Major International Business Headlines Brief::: 13 March 2020

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Major International Business Headlines Brief::: 13 March 2020

 


 

 


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ü  South Africa's Sasol set for worst week yet as oil crash speeds investor
flight

ü  South Africa's Eskom says 4,000 MW power cuts to last until Friday

ü  Sasol considers rights issue, further asset sales after share plunge

ü  South Africa's rand hammered by growing impact of coronavirus

ü  Shell reports 41% rise in onshore Nigeria oil spills due to sabotage

ü  Revision to GDP methodology gives boost to Ivory Coast's reported economy

ü  South Africa rates to fall a modest 25 bps on March 19

ü  Tullow Oil future in doubt if oil drop thwarts planned asset sales

ü  S.Africa's Sanlam FY earnings fall 19%, in line with expectations

ü  Nigerian stocks fall to new four-year low

ü  Coronavirus: FTSE 100, Dow, S&P 500 in worst day since 1987

ü  Coronavirus 'could cost millions of tourism jobs'

ü  Is this the digital future for Bank of England banknotes?

ü  Coal power developers 'risk wasting billions'

ü  Gambling firm Betway hit with record £11.6m penalty

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


South Africa's Sasol set for worst week yet as oil crash speeds investor
flight

JOHANNESBURG (Reuters) - An oil price crash has wiped 79 billion Rand ($4.8
billion) off the market value of South African petrochemicals group Sasol,
adding to the government’s difficulties in shoring up business confidence as
giant state-backed companies flounder.

 

Sasol shares hit a 21-year low on Thursday - falling 42% by 1400 GMT and
bringing losses this week to 80% - as oil prices plunged.[O/R]

 

Barring a significant recovery, this will be Sasol’s worst week since
listing in September 1989.

 

The destruction of value at one of South Africa’s biggest companies is
another problem for a government grappling with a heavily-indebted state
power company and airline.

 

Sasol is not a state-run company, but its top two shareholders are state
agencies, which jointly hold a nearly quarter share.

 

The top shareholder, state asset manager the Public Investment Corporation
has, a 15.05% stake, while local development finance institution Industrial
Development Corporation holds 8.53%, according to Refinitiv Eikon.

 

Stocks with exposure to oil markets dived everywhere on Monday as crude
prices suffered their biggest daily sell-off since the 1991 Gulf War,
dropping 25% after top producers Saudi Arabia and Russia began a price war
that threatened to leave oil markets overwhelmed with supply.

 

Sasol shares were already fragile after the company reported late last month
that half-year profits plunged because of problems at its Lake Charles
Chemicals project (LCCP), an ethane cracker project in Louisiana.

 

The U.S. facility is costing billions of dollars more than initial
estimates.

 

The oil price crash added momentum to the selling as investors grew
concerned about the company’s debt burden. Oil prices slid another 5% on
Thursday.

 

“If this environment persists for an extended period of time, it is likely
that Sasol will need to both raise new equity and accelerate its asset sales
programme to repay debt,” Prudential, the fourth biggest shareholder, wrote
in a market comment dated March 9.

 

A Sasol spokesman did not immediately respond to Reuters’ request for
comment.

 

Sasol, which is the world’s biggest maker of motor fuel from coal, said in
Februrary that its gearing - net debt to EBITDA - stood at 2.9 times, below
the maximum of 3.5 times allowed under its bank covenants.

 

“With the oil price collapsing, it’s eroded the margin they were expecting
on the [LCCP] project,” said an investor who sold his Sasol shares on
Monday.

 

Shares in the company were last trading at 30.9 Rand - a 95% decline from
their level just 18 months ago.

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

South Africa's Eskom says 4,000 MW power cuts to last until Friday

JOHANNESBURG (Reuters) - South African state power firm Eskom said on
Thursday that power cuts of up to 4,000 megawatts (MW) would last until
Friday, as it was waiting for regulatory approval to reconnect a unit at
nuclear power station Koeberg.

 

Earlier it had said cuts could last until further notice.

 

Eskom, which produces more than 90% of the electricity in Africa’s most
industrialised economy, ramped up power cuts to 4,000 MW on Tuesday after a
fault with a pump at Koeberg, the country’s only nuclear station.

 

That compounded breakdowns at the company’s coal fleet, which accounts for
the bulk of its 44,000 MW nominal capacity.

 

Eskom has repeatedly implemented nationwide power cuts in the past year that
have dented economic growth and hurt business sentiment.

 

Manufacturing data later on Thursday is expected to reflect the impact of
the power outages.

 

Eskom hopes to bring Koeberg Unit 1 back to service by Sunday, which should
reduce the scale of the outages.

 

 

 

Sasol considers rights issue, further asset sales after share plunge

JOHANNESBURG (Reuters) - South African petrochemicals group Sasol said on
Thursday it would consider an equity issue and expand asset disposals in
excess of the current target amid concerns around its debt after a crash in
the oil price wiped 79 billion Rand ($4.8 billion) off the market value.

 

Sasol shares hit a 21-year low on Thursday - falling 42% by 1400 GMT and
bringing losses this week to 80% - as oil prices plunged.

 

 

 

 

South Africa's rand hammered by growing impact of coronavirus

JOHANNESBURG (Reuters) - South Africa’s rand weakened sharply on Thursday
along with other emerging market currencies as concerns over the economic
impact of the coronavirus intensified after the World Health Organization
(WHO) declared the outbreak a pandemic.

 

U.S. President Donald Trump’s surprise decision to ban travel from Europe to
reduce the impact of the virus added more pressure to trading, as
disruptions to trade and the world economy emerged.

 

At 0645 GMT the rand was 1.12% weaker at 16.3850, tumbling overnight in
frantic selling across a score of financial assets.

 

The WHO described the outbreak as a pandemic for the first time on
Wednesday, though an official said the move does not change the agency’s
response.

 

Trump announced on Wednesday the United States will suspend all travel from
Europe, except from the United Kingdom, to the United States for 30 days
starting on Friday.

 

However, Trump said trade will not be affected by the restrictions.

 

Bonds also suffered, with the yield on the benchmark 2030 government issue
rising 14.5 basis points to 9.415%.

 

 

 

Shell reports 41% rise in onshore Nigeria oil spills due to sabotage

LONDON (Reuters) - Royal Dutch Shell’s onshore Nigeria subsidiary saw a 41%
rise in the number of crude oil spills due to theft or pipeline sabotage in
2019, the group said in its annual report.

 

Shell Petroleum Development Company of Nigeria (SPDC) also recorded a rise
in the volume of oil spilt in the Niger Delta as a result of illegal
activity to 2,000 tonnes in 2019 from 1,600 tonnes a year earlier.

 

Of a total 164 SPDC spills of more than 100 kilograms in the delta, 157 were
due to theft and sabotage, Shell said. That compared with 111 spills due to
sabotage in 2018.

 

SPDC is a joint venture of the Nigerian National Petroleum Corporation
(NNPC), which holds a 55% stake, Shell, its operator, with 30%, France’s
Total with 10% and Italy’s Eni with 5%.

 

It produces around 1 million barrels of oil per day and operates more than
6,000 kilometres of pipelines in the delta.

 

 

 

 

Revision to GDP methodology gives boost to Ivory Coast's reported economy

ABIDJAN (Reuters) - Ivory Coast has revised how it calculates its gross
domestic product, a move that resulted in a big jump in the reported size of
its economy.

 

The new methodology for determining GDP, which includes changing the base
year for its calculation from 1996 to 2015, was approved in a cabinet
meeting on Wednesday.

 

“The economy has changed, we have new industries, new activities,” said
Gabriel N’Guessan, head of the national statistics office. “We’re not at war
anymore for example.”

 

The economy has been one of the world’s fastest growing since peace returned
after civil wars in 2002 and 2010-2011.

 

The new calculation boosted reported 2015 GDP by nearly 40% to more than 27
trillion CFA francs ($47 billion) from 19.6 trillion CFA francs under the
old calculation.

 

While the government did not give more recent updated figures, it confirmed
average growth of around 7% between 2015 and 2018.

 

In recent years regional countries Ghana, Nigeria and Senegal have also
rebased their GDP figures, leading to similar increases in measured economic
output.

 

($1 = 576.7500 CFA francs)

 

 

 

 

South Africa rates to fall a modest 25 bps on March 19

JOHANNESBURG (Reuters) - South Africa’s central bank will cut rates by 25
basis points next week to lift the economy out of recession, easing less
aggressively than other global central banks trying to mitigate damage from
the coronavirus outbreak, a Reuters poll forecast.

 

On Wednesday, the Bank of England followed the United States Federal
Reserve’s surprise 50 basis point rate cut the previous week, and several
central banks, such as the Reserve Bank of Australia and the Bank of Canada,
have also cut rates recently.

 

In a March 6-11 Reuters poll, 12 economists said the South African Reserve
Bank (SARB) would cut its repo rate by 25 basis points to 6.0% on March 19,
while five said it would deliver a 50 basis point cut. The other four said
it would keep rates on hold.

 

Economists responding to an extra question gave a median 65% probability the
SARB would cut this month. Median rate forecasts showed the repo rate
falling to 5.75% in the second quarter and finishing the year at that level.

 

“The SARB has nothing to lose: inflation is slowing, the economy is back in
recession, it is amongst the two most vulnerable EMEA economies to
coronavirus, and the Fed is giving it some leeway,” said Francesca Beausang,
senior economist at Continuum Economics.

 

So far, the reported rate of coronavirus infection appears to be very slow
in South Africa compared with other parts of the world.

 

GROWTH PROSPECTS TRIMMED

The poll suggested inflation would average 4.2% this year, 0.2 percentage
points slower than in last month’s survey and compared with the last
reported rate of 4.5%.

 

South Africa’s statistics agency confirmed the economy entered its second
recession in two years late last year as agriculture, transport and
construction activity contracted, with an unreliable power supply the main
impediment to growth.

 

Growth prospects were trimmed markedly by 0.5 percentage points to 0.3% for
this year and by 0.1 percentage point to 1.2% for next year, compared with
last month’s poll.

 

“The SARB will have to cut its inflation and growth forecasts notably at
this meeting and with oil price at mid-30s ($ per barrel) and global
interest rates declining, they have room to add stimulus,” said Elize
Kruger, an independent economist.

 

South Africa’s central bank rescued its economy from the 2008-09 global
financial crisis by cutting interest rates a cumulative 700 basis points
through to 2012. But the SARB has not cut in increments larger than 25 basis
points since then.

 

The economy contracted in nine quarters since 2014, triggered by fractured
relations between labour and business in its crucial mining sector, mainly
in the platinum belt.

 

Electricity power constraints have weighed on growth and, although inflation
has moderated, stimulus has been limited to four 25 basis point cuts in the
past three years.

 

“South Africa’s forward rate agreements curve is currently factoring in
close to 50 basis points of cuts in the repo rate for this year,” said
Investec Chief Economist Annabel Bishop.

 

“South Africa may see a 25 basis point cut in its rates as early as this
month. With Moody’s credit rating agency warning that South Africa’s
monetary policy remains tight, the repo rate is close to its current cycle
high,” she added.

 

 

 

Tullow Oil future in doubt if oil drop thwarts planned asset sales

LONDON (Reuters) - Tullow Oil said on Thursday the oil price fall may
jeopardise a planned $1 billion in asset sales needed to refill its coffers,
raising the risk the group’s lenders may become reluctant to approve loans
essential to shoring up its future.

 

The Africa-focused company said it expects its free cash flow to slide to
$50 million-$75 million this year at an oil price of $50 a barrel, but hopes
to raise cash from the asset sales.

 

Free cash flow at the group had already fallen last year to $355 million
from $411 million in 2018. Highly-indebted Tullow expects to break even at
prices of $45 a barrel.

 

Brent crude was trading just below $34 a barrel early on Thursday, down from
January highs above $70.

 

Tullow shares were down around 21.6% at 14.2 pence at 1309 GMT, while an
index of European oil and gas companies was around 7.5% lower.

 

The company said the oil price slide might thwart the asset sales and could
in turn have the effect of stopping its lenders from approving semi-annual
reserve-based loans or amendments to its debt covenants if required.

 

“Therefore, we have concluded that there is a material uncertainty that may
cast significant doubt that the group will be able to operate as a going
concern,” it said in a statement.

 

Tullow said it expected its debt facility to be confirmed this month at $1.9
billion, of which it can still tap $700 million.

 

It said it would cut its investment budget by about a third to $350 million
this year and reduce its exploration spending, historically the group’s
focus, by almost half to $75 million. That will be weighted towards its
fields in Ghana.

 

The company also said it has drawn up a final shortlist of chief executive
candidates to replace Paul McDade, who resigned in December.

 

Tullow, whose shares have shed around 90% of their value in the past six
months, said it aims to cut its general and administrative budget by around
$200 million over the next three years.

 

Its debt stood around $2.8 billion at the end of last year, compared with a
market capitalisation of $305 million as of Wednesday. The company, which
has put part of its Kenyan and Ugandan assets on the market, aims to raise
at least $1 billion in asset sales.

 

“Target valuations may be harder to achieve given the recent oil price fall,
which at least in the near term means questions remain on funding,” JP
Morgan analysts said in a note.

 

“Hence while asset quality is evident, it is over-ridden by high leverage in
a low oil price environment, and we therefore prefer to wait for Tullow to
deliver some of its key targets that will address the potential funding
gap.”

 

Tullow last month said it planned to cut a third of its staff after it was
hit by weak output in Ghana, delays in East Africa and lower-than-hoped-for
oil quality in Guyana.

 

Oil prices have slumped because of the expected impact of the coronavirus on
global growth, and the collapse of an agreement to cut oil output by major
producers. [O/R]

 

Tullow has hedged around 45,000 barrels a day of its 2020 production at a
floor price of $57.28 a barrel, and around 22,000 bpd of its 2021 output at
a floor of $52.78 a barrel.

 

 

 

S.Africa's Sanlam FY earnings fall 19%, in line with expectations

JOHANNESBURG (Reuters) - South Africa’s biggest insurer Sanlam said on
Thursday its annual profit fell 19%, coming in the middle of a range it
flagged last week, as it recorded a number of one-time charges.

 

The company had warned its headline earnings would drop by between 15% and
25%, dragged down by a 1.7 billion rand ($103.80 million) expense related to
a black economic empowerment transaction and a range of other charges.

 

Its headline earnings per share - the main profit measure in South Africa -
fell to 357.9 cents ($0.2186) in the year to Dec. 31, from 441.1 cents a
year earlier, as higher claims across its newer markets also dented its
bottom line.

 

Sanlam, however, said its underlying operational performance was “solid”,
especially in a difficult economy and volatile global markets.

 

“Our diversification across geographies, market segments and lines of
business ... helped us navigate these challenges to continue to deliver
strategic value to shareholders,” it said.

 

Its net operational earnings - a new performance measure it introduced in
the results, expanding on its previous measure of operating profit - grew by
14%.

 

The company, on a drive to expand across the African continent, said the
unit housing the businesses in its newer markets was the biggest earnings
driver, with a 29% jump in profit.

 

That unit includes SAHAM Finances, Sanlam’s newly acquired Moroccan
business. Sanlam bought the business, which operates in 26 countries via 65
subsidiaries across the continent, for $1 billion in March 2018 - the
101-year-old company’s largest-ever purchase.

 

($1 = 16.3782 rand)

 

 

 

Nigerian stocks fall to new four-year low

ABUJA (Reuters) - Nigerian stocks fell 3.29% on Thursday to new four-year
low as shares in the relatively liquid banking sector suffered.

 

The index of Nigeria’s top 10 lenders fell 8.05% to drag the main index down
to 22,778 points, a level last seen in January 2016.

 

 

 

Coronavirus: FTSE 100, Dow, S&P 500 in worst day since 1987

Shares around the world have plunged as investors fear the spread of the
coronavirus will destroy economic growth with government action insufficient
to arrest the decline.

 

The main UK index dropped more than 10% in its worst day since 1987.

 

In the US, the Dow and S&P 500 were also hit by their steepest daily falls
since 1987.

 

The declines came despite actions by the Federal Reserve and European
Central Bank to ease financial strains.

 

At the start of US trading, plummeting shares triggered an unusual automatic
suspension in trading for the second time this week.

 

When trade resumed 15 minutes later, shares continued to fall, taking cues
from the slide in European markets.

 

The S&P 500 fell 9.5% and the Nasdaq ended 9.4% lower, while losses on the
UK's FTSE 100 wiped some £160.4bn off the market. In France and Germany,
indexes cratered more than 12%.

 

"Markets are at a breaking point," said Neil Wilson, chief market analyst at
Markets.com. "No one knows what a total economic shutdown, however
temporary, looks like."

 

 

The declines came after the US restricted travel from mainland Europe.

 

Losses on European indexes accelerated after the eurozone's central bank
failed to cut interest rates, although it did pledge fresh stimulus
measures.

 

The New York branch of the Federal Reserve said it was pumping $1.5tr to
ease strains in the debt markets, offering increased overnight loans to
banks and expanding the kinds of assets it will buy to keep firms lending.

 

The announcement, which came after European markets had closed, briefly sent
shares higher, but they dropped back by the end of the day.

 

Rate cuts by the US central bank last week and the Bank of England on
Wednesday also did little to soothe investors.

 

"What we really need is some huge confidence that this isn't going to cause
the kind of stress and horrible loss of life [it has] in Italy everywhere
else in the world," said former Goldman Sachs chief economist Lord Jim
O'Neill.

 

 

Stocks in Asia also saw big falls earlier, with Japan's benchmark Nikkei 225
index closing 4.4% lower.

 

Panicked selling led to trading halts in Brazil, while not a single company
in the FTSE 100 index gained on Thursday.

 

Travel companies saw some of the biggest falls, driven by US President
Donald Trump's 30-day ban on travellers from mainland Europe.

 

Shares in Delta Air Lines and United Airlines - among the most affected by
the ban - dropped more than 20%. In the UK, airline group IAG was down more
than 15% and Tui fell 17%.

 

Other companies warning on the impact of Covid-19 on Thursday included:

 

·         BT Group announced that chief executive Philip Jansen had tested
positive for coronavirus. It said he had "relatively mild" symptoms and
would work remotely

·         Broadcom said uncertainty about demand was prompting it to
withdraw its 2020 growth forecast

·         Norwegian said it would ground 40% of its long-haul fleet and
cancel up to 25% of its short-haul flights until the end of May

·         WH Smith issued a profit warning after the outbreak hit sales in
its travel division, which includes store at airports and train stations

·         Cineworld shares fell by more than 20%. It said that in a
worst-case scenario, there was a risk it might not be able to repay its
debts

·         Estate agent Savills said the outbreak had caused a big drop in
transactions in China and across Asia

·         Princess Cruises, a line owned by Carnival, said it would suspend
operations for 60 days. Viking announced a similar move

·         Disney closed its California parks until the end of March

·         Oil prices also fell, with Brent crude down more than 8% at about
$33 a barrel.

 

On the floor of the New York Stock Exchange, tensions were high. Some
traders were speculating the tumbles could trigger a second trading
suspension - something that has never happened, not even during the
financial crisis.

 

Since the start of the market turmoil, indexes in the US and elsewhere have
fallen more than 20% from their recent highs - a threshold that is a red
flag for a recession.

 

"It looks increasingly likely that the coming contraction will be deeper and
more protracted than we were anticipating just a few days ago," said Jay
Bryson, acting chief economist at Wells Fargo. "The airline and hotel
industries are in free fall, and there will be multiplier effects."

 

Investors in the US are now watching the US government response.

 

In a presidential address on Wednesday, Mr Trump said he would extend
deadlines for tax payments for those affected, increase low-cost loans to
small businesses and provide financial relief for US workers who are ill,
quarantined or caring for others due to the illness.

 

But Republicans and Democrats in Congress appear at odds over additional
steps while Mr Trump's favoured approach - a tax cut for workers - has
failed to garner widespread support.

 

"The stock market at least is saying it's not been enough yet," said Liz Ann
Sonders, chief investment strategist at Charles Schwab.

 

Why should I care if stock markets fall?

Many people's initial reaction to "the markets" is that they are not
directly affected, because they do not invest money.

 

Yet there are millions of people with a pension - either private or through
work - who will see their savings (in what is known as a defined
contribution pension) invested by pension schemes. The value of their
savings pot is influenced by the performance of these investments.

 

So big rises or falls can affect your pension, but the advice is to remember
that pension savings, like any investments, are usually a long-term bet.

 

The Western world's three largest central banks have now pitted their
collective firepower against the economic chill caused by the coronavirus -
to little effect.

 

Stock markets continue to slide. The FTSE 100 has had its worst day since
Black Monday in October 1987.

 

Observers again might wonder what new information is spooking investors,
given that central banks have in the last 10 days done their best to halt
the slide. In truth, there is little new - most traders already knew that
the virus is likely to cause significant economic disruption likely to push
most Western economies into recession.

 

What may have spooked them again is President Donald Trump's decision to
stop most travel between continental Europe and the United States - a big
enough factor in itself, but more importantly, the manner in which it was
done. There was no consultation, and Mr Trump looked uncharacteristically
uncertain, as if he, too, had finally been panicked by the virus.

 

There is also a small, but telling detail - Mr Trump first said the ban
would apply to cargo flights, but then corrected himself to say it would
not. A big proportion of cargo, however, is carried in the belly holds of
passenger aircraft. If there are no passenger flights, there will be much
less cargo, an enormous disruption to exporters and manufacturers on both
sides of the Atlantic.--BBC

 

 

 

Coronavirus 'could cost millions of tourism jobs'

The global coronavirus outbreak means millions of travel and tourism jobs
are at risk, says a leading industry body.

 

The World Travel and Tourism Council (WTTC) says up to 50 million jobs could
be lost because of the pandemic.

 

Its chief executive, Gloria Guevara, said the outbreak "presents a
significant threat to the industry".

 

The news comes after thousands of international flights were cancelled and
some insurance firms suspended travel cover for new customers.

 

New figures from the WTTC suggest that the travel sector could shrink by up
to 25% in 2020.

 

The trade body is calling on governments to take several steps to protect
the industry, including:

 

Increase budgets for promoting travel destinations.

But Ms Guevara added: "Travel and tourism has the strength to overcome this
challenge and will emerge stronger."

 

The tourism industry has been massively affected by the spread of
coronavirus, as many countries have introduced travel restrictions in an
attempt to contain its spread.

 

Cruise ship firm Princess Cruises is suspending all operations for 18
months. One of its cruises was kept off the cost of San Francisco for five
days after 21 passengers tested positive for the virus.

 

British Airways, EasyJet and Norwegian Air have all also cut flights in
response to the outbreak.

 

Korean Air even warned that the coronavirus could threaten its survival.

 

Chinese airline passenger numbers dropped by 84.5% last month, highlighting
the huge economic impact on the country where the virus originated.

 

Its aviation regulator said on Thursday that the drop had caused a 21bn-yuan
(£2.35bn) fall in revenue.

 

Travel industry experts have expressed concerns about Chinese tourists being
kept at home.

 

In the UK, for example, there were 415,000 visits from China in the 12
months to September 2019, according to VisitBritain.

 

Chinese travellers also spend three times more than an average visitor to
the UK at £1,680 each.

 

As more large-scale events are cancelled and the number of flight
cancellations increases, there are fears the industry could take a bigger
hit.--BBC

 

 

 

Is this the digital future for Bank of England banknotes?

The Bank of England is considering the introduction of electronic banknotes
for use by consumers and businesses.

 

Governor Mark Carney said: "We are in the middle of a revolution in
payments," saying the Bank must look into how electronic money could work.

 

He said this would complement, not replace, paper banknotes while people
still wanted physical cash.

 

But it could open the door to programmable money to integrate with home
appliances or the tax system.

 

Carney calls for crackdown on crypto-currency 'mania'

Budget 2020: Pledges on the future of cash

Banknotes have been the only way for households to make payments with
central bank money for 300 years, a discussion paper published by the Bank
says.

 

The total value of banknotes in the UK economy was close to an all-time
high, but people had been making fewer payments in cash, the Bank said.

 

The governor said fintech firms had begun to offer new forms of money and
new ways to pay with it, but it was important to have currency from a
trusted central bank.

 

So, the Bank is considering a Central Bank Digital Currency, which would be
denominated in pounds sterling, just like banknotes. So £10 of the digital
currency would always be worth the same as a £10 note.

 

This system would be different from money held digitally in a bank account,
or cryptocurrencies. It would be guaranteed by the Bank, rather than a
commercial business.

 

The idea also suggests that consumers would be able to pay for things
without all the data about their transactions going to their bank. There
would be some anonymity, as there is with cash.

 

Loading Central Bank Digital Currency would be an electronic version of
withdrawing banknotes from an ATM. The Bank stressed this would not replace
cash, particularly for those who prefer to use it.

 

"As long as demand for cash remains, the Bank is committed to meeting this
demand," the Bank's discussion paper says.

 

The currency would also be separate from card payments, meaning it would not
be affected by technical failures at Visa, Mastercard, or other payment
networks.

 

Payments of the future

The introduction of a digital currency could lead to "programmable money",
when payments could be integrated with appliances at home or tills at the
shops.

 

Tax payments could be routed to HM Revenue and Customs at the point of sale,
the Bank said.

 

Other examples are shares automatically paying dividends directly to
shareholders, or electricity meters paying suppliers directly, based on the
amount of power used.

 

It could also help with very small payments at a lower cost than now,
allowing payments such as for a few pence each time to read individual news
articles, rather than signing up to a monthly subscription.

 

Other central banks around the world are investigating the option of issuing
digital currency. Interested parties are being invited to respond to the
Bank of England's discussion by 12 June.--BBC

 

 

 

Coal power developers 'risk wasting billions'

Coal power developers risk wasting hundreds of billions of pounds as new
renewable sources are now cheaper than new coal plants, a report has said.

 

The shift is mainly down to the tumbling cost of wind and solar power,
researchers from Carbon Tracker said.

 

They added that in 10 years it will be cheaper to close down coal plants and
build wind and solar plants instead.

 

But the International Energy Agency (IEA) says coal will remain the largest
global power source for years.

 

The report's authors say they looked at the economics of 95% of the world's
coal-fired power stations.

 

In most countries, including the UK, it's already cheaper to build renewable
energy generation than new coal-burning plants.

 

At 60% of coal plants in the world, the generating costs are higher than
they would be from new renewables, the report said.

 

But the study goes a step further, forecasting that within 10 years the
cheapest option in all countries would be to close down existing coal-fired
power stations and build wind and solar power plants instead.

 

Ditching coal

The issue is crucial to global plans to tackle climate change.

 

Carbon Tracker says that to combat climate change effectively one coal plant
has to retire every day until 2040.

 

The report urges governments and investors to cancel coal projects in the
pipeline - or risk almost £500bn in wasted investment.

 

It says in deregulated economies, market forces will drive coal out of
existence.

 

That's already started to happen in the US, where President Trump promised
to revive the coal industry, but found that investors weren't willing to
back him.

 

However, many developing countries with tight bonds between power suppliers
and governments still allow coal plants to operate even if the higher costs
are passed to consumers.

 

Matt Gray, of Carbon Tracker and a co-author of the report, said:
"Renewables are out-competing coal around the world and proposed coal
investments risk becoming stranded assets which could lock in high-cost coal
power for decades.

 

"The market is driving the low-carbon energy transition, but governments
aren't listening.

 

"It makes economic sense for governments to cancel new coal projects
immediately and progressively phase out existing plants."

 

Coal-fired future?

Some nations, especially in Asia, are sticking with coal for power
generation.

 

But the IEA says coal-fired electricity generation is set to experience its
largest ever decline - over 250 terawatt hours (TWh), or more than 2.5%.

 

This is led by double-digit falls in the US and Europe,

 

The IEA predicts the share of coal will decline from 38% in 2018 to 35% in
2024 - but that will still leave coal as by far the single largest source of
power supply worldwide.

 

But it says the speed of the decline is expected to slow unless coal comes
under additional pressure from stronger climate policies or
lower-than-expected natural gas prices.

 

The IEA's Keisuke Sadamori said: "This is not the end of coal, since demand
continues to expand in Asia."

 

He added: "The region's share of global coal power generation has climbed
from just over 20% in 1990 to almost 80% in 2019, meaning coal's fate is
increasingly tied to decisions made in Asian capitals."

 

The UK is in the process of abolished coal-fired power generation and has
used the UN climate change process to launch the Powering Beyond Coal
Alliance.--BBC

 

 

Gambling firm Betway hit with record £11.6m penalty

Online betting firm Betway has been hit with a record penalty of £11.6m for
failings over customer protection and money-laundering checks.

 

The Gambling Commission said Betway failed to check the source of funds of
one customer who deposited over £8m and lost over £4m in a four-year period.

 

It also failed to effectively interact with a customer who deposited and
lost £187,000 in two days.

 

The penalty package is the biggest to date faced by a UK gambling firm.

 

The Gambling Commission's investigation said the failings were linked to
dealings with seven of Betway's high-spending customers.

 

It said that "as a result of a lack of consideration of individual customers
affordability and source of funds checks, the operator allowed £5.8m of
money to flow through the business which has been found, or could reasonably
be suspected to be, proceeds of crime".

 

The commission said the investigation had also revealed "inadequate
management oversight", adding that a probe "into responsible Personal
Management Licence holders" was continuing.

 

"The actions of Betway suggest there was little regard for the welfare of
its VIP customers or the impact on those around them," said Richard Watson,
executive director at the Gambling Commission.

 

"As part of our ongoing programme of work to make gambling safer, we are
pushing the industry to make rapid progress on the areas that we consider
will have the most significant impact to protect consumers," he added.

 

"The treatment and handling of high-value customers is a significant piece
of that work and operators are in no doubt about the need to tackle the
issue at speed."--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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