Major International Business Headlines Brief::: 30 March 2020

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Major International Business Headlines Brief::: 30 March 2020

 


 

 


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ü  Coronavirus: Virgin Atlantic to seek bailout in coming days

ü  Coronavirus: OneWeb blames pandemic for collapse

ü  John Menzies axes 17,500 jobs amid travel slump

ü  Coronavirus: Trump signs into law largest bailout in US history

ü  Drop in consumer confidence sends US stocks lower again

ü  Coronavirus: 2,000 jobs at risk as Carluccio's faces collapse

ü  Coronavirus: Asia shares up on multi-trillion dollar stimulus hopes

ü  Designer brand Ralph Lauren to make masks and gowns

ü  South Africa announces tax relief for business hit by coronavirus

ü  South Africa may approach the IMF for "health funding" -Mboweni

ü  Nigeria imposes offshore oil worker restrictions in coronavirus battle

ü  Egypt's banks told to limit withdrawals and deposits

ü  Angola to cut budget as fifth year of recession looms large

ü  Namibia suspends mining operations as coronavirus lockdown takes effect

ü  Algeria's annual inflation slips in February

ü  World Bank, IMF urge debt relief for poorer countries hit by coronavirus

ü   

 

 


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Coronavirus: Virgin Atlantic to seek bailout in coming days

Virgin Atlantic is expected to ask for a government bailout worth hundreds
of millions of pounds in the coming days, the BBC understands.

 

Requests for state aid are also expected from other airlines.

 

The government has said it will only step in to help struggling airlines "as
a last resort" on a case-by-case basis.

 

However, the Transport Secretary told MPs he can't rule out the state taking
an ownership stake in UK airlines that have been battered by coronavirus.

 

Grant Shapps told MPs on the Transport Select Committee that nothing had
been ruled out in its response to coronavirus for the aviation sector.

 

Asked by Labour MP Ruth Cadbury if the government would consider buying a
share of UK airlines that face collapse, Mr Shapps said: "It was important
to save companies that would survive in normal times.

 

However, the Transport Secretary said current shareholders "must be part of
the solution".

 

UK-based airlines have already announced measures to save money such as
temporarily laying-off staff.

 

Virgin Atlantic had previously suggested the government offer UK carriers
£7.5 billion in credit facilities.

 

The airline's founder Sir Richard Branson this week offered to inject £250
million into the Virgin Group, with most of that amount going to the
airline.

 

Turbulent times

The vast bulk of flights to and from the UK have been grounded amid the
coronavirus pandemic.

 

Some airlines like British Airways are still operating a number of rescue
flights to bring stranded Brits home.

 

Earlier this week, the government said it would not deliver a financial aid
package for the aviation industry, but its emergency business measures,
including a Bank of England scheme for firms to raise capital and employee
wage subsidies, were available for airlines.

 

But industry group the International Air Transport Association (IATA) warned
of an "apocalypse" in the aviation sector as it called on governments around
the world for help.

 

The US Senate on Wednesday passed a $58 billion (£46.6 billion) aid package
for its airline industry, which included cash for paying pilot, crew and
staff salaries.

 

To bail out, or not bail out?

You'd be forgiven for being confused about whether the government is going
to bailout UK-based airlines, or not.

 

First ministers indicated that an industry-wide bailout was on the cards.

 

Virgin Atlantic went public and said £7.5bn was needed.

 

But then an about turn from the Chancellor.

 

Rishi Sunak wrote to airlines and airports telling them that an
industry-wide emergency rescue package for the aviation industry wasn't on
its way after all.

 

What the government is offering is bespoke financial support on a
case-by-case basis, but only once airlines have exhausted all other options.

 

Ministers want to be sure that wealthy shareholders play their part.

 

The other reason an industry-wide package didn't happen was because the
airlines involved are ultimately rivals and where as some of them were
champing at the bit for a government loan, others were against it.

 

The more cash-rich the airline, the less keen on a bailout.

 

And, for some, cash is the immediate problem.--BBC

 

 


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Coronavirus: OneWeb blames pandemic for collapse

OneWeb, the high-profile London-based satellite start-up, has filed for
bankruptcy protection in the US.

 

The firm, which has been building a network to deliver broadband across the
globe, blamed the Covid-19 crisis for its inability to secure new
investment.

 

OneWeb issued a statement saying it was laying off most of its staff while
it seeks a buyer for the company.

 

The start-up recently launched the 74th satellite in a constellation planned
to total at least 648 spacecraft.

 

The idea is that this network will provide high-bandwidth, low-latency
internet connections to any point on Earth, bar Antarctica.

 

Rumours of a collapse had been swirling around OneWeb this past week. It had
raised £2.6bn to implement its project but experts in the space industry
speculated that double this sum would probably be needed to complete the
system.

 

The statement released by OneWeb in the early hours of Saturday, London
time, said the company had been close to obtaining financing but that, "the
process did not progress because of the financial impact and market
turbulence related to the spread of Covid-19".

 

 

CEO Adrian Steckel added: "Today is a difficult day for us at OneWeb. So
many people have dedicated so much energy, effort, and passion to this
company and our mission. Our hope is that this process will allow us to
carve a path forward that leads to the completion of our mission, building
on the years of effort and the billions of invested capital."

 

OneWeb's plan was first presented in detail to the media at London's Royal
Institution in 2015.

 

Early supporters included Airbus, Intelsat, Bharti Enterprises, Coca Cola,
Group Salinas, Hughes Network Systems, and Virgin Group. Softbank became a
major investor.

 

But building satellite constellations is a very expensive undertaking and
the history of the sector is littered with companies that also ended up
seeking Chapter 11 protection with the US Bankruptcy Court.

 

Some have managed to pull through - the classic example being Iridium, which
launched the first low-Earth-orbit satellite-phone network. It recently put
up a second-generation constellation in the sky.

 

OneWeb is seeking to do the same. As well as successfully launching 74
satellites, it has valuable radio spectrum rights and has built getting on
for half of the 44 ground stations needed to operate its constellation. It
will hope this progress will prove attractive to a new owner.

 

OneWeb has been in competition with California entrepreneur Elon Musk's
SpaceX company to build a satellite internet mega-constellation. His rockets
are regularly putting up 60 satellites at a time.

 

Amazon founder Jeff Bezos, the world's richest man, is also working on a
concept he calls Kuiper.

 

If no buyer for OneWeb or its assets can be found, the UK government is
ultimately responsible for the 74 spacecraft in orbit.

 

As the licensing state, it will carry the liability if these satellites are
involved in a collision.--BBC

 

 

 

John Menzies axes 17,500 jobs amid travel slump

Aviation services firm John Menzies has announced it has cut more than
17,500 jobs worldwide as it struggles to deal with the major slump in air
travel caused by the coronavirus outbreak.

 

The Edinburgh-based firm said the move was part of a major effort to cut
costs.

 

The job losses represent more than half the group's total workforce.

 

Menzies provides fuelling, ground handling and cargo handling services at
200 airports.

 

The company said its international and domestic airline customers had been
grounding passenger flights "on an unprecedented scale".

 

The number of flights handled in the past two weeks has fallen by more than
60%, while volumes in the cargo sector have dropped by about 20%.

 

In a trading update, the company said those who had lost their jobs were
being supported in some countries by governmental schemes and it hoped that
"in the fullness of time a high number of these employees can return to the
business".

 

'Difficult times'

 

Menzies also revealed that it was attempting to secure some of the emergency
funding for businesses announced this week by the chancellor of the
exchequer and was currently engaged in "constructive discussions" with its
lending banks.

 

As part of its cost cutting measures, all of the company's directors and
senior management have now taken a 20% pay cut.

 

Chief executive Giles Wilson said: "John Menzies plc has existed since 1833
and been listed since 1962 but never have we faced such difficult and
unpredictable times.

 

"Our industry has been one of the most affected by Covid-19 and we are doing
everything we can to reduce costs whilst looking after the needs of our
employees."--BBC

 

 

 

Coronavirus: Trump signs into law largest bailout in US history

President Trump has signed the largest-ever US financial stimulus package,
worth $2tn (£1.7tn), as the country grapples with the coronavirus pandemic.

 

The House of Representatives passed the cross-party bill two days after the
Senate debated its provisions.

 

On Wednesday the number of Americans filing for unemployment surged to a
record high of 3.3 million people.

 

The US has more confirmed cases of coronavirus than any other country, with
more than 100,000 positive tests.

 

No Democratic lawmakers were invited to the historic signing ceremony, which
was held at the White House, though the president thanked both parties "for
coming together, setting aside their differences and putting America first".

 

Mr Trump said the package was "twice as large" as any prior relief bill.

 

"This will deliver urgently needed relief to our nation's families, workers
and businesses," he said.

 

Just before signing the act into law, Mr Trump invoked the Defence
Production Act (DPA), which gives the president the power to force private
industries to create items required for national defence.

 

Mr Trump said the order will compel General Motors (GM) to manufacture
much-needed medical ventilators for the federal government.

 

Earlier in the day, Mr Trump tweeted that GM had promised to "give us 40,000
much needed Ventilators, 'very quickly'.

 

 

"Now they are saying it will only be 6,000, in late April, and they want top
dollar," he said, threatening to invoke the DPA.

 

During the bill signing, the president said that "tremendous [medical]
supplies" would be coming soon, adding: "We've had great results on just
about everything we're talking about."

 

Earlier on Friday, New York Governor Andrew Cuomo announced eight temporary
hospitals to meet an expected surge in cases.

 

Coronavirus updates from around the world

He said 519 people had died in the state - the worst-hit in the US - and
there were 44,635 confirmed cases.

 

What happened in Congress?

Democrats and Republicans in the Democratic-led House approved the stimulus
package by voice vote on Friday following a three-hour debate.

 

"Our nation faces an economic and health emergency of historic proportions
due to the coronavirus pandemic, the worst pandemic in over 100 years,"
House Speaker Nancy Pelosi said.

 

Members of the House had been ready to conduct the vote at their homes but
were forced to return to Washington at the last minute after a Republican
representative from Kentucky demanded a quorum of half the chamber be
present.

 

Thomas Massie - who objected to the stimulus package saying it contained too
much spending - also sought to delay proceedings by demanding a formal
recorded vote, as opposed to a voice vote, but was overruled.

 

Mr Trump vented his fury at Mr Massie on Twitter, calling him a "third-rate
grandstander" and demanding he be thrown out of the Republican party.

 

The new law enables direct payments to individuals and companies whose
livelihoods and businesses have been affected by the pandemic.

 

It seeks to deliver $1,200 to every American earning less than $75,000 per
year and $500 per child.

 

It also gives money to directly to state governments, and bolsters the
unemployment benefits programme.

 

Under the law, jobless benefits will be extended to those not normally
covered, such as freelancers and workers in the gig economy.

 

 

The bill also offers loans and tax breaks to companies that face going out
of business, as one in every four Americans is ordered to remain at home and
only go outside for essential needs.

 

Officials across the US have closed restaurants, bars, cinemas, hotels and
gyms in an effort to slow the spread of the virus.

 

Car firms have halted production and air travel has fallen dramatically.
According to economists, a fifth of the US workforce is on some form of
lockdown.

 

What else is happening in the US?

With almost 1,500 virus-related fatalities, the US death toll remains lower
than those in Italy and China. But there are virus hotspots in New York, New
Orleans and Detroit.

 

Mr Cuomo said in any "realistic scenario" cases of people seriously ill from
the virus would overwhelm New York's healthcare system.

 

Tesla gives New York hundreds of ventilators

 

He said the state had an "astronomical" shortfall in the number of
ventilators - which support patients who are no longer able to breathe on
their own.

 

Demand for ventilators has also doubled in the southern state of Louisiana.
Governor John Bel Edwards said New Orleans would run out of ventilators by 2
April and possibly run out of hospital beds by 7 April if the number of new
infections did not subside.

 

"It's not some flimsy theory. This is what is going to happen," he said.

 

Medical staff across the country are also reporting shortages of personal
protective equipment.

 

Earlier on Friday World Health Organization chief Dr Tedros Adhanom
Ghebreyesus said a "chronic global shortage" of protective equipment was one
of the "most urgent threats" to the ability to save lives.

 

On Thursday Vice-President Mike Pence said coronavirus tests were now
available in all 50 states and more than 552,000 tests had been conducted
nationwide.

 

Mr Trump has set a much-criticised goal of Easter Sunday, 12 April, for
reopening the country.--BBC

 

 

 

Drop in consumer confidence sends US stocks lower again

Financial markets reversed course on Friday after a three day rally,
dropping as consumer confidence plummets amid the coronavirus pandemic.

 

The Dow Jones led US indexes lower, sliding more than 4%. European markets
also declined.

 

The falls came despite US approval of a massive aid bill as the number of
virus cases in the US surpassed China.

 

University of Michigan data also showed US consumer confidence dropped to
its lowest level in three years in March.

 

"The outlook for the national economy for the year ahead weakened
dramatically in March, with the majority now expecting bad times financially
in the entire country," the director of the survey said in a statement.

 

More than 3 million Americans filed for unemployment benefits last week, a
record high that follows widespread forced business, school and other
closures as authorities try to limit the spread of the virus.

 

Concerns about the economic impact have prompted market gyrations and wiped
trillions of dollars worth off of value off shares since February, but
prices had recovered some ground this week as governments and central banks
around the world moved forward with plans to blunt the economic impact of
the pandemic.

 

On Friday, President Donald Trump was expected to sign a more than $2tn
(£1.7tn) relief package, after the US Congress approved the aid for
households and companies. It follows unprecedented steps by the Federal
Reserve to shore up the economy.

 

The Dow and the S&P 500 on Thursday had marked their biggest three-day gains
since the Great Depression in anticipation of the measure. They remained up
about 10% for the week.

 

However, analysts have said they expect investors to remain on edge until
the pandemic is under control.

 

The University of Michigan survey found consumer sentiment fell 11.9 points
in March - the biggest one month drop since October 2008, at the height of
the global financial crisis.

 

Wells Fargo analysts said the figures signalled another "body blow" to the
economy.

 

"We are in the early stages of this crisis and are only now beginning to see
its severity in the economic data," they wrote in a report.

 

The S&P 500 fell more than 3.3% and the Nasdaq dropped 3.8% on Friday.
London's FTSE 100 tumbled more than 5%, while main indexes in France and
Germany also fell. Earlier Asian markets had gained, with the Nikkei 225 up
3.8%.

 

Cruise companies, including Norwegian and Carnival, were among the biggest
losers on US indexes. Boeing, which had seen share prices surge this week on
expectations it would received, also dropped more than 6%, after officials
rebutted the idea.--BBC

 

 

 

 

Coronavirus: 2,000 jobs at risk as Carluccio's faces collapse

Italian restaurant chain Carluccio's is facing collapse, after warning it
was facing permanent branch closures due to the coronavirus.

 

It is currently working with administrators in a move that could threaten
more than 2,000 jobs.

 

Before the outbreak it was hit by the crunch in the casual dining sector and
recently urged the state to step in.

 

Administrator FRP said it was working with Carluccio's to "consider all
options" for the restaurant's future.

 

Restrictions aimed at curbing the coronavirus pandemic have recently forced
all cafes and restaurants to close.

 

Before the government's pledge to pay 80% of those workers' salaries,
Carluccio's Chief Executive Mark Jones told the BBC the firm "was days away
from large-scale closures" without state aid.

 

"FRP is working with the directors of Carluccio's to consider all options
for the company in the current climate," a spokesperson for the
administrator said.

 

Carluccio's has faced some difficult times in recent years, closing a third
of its restaurants in 2018 as part of a Company Voluntary Arrangement (CVA)
rescue plan.

 

Like many in the casual dining sector, it has felt the brunt of a fall in
consumer spending, combined with higher business rates, and increases in the
National Living Wage.

 

Prezzo and Byron also used CVAs to close restaurants while Jamie's Italian
went into administration last year.

 

The chain was founded more than 20 years ago by celebrity chef and
restaurateur Antonio Carluccio, who died aged 80 in 2017.--BBC

 

 

 

 

Coronavirus: Asia shares up on multi-trillion dollar stimulus hopes

Shares in Asia have continued a global stock market rally on hopes global
authorities will do more to combat the impact of the coronavirus.

 

On Thursday top US share indexes capped their best three-day gains since the
Great Depression.

 

It comes as investors expect the US Congress to pass a massive stimulus
package by the end of Saturday.

 

The Group of 20 (G20) major economies has also pledged to inject over $5
trillion into the global economy.

 

Japan's benchmark Nikkei 225 gained 1.6%, the Hang Seng in Hong Kong was up
by 1.6% and China's Shanghai Composite rose 1%.

 

That followed the Dow Jones Industrial Average and S&P 500 both climbing
more than 6% on Wall Street, capping their best three-day streaks since the
Great Depression of the 1930s. The tech-heavy Nasdaq ended higher for a
second day, up 5.6%.

 

The rally comes after weeks of stock market volatility, as investors weigh
the effect of measures to slow the spread of the virus against actions taken
by governments and central banks to ease the impact of disruption to the
global economy.

 

This month alone, the Dow has seen the six biggest one-day gains and five
biggest one-day losses of its 135 year history.

 

 

In Washington DC, leaders of the US House of Representatives have said they
are determined to pass a $2 trillion coronavirus relief bill on Friday, or
at the very latest on Saturday.

 

The huge impact of the outbreak on the American economy was highlighted on
Thursday as official figures showed that almost 3.3 million people
registered to claim jobless benefits for the week ended 21 March. That is
nearly five times more than the previous record of 695,000 set in 1982.

 

Also on Thursday, G20 leaders pledged to inject more than $5 trillion into
the world economy to limit job and income losses from the coronavirus and
“do whatever it takes to overcome the pandemic.”

 

Their statement also contained the most conciliatory language on trade
expressed by the group in years, promising to ensure the flow of vital
medical supplies and other goods across borders and to resolve supply chain
disruptions.

 

“The G20 is committed to do whatever it takes to overcome the pandemic,”
along with the World Health Organization and other international
institutions, it said.--BBC

 

 

 

Designer brand Ralph Lauren to make masks and gowns

Ralph Lauren is to start making medical masks and gowns - the latest
designer brand to lend its support to the coronavirus fight.

 

The fashioner designer announced the shift in production through its
charitable arm on Thursday.

 

The Ralph Lauren Corporate Foundation will start making 250,000 masks and
25,000 isolation gowns in the US.

 

Other fashion brands have also pledged to help make urgently needed medical
wear.

 

The foundation is also donating $10m (£8.2m) towards the global response to
the coronavirus pandemic. In the US the death toll has now risen above
1,000.

 

"At the heart of our company, there has always been a spirit of togetherness
that inspires our creativity, our confidence and most importantly our
support for one another. In the past weeks and months, that spirit has never
wavered," said Ralph Lauren, executive chairman of the fashion brand.

 

Other well-known retailers are also shifting production lines to manufacture
face masks and gowns, while carmakers are looking at how they can help make
ventilators.

 

Luxury coat brand Canada Goose said it would begin making gowns to be
donated to healthcare workers. The production will start at two of its
previously closed Canadian manufacturing facilities next week, with the
initial goal of producing scrubs and gowns.

 

"Across Canada, there are people risking their lives every day on the
frontlines of Covid-19 in healthcare facilities, and they need help. Now is
the time to put our manufacturing resources and capabilities to work for the
greater good," said Dani Reiss, chief executive of Canada Goose.

 

San Francisco-based Gap said it would also use its factories to make
protective gear while using its connections in the global supply chain to
get protective masks and gowns.

 

Earlier this month, LVMH, which owns the Louis Vuitton brand, said it would
start making hand sanitiser in France.--BBC

 

 

 

South Africa announces tax relief for business hit by coronavirus

JOHANNESBURG (Reuters) - South Africa’s National Treasury said on Sunday it
was introducing a new tax subsidy of 500 rand ($28) per month for each
worker to employers for the next four months to cushion financial losses
suffered by firms due to the coronavirus.

 

In a statement, the treasury said it would also permit businesses with
revenue of 50 million rand or less to delay paying 20% of their employees’
tax liabilities over the next four months.

 

“The tax adjustments are made in light of the National State of Disaster and
due to the significant and potentially lasting negative impacts on the
economy from the spreading of the COVID-19 virus,” the treasury said in a
statement.

 

South Africa entered a 21-day lockdown on Friday with people restricted to
their homes and most businesses shuttered. The country has reported over
1,180 cases of coronavirus and now faces a near certain deep recession.

 

The announcement also follows Friday’s decision by Moody’s to cut the
country’s debt to subinvestment, meaning all three of the top ratings firms
now rank the country at junk.

 

Earlier, Finance Minister Tito Mboweni told the Sunday Times newspaper South
Africa would consider approaching the International Monetary Fund and World
Bank for funding to fight the coronavirus.

 

($1 = 17.6250 rand)

 

 

 

South Africa may approach the IMF for "health funding" -Mboweni

JOHANNESBURG (Reuters) - South Africa may approach the International
Monetary Fund and World Bank for funding to fight the coronavirus that
threatens to drag the country’s economy deeper into recession, Finance
Minister Tito Mboweni said in the Sunday Times newspaper.

 

“This morning in a conversation with the (central) Reserve Bank and the
Treasury I indicated that we should proceed and speak to the IMF and the
World Bank about any facility that we can access for health purposes,”
Mboweni said in an interview with the weekly newspaper.

 

South Africa entered a 21-day lockdown on Friday, with people restricted to
their homes and most businesses shuttered. The country has reported 1,187
cases of coronavirus and now almost certainly faces a deep recession.

 

On Friday, the country lost its last investment-grade credit rating when
Moody’s downgraded South Africa to junk, citing persistently weak growth,
fast-rising debt and the impact of an unreliable electricity supply.

 

“We take no ideological position in approaching the IMF and World Bank. They
are creating facilities for this environment and SA should also take
advantage of those facilities in order to relieve pressure on the fiscus,”
Mboweni said in the interview.

 

 

 

Nigeria imposes offshore oil worker restrictions in coronavirus battle

YENAGOA, Nigeria (Reuters) - Nigeria’s petroleum regulator has ordered oil
and gas companies to reduce their offshore workforce and move to 28-day
staff rotations as part of measures to curb the spread of the coronavirus,
according to a circular seen by Reuters.

 

Health experts fear a widespread outbreak in Africa’s most populous country,
which has about 200 million inhabitants, and the country is keen to protect
oil production, which provides 90% of much-needed foreign exchange.

 

A coronavirus case on an offshore rig could spread quickly among workers and
have a potentially devastating impact on production.

 

Sarki Auwalu, director of the Department of Petroleum Resources, said that
only staff on essential duties would be allowed to travel to offshore or
remote locations.

 

“Non-essential staff currently at offshore/remote locations should be
withdrawn with immediate effect,” he said in a statement.

 

Nigeria, which has 97 confirmed coronavirus cases, has shut international
airports, closed all land borders and imposed curbs on cargo vessels allowed
to dock at its ports in an effort to contain the outbreak.

 

Rivers State, in which Port Harcourt serves as the hub of Nigeria’s oil
industry, closed its own borders to human traffic this week.

 

Oil and gas companies operating in Nigeria have previously said that the
health and safety of workers was their top priority.

 

Industry sources said that a number of oil companies had already shifted
from 14-day rotations to 28 days. Some are also implementing a 14-day
quarantine for workers before they leave for rigs.

 

Oil prices have fallen by two thirds since the start of the year, which has
forced Nigeria to cut its budget and prompted oil companies to reduce their
spending plans.

 

 

 

 

Egypt's banks told to limit withdrawals and deposits

CAIRO (Reuters) - Egyptian banks have been instructed to apply temporary
limits on daily withdrawals and deposits in a move seemingly designed to
control inflation and hoarding as concern grows over the spread of the
coronavirus.

 

The daily limit for individuals would be 10,000 Egyptian pounds ($635) and
50,000 pounds for companies, a central bank statement said, though
businesses will be exempt from the withdrawal limits if the money is used to
pay employees.

 

The central bank has also limited daily ATM withdrawals and deposits to
5,000 pounds, it said in a statement.

 

“Not official, but I heard (it was designed) to control hoarding and
inflation,” said one analyst who asked not to be named.

 

“This could reduce hoarding and panic buying and contain prices,” a second
analyst said.

 

The central bank has also urged people to limit their use of banknotes and
to rely on electronic transfers and e-payments.

 

“All banks cancelled fees on transfers and e-payment methods for the
citizens’ convenience,” the statement added.

 

Egypt reported 40 new coronavirus cases and six fatalities on Saturday,
bringing the totals to 576 confirmed infections and 36 deaths.

 

Egypt ordered mosques to shut their doors to worshippers for two weeks from
March 21.

 

The Ministry of Islamic Endowments said on Sunday that it would extend the
closure indefinitely.

 

($1 = 15.7500 Egyptian pounds)

 

 

 

Angola to cut budget as fifth year of recession looms large

LAGOS (Reuters) - Angola’s finance minister said the country’s economy will
contract by 1.21% in 2020, marking a fifth year of recession, as the
coronavirus and a slump in oil prices batter its finances.

 

Finance Minister Vera Daves de Sousa said Africa’s third-largest economy is
freezing 30% of its “goods and services” budget and recalibrating spending
plans based on a maximum oil price of $35 a barrel - $20 lower than
previously envisaged.

 

    She said the “deterioration of the surrounding economic environment” was
having a significant impact on the oil-producing nation.

 

Crude oil prices - slammed by a coronavirus-related drop in demand and a
battle for market share between Saudi Arabia and Russia - have fallen
precipitously, with Brent crude settling a little below $25 a barrel on
Friday. [O/R]   

 

Angola’s capital expenditure has been suspended until the budget review is
complete, according to a statement issued after a Council of Ministers
meeting on Friday, and Daves de Sousa warned that the country will
experience an increase in exchange rate depreciation and higher than
expected inflation.

 

    She added that the budget freeze would exclude food, medicine, cleaning
and sanitation expenditure. She also said that the planned end to
subsisidised fuel would be postponed and that humanitarian aid and donated
imports would be exempt from value added tax and customs duty.

 

    “We will do everything so that this pandemic reaches the smallest number
of Angolans,” she said.

 

The Angolan sovereign wealth fund, meanwhile, will release a total of $1.5
billion, Daves de Sousa said, on condition of future repayment through
increased tax on the Bank of Angola’s rolling debts.

 

    Daves de Sousa said that oil production, which provides the bulk of
government funds, is expected to fall to 1.36 million barrels per day (bpd)
and that the average carat price for diamonds, another key Angolan resource,
had dropped to $100.30 from $162.

 

    Angola has been mired in recession since 2016, with oil production
dropping at its ageing offshore fields.

 

The government is in the midst of a number of sweeping reforms aimed at
diversifying the economy away from oil, streamlining oil regulations to
attract investment and reduce bloated state spending.   

 

 

 

Namibia suspends mining operations as coronavirus lockdown takes effect

WINDHOEK (Reuters) - Namibia on Saturday ordered mining companies to cease
operations for three weeks as the country entered its first day of a partial
lockdown, and stepped up measures to curb coronavirus infections which
currently stand at eight people.

 

Mines and Energy Minister Tom Alweendo said in a statement mining activities
should be discontinued during the lockdown, which lasts until April 16.

 

The sector generates around 50% of the small southern African nation’s
export revenue, contributing 9.3% to gross domestic product (GDP) in 2019,
and is key to reversing the recent recession driven by a sharp decline in
primary production.

 

Namibia, with a population just under three million, has yet to record any
coronavirus deaths, but has acted quickly to curb its spread, this week
banning travel from all countries, restricting social movement, and ordering
most people to work from home.

 

 

 

Algeria's annual inflation slips in February

ALGIERS (Reuters) - Algeria’s annual inflation fell to 1.8% in February from
1.9% in January due to lower prices for some foodstuffs, official data
showed on Saturday.

 

On a monthly basis, the consumer price index dropped by 0.6% in February,
the National Statistics Bureau said.

 

Prices for meat and poultry fell 3.6% while the cost of manufactured
products fell 1%, the data showed.

 

Algeria has imposed import restrictions on some goods, mainly foodstuffs, in
a bid to reduce spending after a fall in energy export earnings.

 

 

 

World Bank, IMF urge debt relief for poorer countries hit by coronavirus

WASHINGTON (Reuters) - The heads of the World Bank and International
Monetary Fund on Friday underscored the need to provide debt relief to
poorer countries hit by the coronavirus pandemic, and said official
bilateral creditors would have to play a major role.

 

The IMF and the World Bank have both launched emergency programs to offer
grants and loans to member countries, with a heavy focus on developing
countries and emerging markets, some of which are already in debt distress.
They have also called on official bilateral creditors to provide immediate
debt relief to the world’s poorest countries.

 

“Poorer countries will take the hardest hit, especially ones that were
already heavily indebted before the crisis,” the World Bank’s president,
David Malpass, told the International Monetary and Financial Committee, the
steering committee of the IMF.

 

“Many countries will need debt relief. This is the only way they can
concentrate any new resources on fighting the pandemic and its economic and
social consequences,” he said, according to a text of his remarks.

 

Malpass said the bank had emergency operations under way in 60 countries,
and its board was considering the first 25 projects valued at nearly $2
billion under a $14 billion fast-track facility to help fund immediate
health-care needs.

 

The World Bank was also working with 35 countries to redirect existing
resources to the pandemic, with almost $1 billion of those projects already
approved. Overall, the bank plans to spend $160 billion over the next 15
month, he said.

 

Malpass said the IMF and World Bank would present a joint plan for debt
relief at the institution’s virtual Spring Meetings in April, but gave no
details.

 

The poorest countries face official bilateral debt service payments of $14
billion in 2020, including interest and amortization payments, Malpass said,
of which less than $4 billion was owed to the United States and other Paris
Club members. China, a major creditor, is not a Paris Club member.

 

Given the large share of debt held by official bilateral creditors, Malpass
said it was critical to ensure their “broad and equitable participation” in
addressing the crisis.

 

The IMF’s managing director, Kristalina Georgieva, warned that half of the
low-income countries were already in “high debt distress” and much would
depend on the official creditors.

 

She said there were already discussions among the world’s 20 largest
economies, the Group of 20, and in the Paris Club, but there would also be a
role for private creditors, as was the case during the global financial
crisis of 2008-2009.

 

“The sooner we do it, the better,” she said. “The same way the fund during
the global financial crisis brought together both official creditors and
private creditors to assess a good pathway through a dramatic crisis, we
have to do it this time around as well.”

 

 

 

 

 

 

 

 

 


 

 


 

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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