month-on-month basis to 101.41 billion rand, while
imports rose by 16.1% to 103.28 billion rand, the South African Revenue
Service said.

 

($1 = 15.2377 rand)

 

 

 

Nigerian stocks fall to 2 months low after country records first case of
coronavirus

ABUJA (Reuters) - Nigerian stocks fell 1.63% to their lowest level in two
months after the West African country recorded its first case of
coronavirus.

 

An Italian man who arrived in Nigeria three days ago has become the African
country’s first case of coronavirus, the health minister said on Friday, as
infections spread rapidly worldwide.

 

 

 

The kids making up to $1m a year on YouTube

As ad rules change, child influencers are looking to convert their YouTube
status into something more.

 

"I thought we had a meeting," says Damian Camarillo, a 12-year-old
up-and-coming YouTube star, looking up at his father, Eli.

 

Mr Camarillo checks his phone. "It's at two tomorrow. They kept changing
it."

 

Damian nods and settles further into the sofa, where he is resting after
making the rounds of the New York Toy Fair, an annual industry conference
that draws some 25,000 people from around the world.

 

For decades, the event was the exclusive domain of grown-ups - toymakers,
retailers and media companies - showcasing the latest products and hunting
for the next trend.

 

But in recent years, child YouTube personalities have become some of the
biggest names in attendance.

 

The Camarillos, who started posting in 2015 and broke out after posting a
video of Damian and his cousin eating spicy chips, are established stars in
that firmament.

 

They have about one million subscribers across their channels, which show
Damian and eight-year-old brother Deion staging Nerf gun battles, racing toy
cars and riffing on Fortnite.

 

Their biggest channel, Damian and Deion in Motion, attracts roughly 13
million views per month, Mr Camarillo estimates.

 

Depending on the year, the family, which lives in Arizona, has earned
between $400,000 and $1m annually, Mr Camarillo says. Regular toy shipments
and direct sponsorships help their posts and supplement advertising income.

 

It's such big business that Mr Camarillo quit his job as an IT worker in the
healthcare industry about three years ago.

 

But the family still has some way to go before it achieves the status
enjoyed by eight-year-old Ryan Kaji, whose Ryan's World channel has more
than 24 million subscribers. His rank as YouTube's top earner has translated
into a $200m line of toys and a series on Nickelodeon.

 

"That kid makes $25m a year. Why wouldn't you want to be there?" Mr
Camarillo says. "I think that's the goal."

 

Would you let your child become a 'kid influencer'?

Social-media influencers: Incomes soar amid growing popularity

The fatigue hitting influencers as Instagram evolves

The desire to branch out comes at a critical moment.

 

Toymakers, faced with an industry-wide slump in sales, are increasingly
deepening their relationships with YouTube creators, offering sponsored
videos and licensing deals in response to their power to draw audiences and
drive sales.

 

Meanwhile, YouTubers are grappling with a plunge in income from ads, after
the platform overhauled its advertising policies for children's channels to
comply with regulatory concerns about privacy.

 

Rule change

For the Camarillos, the changes - which include limits on targeted ads and
an end to comments - meant an instant drop in ad revenue of about 50%.

 

"We prepared for it. We knew it was coming," Mr Camarillo says. Still, it
took some adjustment. When the changes were announced, the family had just
bought a house.

 

On top of the financial strain, some warn that YouTube's new rules may make
it harder for new voices to emerge.

 

The US is currently reviewing changes to the children's online privacy act.

 

But even as stricter rules for children's ads and social media marketing
grow more likely, many in the industry say they doubt it will dent the
growth of online influencers.

 

Globally, firms are expected to spend almost $10bn on "influencer marketing"
this year, up from $6.5bn in 2019, according to industry estimates.

 

In the toy industry, social media influencers now attract almost as much
advertising spending as traditional television, says Juli Lennett of
research firm NPD Group. For some firms, it can be far more.

 

"YouTube - it's a fact of life," she says. "You kind of need to be where the
kids are."

 

Industry expansion

About 40% of children aged 14 and under watch YouTube or YouTube kids at
least weekly. More than 60% in that age range have bought something they saw
in a video, according to a survey conducted last year by the NPD Group for
the US Toy Association.

 

Brian Bonnett is chief executive of Bonkers Toys, which holds the license
for Ryan's toys and is working with several other families on toy lines.

 

While many in the toy industry see the platform and its creators primarily
as a vehicle for advertising, he says he expects that to change in coming
years.

 

"It's inevitable," he says. "Everybody has a YouTuber."

 

This year's Toy Fair drew 100 YouTube channel owners this year, up from 90
in 2019, several of whom are represented by Hollywood agents.

 

Viewers don't seem to mind the increased commercialism, says Lucy Maxwell, a
former teacher whose family started its Tic Tac Toy channel as a hobby. They
now have about 3.5 million subscribers for its videos, many of which are
sponsored, and licensed a line of XOXO toys.

 

The Maxwells - Jason, Lucy, nine-year-old Addy and seven-year-old Maya - are
now looking to move beyond the toy industry into other kinds of businesses,
such as publishing, apparel and home decor.

 

"I really think we're only on the cusp of what you're seeing as influencer
marketing right now," says Jason, who used to work in the financial
industry. "I think it's going to be a lot bigger and this is just inning
number one."

 

The Camarillos have about a dozen meetings lined up at this year's Toy Fair,
their third.

 

As they walk the aisles, more emerge spontaneously, as toy reps spot the
children's yellow "creator" badges and invite them to try out the latest
bouncy balls and hula hoops.

 

Damian says his schoolmates say he is "famous, but I'm not really". His goal
is to hit one million subscribers on a single channel.

 

"I feel like a big YouTuber, but we're still kind of small," he says. "We're
getting there."--BBC

 

 

 

Brexit: UK vows to seek 'hard bargain' in US trade talks

Boris Johnson has promised to "drive a hard bargain" as he set out the UK's
negotiating position for a post-Brexit free trade deal with the US.

 

The government said a deal would boost the UK economy by £3.4bn and
particularly benefit Scotland, England's north-east and the Midlands.

 

It pledged to maintain high food standards and said the NHS would not be for
sale.

 

But a union leader has warned against the UK "cosying up to Donald Trump".

 

It comes as UK-EU talks aimed at reaching a trade agreement formally kick
off on Monday in Brussels.

 

The talks on a free trade agreement with the US are expected to begin later
this month.

 

The discussions will take place in both the UK and US and be overseen by the
government's chief negotiation adviser Crawford Falconer - formerly New
Zealand's chief negotiator and ambassador to the World Trade Organization.

 

'Salmon for Stetsons'

A government statement said manufacturers of ceramics, cars, food and drink
would be "the biggest winners" from a deal, along with the professional
services, including architects and lawyers.

 

In what appears to be a bid to push back against accusations made by Labour
during the election that the health service would be up for sale under the
Conservatives, the government also said any future deal "must protect our
NHS".

 

"We're going to drive a hard bargain to boost British industry," said Mr
Johnson.

 

"Trading Scottish smoked salmon for Stetson hats, we will deliver lower
prices and more choice for our shoppers."

 

International Trade Secretary Liz Truss said: "This deal with our biggest
single trading partner will cut red tape for our small businesses, cut
tariffs for our great products from dairy to cars and increase growth in all
four nations."

 

Confederation of British Industries director general Carolyn Fairbairn said
it was "encouraging to see the government's ambitions to make it easier for
skilled people to move between the UK and US" and "support small business
exporters".

 

However, Frances O'Grady, general secretary of the Trade Unions Congress,
said: "The government should be focused on getting a good trade deal with
the EU - not cosying up to Donald Trump."

 

She said a bad trade deal with the US would "put working people's jobs and
rights on the line... and it will undermine our vital public services,
environment and food standards".

 

Ms O'Grady referred to fears from farming leaders that an agreement could
see the import of food that would be illegal to produce in the UK, such as
chlorinated chicken.

 

According to recent media reports, the EU will demand that the UK maintains
a ban on washing chicken in chlorine and other disinfectants as the price
for a trade agreement with the bloc. But the US has expressed frustration at
the ban, arguing that it is not based on scientific evidence.

 

Shadow international trade secretary Barry Gardiner accused the government
of making "false promises" over commitments to protect the NHS and consumer
standards, adding "there must be a full and proper scrutiny process for this
and all trade agreements".

 

Round one

The US is the UK's largest trading partner after the EU, accounting for
nearly 19% of all exports in 2018 and 11% of imports. The EU accounted for
45% of all exports and 53% of imports.

 

The talks starting in Brussels on Monday will be led by David Frost on the
UK side and Michel Barnier for the EU.

 

Potential flashpoints could include the UK's wish to diverge from EU
employment and environmental standards in future, its ruling out of any role
for the European Court of Justice, and the level of EU access to UK fishing
waters.

 

How do you negotiate a trade agreement?

What does the UK sell to the rest of the world?

The UK has signalled that it could walk away from trade talks in June unless
there is a "broad outline" of a deal.

 

French Europe Minister Amelie De Montchalin told the BBC that the EU was
prepared to abort a post-Brexit deal if European fishermen were denied
access to British waters.

 

Details of what will be discussed and when have been published, with topics
to be covered in the first round of negotiations including trade in goods
and services, transport, energy, fisheries and "fair and open competition"
in future dealings.

 

Further rounds of negotiations will take place every two to three weeks,
alternating between London and Brussels.

 

Liberal Democrat acting leader Sir Ed Davey has called on the prime minister
to pause trade talks with the EU and extend the Brexit transition period in
order to focus on dealing with the coronavirus.--BBC

 

 

 

Young ethnic minority workers more likely to be in unstable jobs - study

Young people from Black, Asian and other minority ethnic backgrounds are at
greater risk of being in unstable employment, according to research.

 

The group is 47% more likely to to be on a zero-hours contract, a study
said.

 

A report from the Carnegie Trust, University College London's Centre for
Longitudinal Studies and Operation Black Vote says the group is 4% less
likely to have a permanent job.

 

The researchers compared the experiences of 25-year-olds in England.

 

It included people who are white, as well mixed-race, Indian, Pakistani,
Bangladeshi, Black African and Caribbean, and other minority ethnicities,
sometimes collectively known as BAME workers.

 

The report follows research that about a third of FTSE 100 firms have no
ethnic minority board members.

 

'Precarious work'

The study also found that such unsecure work could be linked to mental ill
health.

 

Douglas White from Carnegie UK Trust said: "Good work can have a really
positive impact on people's wellbeing - but we need to tackle the
inequalities in who has access to good quality jobs.

 

"This report highlights that young people from BAME communities are
particularly likely to enter into precarious forms of work. We need policy
and practice to recognise and respond to this to ensure that good work is
available to all."

 

The report suggests that employers should carry out internal audits of pay,
employment terms and promotions when it comes to race.

 

It also suggests government action on the gap in pay BAME workers suffer.

 

'Race penalty'

The work draws upon UCL's Next Steps study, which follows the lives of
around 16,000 people in England born in 1989-90.

 

"This report must be a serious wake up call for the government, industry and
our mental health practitioners," said Lord Simon Woolley of Operation Black
Vote.

 

"The race penalty in the work space is further exacerbated by mental health
issues. It's a double hit if you're from a BAME community. We can, however,
turn this around, but we need collective leadership."

 

The report found that experiences in the job market varied for different
ethnic groups. For instance, British Pakistani millennials were more likely
to be on a zero-hours contract than their white counterparts. But British
Indian and British Black Caribbean workers were not.

 

UCL's Morag Henderson, a senior research officer at the university, said
more research was needed to understand these differences.

 

Earlier this month, the Parker Review Committee found 31 of 83 FTSE 100
companies have no ethnic minority representation on their boards.

 

It found even lower representation at board level across FTSE 250 companies,
where 119 out of 173 had no ethnic diversity.--BBC

 

 

 

Coronavirus: Italian economy takes a body blow

Italy was the first European country to report a major surge in cases of the
coronavirus, with numbers quickly climbing into the hundreds.

 

The authorities have responded with travel restrictions in the north of the
country that are bound to hit the economy.

 

So far, a number of towns in Lombardy in northern Italy have been locked
down, with very limited numbers of people being allowed in or out.

 

That matters, because northern Italy is the country's industrial powerhouse.
Lombardy alone accounts for 40% of Italian industrial output. Milan is
Italy's key centre for finance and a range of other services.

 

Milan is not one of the areas covered by the shutdown. But even so, major
tourist and cultural sites such as the cathedral (the Duomo) and the opera
house La Scala have been closed.

 

Milan is also one of the world's major fashion centres. Fashion Week in late
February did survive - after a fashion, as it were - but it was affected.
For instance, Giorgio Armani's collection was shown without an audience.

 

Had the coronavirus arrived a few weeks earlier, it seems likely there would
have been much more disruption to this major event in Milan's calendar.

 

There is some debate about whether the response in Lombardy has been too
aggressive. But it is certainly true that public perceptions, well founded
or not, translate into decisions about whether to travel or go out that have
a real impact on businesses.

 

Persistent problem

Italy has struggled with persistently slow growth for many years. So could
this health crisis be the factor that tips the country into another
recession?

 

By any measure, the Italian economy is in a bad way.

 

In 2019, total production of goods and services was approximately the same
as it was 15 years earlier. What's more, it was still 4% below the level it
reached in 2007, just before the financial crisis.

 

Unemployment is also a persistent problem, especially among young people.
The unemployment rate among under-25s is 28.9%, with only Spain and Greece
having higher figures in the EU.

 

In the last two years, Italy has also had to contend with weaker global
growth and a slowdown in international trade. In the final quarter of last
year, GDP fell by 0.3%.

 

Prof Roberto Perotti of Bocconi University in Milan says more of the same is
now in prospect:

 

"GDP will almost certainly shrink this quarter as well, so Italy will
technically be in a recession [often defined as two consecutive quarters of
declining GDP]. It will probably shrink for the whole year," he says.

 

Tourism woes

It is true that even without the virus, another contraction in the current
quarter would have been a distinct possibility. But the odds have
strengthened now that economic activity will be hit by the health crisis.

 

How severe it will be for Italy obviously depends on the unknowable (at this
stage) course of the disease.

 

How it affects tourism will be an important factor. This is not the main
season, apart from skiing in the mountains. The areas affected so far are
not the main tourist areas. But as the summer approaches and if the virus
spreads to other areas of Italy, that could change.

 

Already some flights to northern Italy have been cancelled. EasyJet, for
example, said it was a response to "softening demand" - in other words,
people choosing not to go there.

 

Prof Perotti thinks that tourist numbers will go to almost zero in the near
future. And even if the virus problem goes away by the summer, the industry
won't quickly get back to normal. "Tourism," he says, "has a long memory."

 

He thinks the overall impact on Italy will depend to a large extent on how
the big economies react, notably the US and Germany.

 

The message from Prime Minister Giuseppe Conte is: "It's time to stop the
panic." He has called on the national broadcaster to tone down its coverage.

 

Financial squeeze

One consequence of Italy's protracted sluggishness has been stretched
government finances. Its government debt is equivalent to 133% of GDP.

 

In the EU, only Greece exceeds that figure. EU rules for the government
finances set a target of 60% or less. Several other countries are above that
threshold, but Greece and Italy stand out. So Italy could really do without
additional stress on its government finances.

 

Prof Perotti thinks the virus could aggravate that problem: "The direct cost
of the health intervention, I don't think is huge. Now if there is a big
recession, the lost revenue from that will be a big issue."

 

Weaker economic activity will mean less tax revenue. Prof Perotti thinks the
government will use it as an excuse to get more leeway in the continuing
discussions that Italy is having with the European Commission about getting
its finances into line with the rules.

 

But Italy probably can't expect very much help from monetary policy, which
is in the hands of the European Central Bank. Interest rates are already
very low: one of the ECB's main rates is below zero. In any event, Prof
Perotti thinks it will only act if "things get very ugly for the whole of
the eurozone".

 

At the moment, Italy looks like the economy most exposed to the consequences
of the new coronavirus and one with many other pre-existing challenges. But
if the spread continues, then Italy might not look like such a special case
for long.--BBC

 

 

 

Chinese manufacturing hits record low amid coronavirus outbreak

Factory activity in China fell at a record rate in February, as
manufacturers closed their operations to contain the spread of coronavirus.

 

The country's official measure of manufacturing activity - the Purchasing
Manager's Index (PMI) - dropped to 35.7 from 50 in January.

 

It shows the virus is having a bigger impact than the financial crisis that
shook the world last decade.

 

The data also suggests that factories are struggling to find enough workers.

 

PMI figures - calculated with data from monthly surveys of private sector
companies - are a key indicator of a county's economic health, and can move
financial markets.

 

China makes up a third of world manufacturing and is the world's largest
exporter, so this PMI drop - well below analysts' expectations - will have a
knock-on effect on other countries.

 

US markets suffer worst week since 2008's global financial crisis

Why should I care if share prices fall?

Restrictions in place in the so-called "factory of the world" have also
affected companies such as Apple, Diageo, Jaguar Land Rover and Volkswagen,
which rely on China's production and consumer market.

 

The big question now is how quickly factories can return to normal.

 

Many are dependent on China's 300 million migrant workers, a third of whom
are still not working because of quarantine rules.

 

According to Bloomberg Economics, Chinese factories were operating at 60% to
70% of capacity this week.

 

It is expected that China's economic growth will take a significant hit in
the first half of this year because of the impact coronavirus has had on
business and spending in the country.

 

Stock markets around the world fell dramatically this week after a surge in
the number of companies warning about the impact of the outbreak on firms.

 

There was one silver lining to the fall in Chinese output though: Nasa said
pollution monitoring satellites had detected significant decreases in
nitrogen dioxide over the country, which evidence suggests is "at least
partly" related to the economic slowdown caused by the outbreak.--BBC

 

 

 

Brexit: What to expect from UK-EU trade talks

So this is it. After three messy years negotiating the UK's exit from the
EU, Monday is the day that trade talks finally begin between the two sides.

 

David Frost, the UK's chief negotiator, arrives in Brussels in the
afternoon, armed with 100 advisers and civil servants, preparing to spread
themselves across 10 working groups, focusing on everything from fishing to
financial services to truck drivers' cross-border access.

 

Negotiations are to take place once every two or three weeks from now until
the summer at least, alternating between Brussels and London - with the
prime minister insisting a deal must be struck by the year's end.

 

On the edge of your seat with excitement, are you?

 

Thought not. But should you be?

 

UK prepared to ditch EU trade talks in June

Trade talks: What do the UK and EU want?

Brexit: What is a level playing field?

OK, even trade buffs admit their area of expertise can be pretty dry and
detail-heavy. And it would certainly suit the government if we all looked
the other way during these negotiations because trade deals generally
include trade-offs. On both sides.

 

Neither Boris Johnson, nor his predecessor, Theresa May, have been wholly
transparent about this with the UK public.

 

So surely it is of interest to those who voted for Brexit, to keep a keen
eye on whether the benefits they've been led to believe will be coming the
UK's way for farmers, fishermen and slashing immigration numbers, will now
materialise in the way they'd imagined.

 

And what do both sides - the EU and Boris Johnson's government - want from a
trade deal?

 

Very different things. Which puts negotiations on to a tricky footing from
the off.

 

The EU is after an overarching agreement, covering all aspects of future
relations: foreign policy, security co-operation, fish, trade, services,
research and development and more. All disputes would be referred to a
single arbitration panel. The (Brexiteer-despised) European Court of
Justice, the ECJ, would have the final word on aspects touching EU law.

 

The UK government rejects that idea. The whole point of Brexit, ministers
argue, was to reclaim national sovereignty and escape the ECJ.

 

Boris Johnson wants a free trade deal (similar to the one the EU struck with
Canada) with extra agreements (like fishing) on the side, governed by
separate dispute resolution mechanisms.

 

The UK aim here is to avoid "linkage" - where the EU could say, for example:
"We won't give you a tariff and quota-free trade deal unless you allow EU
fishermen to keep the same access to UK waters as they had before Brexit".

 

Another big pre-negotiations row has been over the issue of level playing
fields. This is where the EU is pressuring the UK to maintain the same or
similar standards when it comes to environmental, labour and state aid
regulations. Otherwise, European businesses worry that the UK, which already
has access to customers across the single market after more than four
decades as an EU member, could slash its regulations, undercutting their
European competitors with considerably lower prices.

 

The government grumbles that the EU should have more faith: that the UK has
no intention of slashing regulations but that, in any case, the UK didn't go
to all the trouble of Brexiting in order to re-tether itself to EU rules.

 

Those same glaring misunderstandings or miscalculations of the other side,
that we became so familiar with in the Brexit negotiations, are back with a
vengeance now EU-UK talk turns to trade.

 

UK chief negotiator David Frost believes the EU still doesn't "get it".

 

While Theresa May aimed to keep trade as friction-free as possible with the
EU after Brexit - in the interest of cross-border business - even though she
knew this would mean still adhering to a number of EU regulations, Boris
Johnson seems content to countenance the cost, paperwork and delays the UK
could incur on exports and imports, in order to break free from Brussels'
rules once and for all.

 

And Mr Frost is right. Many in the EU do think the PM is bluffing. They
believe, at the last minute, that Mr Johnson will probably balk at the
prospect of negative press being generated by huge lorry queues backing up
at Dover and Calais and that he will then agree to match EU regulations in
some way.

 

As evidence, Brussels cites Boris Johnson's "capitulation" in the autumn,
when he agreed to something he had sworn he could never accept: a border
down the Irish Sea - in order to finally get a Brexit divorce deal signed.

 

Some cabinet ministers seem now to be questioning that commitment to having
border checks in the Irish Sea, feeding growing EU distrust in the UK
government..

 

Overall, Mr Johnson's pro-Brexit cabinet believes the EU woefully
underestimates their resolve, while Brussels scoffs at Downing Street
assertions that the EU needs a trade deal with the UK more than the other
way round.

 

"I really can't believe that we're back to hearing government ministers
speaking again about mythical German car manufacturers, supposedly
pressurising Berlin to do a good deal with the UK," a high level EU figure
told me: "The same car manufacturers who never pressurised Angela Merkel
during the Brexit process and who won't be saying anything now. Why? Because
they, as all of the EU, care more about and earn more money from the single
market as a whole, than we do from trade with the UK alone. London still
hasn't understood that somehow."

 

A certain amount of shadow boxing, even chest beating is to be expected
ahead of tough trade negotiations. Normally, though, both sides then need a
bit of time to allow temperatures to cool before constructive talks can
begin.

 

But the Johnson-imposed end of year deadline means there's little time to
waste. He's attempted to ratchet up the pressure on the EU even further by
threatening to abandon negotiations as early as the summer if they don't
appear be going his way.

 

"But (chief EU trade negotiator) Michel Barnier is cool about all this," a
diplomat from an influential member state told me. "He's been round the
block a few times by now. He knows it's in the interest of the EU and the UK
to strike some sort of deal, however limited, by the end of the year. As we
saw with Brexit talks, sudden progress can be made when you least expect it,
even last minute. Maybe we won't know what shape this trade deal will take
until the autumn."

 

In the meantime, Boris Johnson is keen to kick-off trade talks with the US -
though they too promise to be far from straightforward.

 

Here again, the Johnson priority appears to be speed over content. To get
something - however thin an agreement - signed with the US and the EU by the
end of the year in order to be able to say to voters: "I did it".

 

Question is: How closely will you be scrutinising the process?--BBC

 

 

Global shares suffer worst week since financial crisis

US markets have suffered their worst week since the global financial crisis
of 2008, as fears over the impact of the coronavirus continued to grip
investors.

 

The three main US indexes ended the week down 10% or more from last Friday,
despite a last-minute rally in prices.

 

Earlier, the main European markets fell sharply, with London's FTSE 100
index down 3.2% for the day.

 

Investors are worried the coronavirus could spark a global recession.

 

The Dow settled 1.4% lower on Friday, recovering from earlier lows, while
the S&P sank 0.8% and the Nasdaq was roughly flat.

 

Amid the sell-off, Federal Reserve chair Jerome Powell put out an unusual
statement, saying the US central bank was "closely monitoring" developments.

 

"The fundamentals of the US economy remain strong. However, the coronavirus
poses evolving risks to economic activity," he said. "We will use our tools
and act as appropriate to support the economy."

 

Why should I care if share prices fall?

The news of more coronavirus cases, notably in Italy, has raised concerns of
a much larger economic effect than previously expected.

 

Bank of England Governor Mark Carney on Friday warned the outbreak could
lead to a downgrade of the UK's growth prospects.

 

Other countries are also reassessing their economic forecasts, as hundreds
of firms warn of disruptions to their supply chains and a decline in
consumer demand.

 

US tech giants Apple and Microsoft are among the companies that have said
their business will be affected, while investment bank Goldman Sachs warned
on Thursday that the coronavirus is likely to wipe out any growth in US
company profits this year.

 

Shares in airlines have been especially hard-hit as travel bans are imposed
and companies limit staff travel. On Friday, airline group IAG - which owns
British Airways and Iberia - said its earnings had been affected by "weaker
demand" as a result of the outbreak.

 

More anxiety ahead

"A known unknown" is how one major company boss described the economic
fallout of coronavirus to the BBC.

 

But what the markets have woken up to - perhaps belatedly - is that the
disruption to the economic activity from coronavirus is wider, deeper and
perhaps longer lasting than previously assumed.

 

As major outbreaks spring up outside China, it is clear that it is not just
global supply chains but also demand from consumers that's suffering, as
efforts to contain the virus keep them away from shops, bars and
restaurants.

 

What is unknown is exactly how bad and how lasting the impact could be. But
what is known is that this comes at an already tricky time for the global
economy with Japan, Italy, China and the UK among those already seeing
growth faltering.

 

As economists slash their growth forecasts, policymakers are debating how
much they can do to help, given how low interest rates remain. What's
entirely clear is that investors face more anxiety ahead.

 

Mayank Mishra, a strategist at Standard Chartered Bank, said: "Previously
the market had taken some comfort in the falling infection rates in China as
a result of containment measures put in place earlier.

 

"But the spread of the coronavirus infection outside China, with clusters
emerging in South Korea, Italy and Japan, has increased concerns
significantly."

 

BA owner and EasyJet hit by coronavirus

Dettol sales surge amid coronavirus fears

Coronavirus outbreak at ‘decisive point’

In Europe, Germany's Dax index fell 4.2%, while France's Cac 40 index sank
3.9%.

 

Earlier on Friday, in Asia, Japan's Nikkei 225 index dropped 3.7%, bringing
its fall for the week to more than 9%. China's Shanghai Composite index also
fell 3.7% on Friday.

 

Traders fled to less risky investments, such as government debt, sending
bond yields to new lows. Meanwhile, oil prices also fell on fears the virus
would hurt demand, with Brent prices dropping more than 3% to about $50 a
barrel on Friday, the lowest level for more than a year.

 

US President Donald Trump, who has claimed credit for a sharp rise in share
prices during his tenure, blamed the falls on investor fear of "the unknown"
- as well as concerns about the Democratic candidates hoping to challenge
him in November's presidential election.

 

"People look at it and they say how long will this last," he said. "It's an
election ... I don't think that's helping."

 

Several key global market indexes - including the FTSE 100 and the Dow Jones
- have fallen more than 10% from recent highs. A drop of that magnitude is
generally referred to as a correction.

 

However, share prices were hovering at record levels before the sell-off
started, noted Sonja Laud, chief investment officer at Legal & General
Investment Management.

 

Will the Fed cut interest rates?

The Dow and S&P 500 have now retreated roughly to where they were in August,
while the Nasdaq has returned to December prices.

 

"What markets are trying to digest is how long this is going to go on and
what the economic damage will be," she said.

 

Many analysts now predict the US central bank will cut interest rates in an
attempt to counter any impact. James Bullard, who sits on the Fed's board of
governors, said Friday that cuts are "a possibility" should the virus
continue to spread, but he warned that market expectations would not force
the bank to act.

 

Ms Laud said that many central banks had little room for manoeuvre, because
rates are already so low.

 

"Realistically it's mostly the Fed and to some extent the Bank of England
that still have the chance to cut rates," she told the BBC.

 

"I think there will be a huge focus on governments to step up fiscal
stimulus under the assumption there is not a lot more that central banks can
do to stimulate the economy."--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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