Major International Business Headlines Brief::: 05 May 2020

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Major International Business Headlines Brief::: 05 May 2020

 


 

 


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ü  South Africa's Absa PMI falls, business activity crashes to all-time low

ü  Vodacom launches commercial 5G mobile network in South Africa

ü  Equites fund drops plan to build $69 mln mega-warehouse for retailer
Pepkor

ü  S.African banks' relief for virus-hit borrowers nears $800 million

ü   Nigeria bank layoffs barred as crisis hits economy

ü  S.Africa deputy finance minister urges central bank to print money to
fund gov't -report

ü  Algeria announces new cut in 2020 public spending

ü  South African Airways could shed staff from May 12 -rescue specialists

ü  S.Africa's Famous Brands reports marginal revenue due to lockdowns

ü  New UK car registrations fall by 97%

ü  US to borrow record $3tn as spending soars

ü  CEOs cutting salaries is mostly a 'publicity stunt'

ü  GE to cut up to quarter of its aviation staff

ü  Deloitte scraps summer internship scheme

 

 

 


 <mailto:info at bulls.co.zw> 

 


South Africa's Absa PMI falls, business activity crashes to all-time low

JOHANNESBURG (Reuters) - South Africa’s seasonally-adjusted Absa Purchasing
Managers’ Index (PMI) fell in April, with business activity contracting to
its lowest ever, as the coronavirus lockdown, now in its sixth week,
paralysed manufacturing activity.

 

The index, which gauges manufacturing activity in Africa’s most
industrialised economy, fell to 46.1 from 48.1 points in March. The business
activity measure fell to 5.1, its lowest on record.

 

A number of respondents said zero production took place during the lockdown.

 

The country has reported 6,336 cases of the coronavirus, with 123 deaths.
The government implemented a nationwide lockdown in late March, with
restrictions forcing businesses to close or operate at minimal capacity.

 

“The current reading is about 25 points below the lowest level recorded
during the global financial crisis, which suggests that the decline in
actual manufacturing output will be well in excess of the drop recorded at
the time,” Absa said in the release.

 

South Africa’s economy was already under strain before the novel coronavirus
struck, with growth in the last two quarters of 2019 shrinking by 0.8% and
1.4% respectively, mainly because of power cuts by ailing state utility
Eskom.

 

On Monday the head of the National Treasury said gross domestic product
(GDP) in 2020 could contract by as much as 12%, with manufacturing, mining
and services sectors likely taking the biggest hit.

 

President Cyril Ramaphosa last week followed up the announcement of a 500
billion rand ($26.62 billion) stimulus package with a plan to ease lockdown
restrictions that began on Friday.

 

Under the first phase of easing, only some sectors may restart operations,
and with limited staff and strict social distancing rules still in place.

 

“The PMI survey shows the immediate, devastating impact the lockdown had on
manufacturing output and overall demand,” Absa economist Miyelani Maluleke
said.

 

“While some easing of restrictions from May should aid a slow recovery in
coming months, a lot of manufacturing capacity will remain idle for some
time.”

 

($1 = 18.7834 rand)

 

 


 <mailto:info at bulls.co.zw> 

 


 

Vodacom launches commercial 5G mobile network in South Africa

JOHANNESBURG (Reuters) - Mobile operator Vodacom Group said on Monday it had
switched on Africa’s first live 5G mobile network in three cities in South
Africa, with further rollouts planned in other parts of the country.

 

Vodacom was recently assigned temporary additional spectrum by South
Africa’s telecoms regulator for the duration of a national state of disaster
to tackle the coronavirus pandemic, which has been used to fast track its 5G
launch, the company said in a statement.

 

Chief Executive Shameel Joosub said in February Vodacom expected to offer 5G
mobile services in South Africa this year by using a network being built by
another African operator, Liquid Telecom.

 

The deployment of 5G will help Vodacom manage the 40% increase in mobile
network traffic and the 250% increase in fixed traffic experienced during
the five-week long coronavirus lockdown, it said.

 

The lockdown has resulted in a spike in online activity, from video
conferencing to streaming movies.

 

The three cities are Johannesburg, Pretoria and Cape Town, Vodacom said,
adding the 5G network would support both mobile and fixed wireless services.

 

“Vodacom’s 5G launch in South Africa comes at an important time as it will
help us improve our network efficiency during the COVID-19 national state of
disaster,” Joosub said.

 

“This is largely due to the allocation of temporary spectrum by the
Independent Communications Authority of South Africa (ICASA) which has
already mitigated the network congestion we have experienced since the start
of the lockdown period.”

 

Fifth Generation (5G) spectrum is largely unassigned in South Africa. The
regulator, ICASA, has said it will auction additional spectrum, including
the highly sought after 5G spectrum, by the end of the year.

 

Vodacom expects to expand its 5G rollout as more 5G enabled smartphones,
Wi-Fi and fixed wireless access routers become available.

 

The company is currently selling the LG V50 5G smartphone and Huawei 5G CPE
PRO fixed wireless router.

 

 

 

Equites fund drops plan to build $69 mln mega-warehouse for retailer Pepkor

JOHANNESBURG (Reuters) - Equites Property Fund said on Monday it would not
proceed with a plan to build a 1.3 billion rand ($69.59 million) warehouse
for retailer Pepkor due to market disruptions resulting from the coronavirus
pandemic.

 

“The board of directors of Equites has resolved that, despite its strong
desire to partner with Pepkor in relation to the development, it would not
be prudent at this stage to proceed with the development on the originally
envisaged commercial terms,” it said in a statement.

 

The property firm added that it has nevertheless indicated to Pepkor that it
would like to continue its constructive engagement with the retailer “with a
view to possibly concluding a transaction once market conditions are more
conducive.”

 

Pepkor was not immediately available for comment.

 

In January Equites announced that it had been appointed by Pepkor to develop
a 122,734 square metre logistics facility on land situated in Hammarsdale,
KwaZulu-Natal province. [nJseT0043a]

 

($1 = 18.6799 rand)

 

 

S.African banks' relief for virus-hit borrowers nears $800 million

JOHANNESBURG (Reuters) - Major South African lender Absa said on Monday it
had agreed hundreds of millions of dollars in temporary repayment relief for
its borrowers, after the industry said 1.2 million people had applied for
help.

 

The impact of the lockdown on South Africa, a country of over 58 million,
mostly poor, people, is expected to be devastating: the economy had already
fallen into recession at the end of 2019, and official unemployment was at
close to 30%.

 

Absa, one of four biggest lenders, said more than 376,000 of its account
holders had applied for assistance and the bank would deliver 5.8 billion
rand of relief, such as repayment breaks or reductions in instalments, over
three months.

 

The Banking Association of South Africa (BASA) said the industry had already
implemented more than 15 billion rand ($798.03 million) in temporary
repayment help - with roughly half going to individuals and half to
businesses.

 

“The relief measures granted by banks do not envisage debt write-off, but
rather leniency in terms of the repayment of loans for a period,” it said at
the weekend, urging customers to meet obligations where possible.

 

Overall, 852,000 of more than 1.2 million people who had applied for banking
help had been successful while others were still being assessed, BASA said.

 

More than 90,000 commercial, small and medium-sized firms had also applied,
with 75,000 approved so far.

 

The vast majority of businesses are still shuttered to some degree more than
five weeks into a nationwide lockdown, and the economy is expected to shrink
by 5.8% this year.

 

The relief measures are only available to customers in distress directly as
a result of the impact of the coronavirus outbreak and considered in “good
standing” by their lender.

 

This means they need to have been up to date on their payments on Feb. 29,
2020 and have a good track record of paying their debts on time - not the
case for many struggling South African consumers and firms.

 

The government has also announced a 200 billion rand loan guarantee scheme
to encourage further lending by banks to virus-hit customers, but the full
details have yet to be announced.

 

($1 = 18.7963 rand)

 

 

 

Nigeria bank layoffs barred as crisis hits economy

ABUJA (Reuters) - Nigeria’s central bank has barred commercial lenders from
laying off staff as part of measures to minimise the impact of the
coronavirus pandemic on households and the economy.

 

The regulator said that was suspending lay-offs by banks and that commercial
lenders would need its approval in the event it becomes necessary to sack
workers.

 

Nigerian banks, which had previously only required central bank approval to
sack senior management and to shut branches, are analysing the impact of the
coronavirus crisis on their business, loan books and operating costs.

 

Some are considering forbearance on loans to help customers weather crisis,
banking sources told Reuters.

 

Access Bank, Nigeria’s largest lender, cut staff salaries and sacked
contract workers accounting for 75% of its 30,000 workforce to save costs,
banking sources told Reuters.

 

Africa’s largest economy relies for 90% of its foreign exchange on oil and
the price plunge triggered by the pandemic has hammered its currency and cut
government revenue.

 

Nigeria was already struggling to shake off the long-term impact of a 2016
recession before the coronavirus pandemic hit economies worldwide.

 

The central bank said in a statement released on Sunday that it discussed
the operating cost of banks in light of the disruption caused by the
pandemic and that its decision was made at a bankers committee.

 

The regulator, battling to stimulate the economy and curb inflation, has
kept banking system liquidity tight to lure foreign investors into treasury
securities to support the naira, which has hit new lows on the black market
in recent weeks.

 

Nigeria began easing restrictions on Monday in its capital Abuja and in
largest city Lagos, heralding the reopening of Africa’s most populous nation
after more than four weeks of coronavirus lockdown.

 

The government has said a stay-at-home order in place since March 30 in
Abuja and the states of Lagos and Ogun will be lifted gradually over a
six-week period.

 

Data from the statistics office on Monday showed that 40% of people in
Nigeria live in poverty, underlining the low levels of wealth in the West
African nation.

 

 

 

S.Africa deputy finance minister urges central bank to print money to fund
gov't -report

JOHANNESBURG (Reuters) - South Africa’s finance deputy minister was quoted
in a leading newspaper on Sunday as urging the central bank to temporarily
create money to fund the government response to the COVID-19 pandemic and
its economic fallout.

 

In an interview with the Sunday Times, David Masondo called on the
government to avert a 1930s-style depression by getting the central bank to
buy government bonds directly to fund the country’s deficit during the
coronavirus crisis.

 

“Such bonds must be once-off special bonds with earned proceeds, and should
be treated as a temporary measure with a clear exit plan,” he was quoted by
the paper as saying.

 

“Such money from the SARB (South African Reserve Bank) must be used for
immediate COVID-19 health-related interventions and ... economic recovery
measures,” he added.

 

Central bank spokeswoman Thoraya Pandy said the SARB “does not comment on
fiscal policy”.

 

“We will continue to deploy our tools or instruments, as appropriate and in
accordance with our mandate, to support the South African economy,” she
added in an emailed response.

 

President Cyril Ramaphosa last month announced a record 500 billion rand
($26.3 billion) rescue package equalling 10% of the GDP of Africa’s most
industrialized nation, to cushion the economic blow of the coronavirus
pandemic. Since then debate has stirred as to how it is to be funded.

 

Ramaphosa has approached the IMF and World Bank, a sensitive issue in a
government that has generally been hostile to the so-called Washington
consensus.

 

Masondo is a former youth leader of South Africa’s Communist Party, but
since Ramaphosa appointed him a year ago he has been a strong advocate of
tough economic reforms, including clamping down on excessive government
spending.

 

In an unprecedented move in March, the bank central did begin a programme of
buying back government bonds from the secondary market to inject liquidity
and prevent lending from seizing up.

 

But the idea of the central bank purchasing government debt directly to fund
the deficit would most likely cross a red line for Finance Minister Tito
Mboweni, a fiscal conservative who believes in central bank independence.

 

The government would also be keen to avoid a situation like neighbour
Zimbabwe, whose runaway money-printing to pay its bills triggered massive
hyperinflation a decade ago.

 

 

 

Algeria announces new cut in 2020 public spending

ALGIERS (Reuters) - OPEC member Algeria on Sunday announced a second cut in
2020 public spending in just over a month, increasing the reduction from 30%
to 50%.

 

The presidency made the announcement after a cabinet meeting chaired by
President Abdelmadjid Tebboune, with financial pressure mounting after a
sharp fall in energy earnings.

 

The North African country relies heavily on oil and gas revenue which has
been falling, hitting government’s economic and social plans.

 

The 2020 budget was approved by an interim government shortly before the
election of Tebboune in December last year to succeed Abdelaziz Bouteflika,
who resigned in April 2019 after pressure from the army and mass street
marches.

 

A drop in energy revenue in recent years has negatively impacted the
country’s budget and trade deficits as oil and gas export earnings account
for 60% of the state budget and 93% of total sales abroad.

 

The situation worsened further after the coronavirus outbreak when crude
prices crashed, pushing the government in March to reduce spending by 30%
and delay planned investment for this year in sectors including energy.

 

The reduction in expenditure is aimed at easing the impact for the next
months, with the government saying on Sunday it is expecting energy revenue
to fall to $20.6 billion, down from a $37.4 billion forecast announced early
this year.

 

It also said its current $60 billion foreign currency reserves will drop to
$44.2 billion by the end of 2020, below a previous forecast of $51.6
billion.

 

But despite the financial problems, the government has kept subsidies policy
unchanged to avoid social unrest after more than a year of protests
demanding political and economic reforms.

 

Algeria subsidies almost everything from basic foodstuffs to fuel, gas,
medicine and housing.

 

The government decided at Sunday’s cabinet meeting to increase the
guaranteed national minimum wage by 10% and scrap the total income tax for
employees whose salaries are equal or lower than 30,000 dinars ($238).

 

 

 

South African Airways could shed staff from May 12 -rescue specialists

JOHANNESBURG (Reuters) - South African Airways could start shedding its
5,000 staff from May 12 if unions and workers do not accept a proposed
severance deal, administrators trying to rescue the airline said on Sunday.

 

SAA entered a local form of bankruptcy protection in December in a last
ditch effort to either save or liquidate the national carrier, which has not
turned a profit since 2011.

 

The airline has been on state life support that has cost the South African
Treasury more than 20 billion rand ($1.06 billion) over the past three
years.

 

Rescue specialists Les Matuson and Siviwe Dongwana last month proposed
severance packages for all staff, after the government said SAA would
receive no more cash.

 

But the National Union of Metalworkers of South Africa and the South African
Cabin Crew Association, went to a labour court to try to block the cuts.
[nL8N2CJ3ZN]

 

“In the event that labour do not accept the agreement, the BRPs (business
rescue practitioners) reserve their rights to offer (it) ... to all
employees, regardless whether they belong to a union or not, for individual
acceptance,” between May 8 and May 11, the letter to staff reviewed by
Reuters said.

 

“Where agreements have not been reached, ... those employees’ employment may
be terminated for operational reasons on or after 12 May,” it added.

 

South Africa’s public enterprises ministry still wants to salvage a rump of
SAA in some form or other, although since the coronavirus pandemic ravaged
the global airline industry, it is not clear what that would amount to.

 

The rescue specialists added that they would oppose the application by the
two unions in court because “if successful, it would further contribute to
the financial and other challenges that SAA is facing.”

 

($1 = 18.8378 rand)

 

 

 

S.Africa's Famous Brands reports marginal revenue due to lockdowns

JOHANNESBURG (Reuters) - South Africa’s Famous Brands Ltd, owner of
restaurant chains including Steers and Wimpy, on Monday reported negligible
revenue for a period of five weeks as it gears up for the start of
delivery-only services in some markets.

 

The majority of its restaurants have been closed since mid-March, in line
with lockdowns implemented in South Africa, the rest of Africa and the
Middle East and the United Kingdom.

 

Its manufacturing and logistics operations have also been closed, with the
exception of some direct sales to the retail market and one manufacturing
plant with essential-supplier status which supplies potato products, it said
in a trading update statement.

 

On May 1, it said it had started reopening a limited number of restaurants
for delivery-only services in a phased programme.

 

In South Africa, it opened its Steers, Wimpy, Debonairs Pizza, Fishaways and
a few Wimpy and Mugg & Bean chains.

 

Its sit-in only restaurants will trial a few delivery-only services.

 

South Africa took its first shaky steps on Friday towards rolling back one
of the world’s strictest COVID-19 lockdowns, seeking a balance between
containing the disease and providing much-needed relief for the economy.

 

In the first phase, only some sectors may restart operations, and with
limited staff.

 

Restaurants, for example, can now resume business, but only for food
deliveries.

 

In the UK, GBK Restaurants Ltd started reinstating limited delivery services
in a few restaurants from April 29, while its restaurants in Angola,
Botswana, Ethiopia, Kenya, Malawi, Mauritius, Mozambique, Namibia, Nigeria,
UAE, Zambia and Zimbabwe continue to trade, albeit with limited services.

 

“While management is hopeful that these trading activities might provide a
much-needed boost to revenue and morale, the viability of this limited
delivery offering remains to be proved,” Famous Brands said.

 

 

 

New UK car registrations fall by 97%

New car registrations almost ground to a halt in April after coronavirus
lockdown measures were introduced, the motor industry has said.

 

Preliminary figures from industry body the SMMT indicate a 97% drop compared
with last year.

 

Only about 4,000 cars were registered, mainly for use by companies.

 

The temporary closure of car dealerships as part of measures to try to
combat the disease hit consumer registrations hard.

 

The Society for Motor Manufacturers and Traders (SMMT) said that of those
4,000 registrations, 70% were by companies buying for their fleets.

 

Many of those cars were needed to support key workers and for those who had
a pressing need for them, an SMMT spokesman said.

 

Those cars would not have been bought from dealerships, but instead, for
example, from wholesalers, or directly from manufacturers.

 

The 4,000 figure for April is a very large drop from the 161,064 new cars
that were registered in April 2019.

 

The industry body said it now expects 1.68 million new car registrations in
2020 compared with 2.3 million in 2019.

 

The coronavirus crisis has come at what was already a difficult time for the
motor industry, which had been struggling with falling sales and a collapse
in demand for diesel vehicles, while struggling to meet tough new emissions
targets.

 

The figures are certainly dramatic, expected to be the lowest sales since
February 1946.

 

But since virtually the entire motor industry ground to a halt when the
lockdown was introduced, they are not entirely unexpected.

 

What matters now is what happens when the restrictions are eased and
customers are allowed back into the showrooms.

 

You would expect there to be some pent-up demand - after all, dealerships
began to close in mid-March, traditionally one of the strongest months of
the year for new car sales.

 

However, since then harsh economic realities have come into play. Huge
swathes of the workforce have been furloughed, and the signs are the country
is heading into a deep recession.

 

Under those circumstances, with so much uncertainty and so many jobs at
risk, how many people will really be willing to buy a new car?

 

We can expect a wave of incentive programmes - and quite possibly a wave of
new scrappage schemes - as car companies start fighting tooth and nail for
every single sale.

 

The coronavirus outbreak also halted car production.

 

All of the UK's major car factories suspended work in March, and it is not
yet clear when they will reopen.

 

Ian Plummer, commercial director at online marketplace Auto Trader, said:
"With retailers forced to close the doors to their physical forecourts,
it'll come as no surprise to anyone to see just how dramatic an impact it's
had on the new car market.

 

"Some brands have been able to sell remotely, but uncertainty in the
government's guidelines or a lack of the required infrastructure to operate
home delivery in a safe way, has limited it to all but a handful of
retailers."

 

However, he said Auto Trader data indicated that the market had been paused,
rather than stopped.

 

He added that there would be a chance "for the industry to accelerate the
adoption of low emission vehicles" when restrictions lift.

 

"However, it'll be essential for manufacturers to push more electric
vehicles into their UK networks along with greater financial incentives,"
such as scrappage schemes, he said.--BBC

 

 

 

US to borrow record $3tn as spending soars

The US has said it wants to borrow a record $3tn (£2.4tn) in the second
quarter, as coronavirus-related rescue packages blow up the budget.

 

The sum is more than five times the previous quarterly record, set at the
height of the 2008 financial crisis.

 

In all of 2019, the country borrowed $1.28tn. The US has approved about $3tn
in virus-related relief, including health funding and direct payouts.

 

Total US government debt is now near $25tn.

 

The latest spending packages are estimated to be worth about 14% of the
country's economy. The government has also extended the annual 15 April
deadline for tax payments, adding to the cash crunch.

 

The new borrowing estimate is more than $3tn above the government's previous
estimate, a sign of the impact of the new programmes.

 

The Fed's four radical moves to save the economy

Does the US debt of $20tn matter?

Discussions are under way over further assistance, though some Republicans
have expressed concerns about the impact of more spending on the country's
skyrocketing national debt.

 

The US borrows by selling government bonds. It has historically enjoyed
relatively low interest rates since its debt is viewed as relatively
low-risk by investors around the world.

 

But even before the coronavirus, the country's debt load had been climbing
toward levels many economists consider risky for long-term growth, as the
country spent more than it took in.

 

The US Congressional Budget Office last month predicted the budget deficit
would hit $3.7tn this year, while the national debt soared above 100% of
GDP.

 

Last week, the chair of America's central bank, Jerome Powell, said he would
have liked to see the US government's books be in better shape before the
pandemic.

 

However, he said spending now was essential to cushion the economic blow, as
orders to shut businesses to slow the spread of the virus cost at least 30
million people their jobs.

 

"It may well be that the economy will need more help from all of us if the
recovery is to be a robust one," he said.

 

 

Media captionArmel Omatoko has moved his dance classes online so people can
stay involved during lockdown.

As part of its own relief efforts, the Federal Reserve has bought more than
$1tn in treasuries in recent weeks.

 

Investors from foreign countries are also historically significant holders
of US debt, with Japan, China and the UK at the top of the pack as of
February.

 

Increased tensions between the US and China in recent years have renewed
scrutiny of America's debt position. According to the Washington Post last
week, Trump administration officials had discussed cancelling debt
obligations to China, but US President Donald Trump reportedly played down
the idea, saying "you start playing those games and it's tough".

 

For now, continued low rates suggest investor appetite for US debt remains,
allowing for a borrowing increase, Alan Blinder, a professor of economics
and public affairs at Princeton University, told the BBC last month.

 

"So far, the answer has been everything is fine, as to how much borrowing
the United States government can do before investors start to feel satiated
with US debt," he said. "But there is a legitimate question."--BBC

 

 

 

CEOs cutting salaries is mostly a 'publicity stunt'

Many high-profile chief executives who have announced salary cuts during the
coronavirus downturn may not lose out.

 

Salaries are typically only a fraction of an executive's overall pay
package, with bonuses and shares making up the bulk.

 

Critics say such announcements are often publicity stunts to earn goodwill
among the public.

 

They also argue chief executives benefit directly if the share price rises
as a result of the gesture.

 

Among the most high-profile to announce a cutback is Disney chairman Bob
Iger who earned $3m (£2.4m) in basic salary last year.

 

However, this base salary was only a fraction of his $47.5m total package.
The remainder was made up of a $21.8m bonus, stocks and other benefits.

 

Mr Iger, who is worth more than $690m according to Forbes, said he will give
up all his salary while the crisis lasts.

 

"When wealthy CEOs take cuts to their salaries, I want to believe that
they're sincere about doing their part. Unfortunately, the more I look into
these matters, it's merely a public relations show," said Jack Kelly,
founder and chief executive of a New York-based recruitment firm.

 

Others who have said they will take salary cuts include Arne Sorenson, chief
executive of the world's biggest hotel chain, Marriott. Mr Sorenson's basic
salary was $1.3m last year, but his overall compensation was $13.4m.

 

United Airlines' chief executive Oscar Munoz announced he will waive 100% of
his base salary until at least the end of June. For 2019, his wages were
$1.25m, but this was only 10% of his total remuneration package.

 

Both airlines and hotels have been hit hard by the coronavirus downturn and
hundreds of thousands of jobs are at risk.

 

Goodwill benefit

Chief executives are typically given free shares in the company as part of
their remuneration package. When the company's share price goes up, their
personal wealth also goes up.

 

"Announcing you will take a salary cut will buy you a lot of goodwill and
hopefully raise the company's stock price. Because the CEO's bonus is often
linked to the share price as well, they will not lose money by giving up
some of their salary." said Sumit Agarwal, an economics professor at the
National University of Singapore (NUS).

 

This goodwill boost can also extend to employees when it comes to layoffs.
"When they cutback staff they can say they are making sacrifices personally
too," added Mr Argawal. "It's all a bit of a publicity stunt."

 

Other business experts look more favourably on the salary sacrifices.
"Sacrificing cash salary can reduce the number of workers that needs to be
furloughed," said Alex Edmans at the London Business School.

 

Xavier Baeten, Professor in Reward and Sustainability at the Vlerick
Business School in Belgium, said such gestures "also shows solidarity with
the employees, who also suffer from pay cuts" but added that "it should be a
genuine expression of the company's social responsiveness."

 

HR consultant Emily Draycott-Jones advised: "There's a lot of respect for
leaders doing this quietly and discretely and an awful lot of frustration
when it's a publicity stunt."--BBC

 

 

 

GE to cut up to quarter of its aviation staff

General Electric will cut up to a quarter of its aviation business staff as
demand for air travel plunges due to the coronavirus pandemic.

 

The firm had already announced a 10% cut to its US aviation workforce but it
said "more is required".

 

The plans are the latest sign that the air travel industry is preparing for
a prolonged travel slowdown.

 

Manufacturing giant Boeing, as well as airlines such as British Airways,
have also announced significant cuts.

 

Boeing last week said it planned to reduce its global workforce by 10% or
16,000 jobs, while British Airways' parent company IAG said it would slash
12,000 positions.

 

The potential 13,000 job cuts at GE Aviation, which makes jet engines for
companies such as Boeing and Airbus and employs about 52,000 people in 19
countries worldwide, comes shortly after the unit revealed profits had
fallen roughly 40% in the three months to March.

 

They are part of a wider $3bn (£2,4bn) cost-saving effort, as the industry
warns of an 80% drop in global air travel this quarter.

 

"As this pandemic continues to advance, our understanding of its impact on
our industry and our business has also evolved," GE Aviation President David
Joyce said in a message to staff. "Unfortunately more is required as we
scale the business to the realities of our commercial market".

 

"While extremely difficult, I am confident this is the required response to
the continued contraction of the industry and its protracted recovery."

 

General Electric last week told investors it had suffered a $1bn hit to its
business due to the pandemic, which had driven down overall quarterly
revenues 8%. Cuts elsewhere at the company include 700 staff and 1,300
contractors in its power division.-BBC

 

 

 

Deloitte scraps summer internship scheme

"Big four" accountancy firm Deloitte has scrapped its summer internship
scheme for students as it looks to cut costs during the coronavirus crisis.

 

Candidates will be handed a £500 "goodwill payment", which is a sixth of the
amount some would have earned over the summer.

 

Instead, the 350 university students who were offered a place on the scheme
will be able to join an online training programme.

 

Deloitte said safety was its priority.

 

"In light of the ongoing Covid-19 pandemic, we are inviting students who
were due to take part in the firm's summer vacation scheme to take part in a
voluntary four-week virtual mentorship programme instead," the accountancy
firm said in a statement.

 

Pay cuts

Last month, the head of Deloitte in the UK told staff that partners at the
firm would have their pay cut by about a fifth.

 

In a blog, Richard Houston said there would be no annual salary increases,
while bonuses would be slashed and put back to later in the year.

 

"As part of this package of actions, partner annual earnings are expected to
decline by around 20% and we have deferred profit distributions," he said,
adding that the moves were the right thing to do to "protect jobs and our
business for the foreseeable future".

 

The firm also offered staff the option to reduce their working hours. Rivals
EY, PwC and BDO have also cut some salaries.

 

Candidates on the summer programme were told of Deloitte's plan to scrap the
scheme during a webinar.

 

The internship typically lasts between two and six weeks, depending on which
part of the firm candidates join.

 

It is designed for students on undergraduate courses or those about to start
a master's degree.

 

Deloitte gave some details of the four-week online course on offer.

 

"Undergraduate students will be given a mentor throughout the programme and
the opportunity to work alongside Deloitte employees, develop their skills
and learn more about a career at Deloitte," a spokeswoman said.

 

Rival PwC told the BBC that 400 undergraduate students who were due to join
its internship programme over the summer had been offered a guaranteed
position on its graduate training programme, starting in autumn 2021.

 

"This means these students will enter their final year of university knowing
that they have a guaranteed job at the end of their studies, in what could
be a challenging environment for new graduates," a spokeswoman said.--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
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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
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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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