Major International Business Headlines Brief::: 06 May 2020

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Major International Business Headlines Brief::: 06 May 2020

 


 

 


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

 


 

 


 

 

ü  Nigeria's government expects economy to contract by 3.4% in 2020

ü  Nigeria amending 2020 budget assuming oil at $20 per barrel -finance minister

ü  South Africa's revenue shortfall to reach $15 billion due to coronavirus - tax commissioner

ü  Total told it cannot acquire Anadarko Algeria assets

ü  South African airline Comair enters business rescue

ü  South Africa's rand recovers in global emerging market bounce

ü  Egypt's 2020/21 budget deficit could widen to 7.8% of GDP due to coronavirus

ü  Amplats completes repair to processing plant unit after blast

ü  Sudan sets up bourse for gold as opens up market

ü  Disney suffers $1.4bn hit due to coronavirus

ü  Lockdown and loaded: virus triggers video game boost

ü  Coronavirus: Firms ready to restart within three weeks

ü  Coronavirus: Spirits firm turns to hand sanitisers after sales evaporate

ü  Coronavirus: Can live-streaming save China's economy?

ü  Coronavirus: Virgin Atlantic to cut 3,000 jobs and quit Gatwick

ü  Air fares face turbulence when flights slowly restart

 

 

 


 <mailto:info at bulls.co.zw> 

 


Nigeria's government expects economy to contract by 3.4% in 2020

LAGOS (Reuters) - Nigeria’s economy is projected to contract by 3.4%, government officials said on Tuesday, as dwindling oil revenues and the new coronavirus forced the country to cut budget plans for a second time to assume a lower petroleum price of $20 per barrel.

 

The West African country, which emerged from a recession in 2017, was already contending with low growth of around 2% before oil prices plummeted. Africa’s top oil exporter relies on crude oil sales for around 90% of foreign exchange earnings and more than half of government revenue.

 

With global oil prices plunging, Finance Minister Zainab Ahmed said in March that this year’s record 10.59 trillion naira ($29.42 billion) budget would be cut by about 15%.

 

At the time, she said the initial assumed oil price of $57 per barrel would be reduced to a worst case scenario of $30 per barrel.

 

But on Tuesday, she said that benchmark would again have to be revised down.

 

“We are in the process of an amendment that is bringing down the revenue indicator to $20 per barrel,” Ahmed said in a web conference about the impact of low oil prices on the country.

 

Budget revisions need to be approved by lawmakers before being signed into law by the president.

 

Ahmed also said Nigerian oil and gas projects will be “delivered much later than originally planned” due to upstream budget cuts.

 

Nigeria’s economy has been battered by low oil prices following a dispute between Russia and Saudi Arabia.

 

It also plans to cut oil production to 1.7 million barrels per day (mbpd), from the 2.1 mbpd initially proposed in the budget, under an agreement brokered by the Organization of the Petroleum Exporting Countries (OPEC).

 

Ben Akabueze, budget office director general, said oil revenues were expected to fall by more than 80%. He said the government had revised its projections and expected the economy to contract by 3.4% this year compared with its previous expectation that it would grow by 2.9%.

 

Nigeria would speed up marginal field licensing and oil mining licence renewals to try to raise revenues, Akabueze said.

 

The government officials on the call discussed the issue of Nigeria’s debt servicing costs, a week after the country shelved plans to borrow 850 billion naira ($2.36 billion) from international markets and instead tap domestic markets to finance the budget.

 

The finance minister said Nigeria is in talks to defer debt service obligations to “2021 and beyond”.

 

“It’s not debt forgiveness, it’s just rescheduling of our obligations,” said Ahmed, with regards to talks with lenders.

 

She did not provide details of the lenders with whom talks were held. Ahmed said Nigeria was spending around 58% to 60% of revenues to service debt, which was responsible for the request.

 

And the budget office director general said debt servicing costs were expected to rise by 200 billion naira in 2020.

 

The impact of low oil prices has been compounded by shockwaves caused by the new coronavirus pandemic.

 

Africa’s most populous country recorded its first confirmed coronavirus case in late February. There have been 2,802 recorded cases and 93 deaths out of 200 million inhabitants.

 

Lockdown restrictions were eased on Monday in Lagos, the country’s economic hub, and the capital, Abuja. It marked the reopening of the economy after more than four weeks of lockdowns - despite the number of confirmed cases having roughly doubled in the last week.

 

($1 = 360.0000 naira)

 

 


 <mailto:info at bulls.co.zw> 

 


 

Nigeria amending 2020 budget assuming oil at $20 per barrel -finance minister

LAGOS (Reuters) - Nigeria’s government is amending its 2020 budget to assume an oil price of $20 per barrel, Finance Minister Zainab Ahmed said on Tuesday.

 

Nigeria’s economy, which emerged from a recession in 2017, was already contending with low growth of around 2% before oil prices plummeted. Africa’s top oil exporter relies on crude sales for around 90% of foreign exchange earnings and more than half of government revenue.

 

Global crude oil prices have plummeted in the last few months. In March, the finance minister said the budget would be cut and the initial assumed oil price of $57 per barrel would be reduced.

 

“We are in the process of an amendment that is bringing down the revenue indicator to $20 per barrel,” said Ahmed in a web conference about the impact of low oil prices on the country.

 

Ahmed also said Nigerian oil and gas projects will be “delivered much later than originally planned” due to upstream budget cuts.

 

Nigeria’s economy has been battered by low oil prices following a dispute between Russia and Saudi Arabia, as well as the impact of the new coronavirus pandemic.

 

Africa’s most populous country recorded its first confirmed coronavirus case in late February. There have been 2,802 recorded cases and 93 deaths out of 200 million inhabitants.

 

 

 

 

South Africa's revenue shortfall to reach $15 billion due to coronavirus - tax commissioner

CAPE TOWN (Reuters) - South Africa’s tax revenue losses due to the coronavirus impact and credit ratings downgrades could amount to as much as 285 billion rand ($15.5 billion) in the current fiscal year, the commissioner of the revenue services said on Tuesday.

 

“Whilst it is early days, revenue losses could be anywhere between peaking at between 15 and 20 percent lower and that translates into a revenue loss of up to 285 billion (rand),” commissioner Edward Kieswetter told a parliamentary briefing.

 

($1 = 18.4082 rand)

 

 

 

Total told it cannot acquire Anadarko Algeria assets

PARIS (Reuters) - Energy major Total has been told by Occidental that it cannot acquire oil and gas assets in Algeria that were part of an $8.8 billion deal reached by the companies on Anadarko’s assets in Africa.

 

“Occidental officially told us that we cannot acquire the Algeria assets,” the French company’s CEO Patrick Pouyanne told analysts during a conference call after its first quarter 2020 results.

 

“It releases part of the acquisition budget,” Pouyanne said.

 

As part of its cash-raising to fund its purchase of Anadarko, Occidental agreed with Total that Total would take over some of Anadarko’s assets.

 

The Anadarko assets in are in Algeria, Ghana, Mozambique and South Africa. The deal in Mozambique, which includes a giant LNG project has been concluded.

 

Algerian authorities had moved to block Total’s acquisition of the assets.

 

Pouyanne told analysts the decision was based on the objection of Algiers, and Occidental will remain as operator unless it can find a way to sell it to Total.

 

On the assets in Ghana, Pouyanne said things were moving on with the deal, but declined to comment further.

 

 

 

South African airline Comair enters business rescue

JOHANNESBURG (Reuters) - Comair said on Tuesday that it has entered voluntary business rescue - South Africa’s bankruptcy protection process - after a nationwide lockdown to curb the spread of the coronavirus forced airlines to suspend all commercial flights.

 

Comair, which operates the British Airways franchise in South Africa and owns budget airline Kulula, is the first local airline to file for business rescue as a result of the coronavirus.

 

It joins embattled state-owned South African Airways (SAA), which filed in December, while state-owned SA Express was placed under “provisional liquidation” on Tuesday by a court after the airline’s administrators said rescue efforts that began in February weren’t likely to succeed.

 

Comair Chief Executive Wrenelle Stander, said the firm, which reported a half-year loss of 564 million rand ($30.73 million) in February, faced an unprecedented situation following the five-week-long coronavirus lockdown, which was partially lifted from May 1.

 

Stander said the only responsible decision in response to the travel restrictions is to apply for bankruptcy protection.

 

“Now that the phased lockdown has been extended, the grounding is likely to endure until October or even November. These extraordinary circumstances have completely eroded our revenue base while we are still obliged to meet fixed overhead costs,” he said in a statement.

 

The airline was granted approval to suspend the trading of its shares on the Johannesburg Stock Exchange with immediate effect.

 

($1 = 18.3562 rand)

 

 

 

South Africa's rand recovers in global emerging market bounce

JOHANNESBURG (Reuters) - South Africa’s rand rose early on Tuesday, shaking off a batch of bad data to gain more than 1% as global risk appetite was lifted by further easing of COVID-19 lockdown restrictions.

 

At 0715 GMT the rand was 1.07% firmer at 18.3720 per dollar versus an overnight close of 18.5710.

 

“There is some cautious risk appetite this morning on further lockdown easing and opening up of economic activity around the world, offsetting the Sino-U.S. tensions,” said Andre Botha, senior dealer at TreasuryONE.

 

On Monday, data showed South Africa’s business activity contracted to its lowest ever in April, as the coronavirus lockdown, now in its sixth week, paralysed manufacturing, while new cars sales also plunged.

 

But a rebound in risk demand, also helped by firming oil prices, has seen emerging market currencies recover.

 

U.S. crude rose 6.6% and Brent around 5% as production fell and countries around the globe including Italy, Finland and several U.S. states relaxed lockdowns. [O/R]

 

Bonds rallied, with the yield on the 10-year South African government paper falling 14 basis points to 10.060%

 

Stocks also opened higher, with the Johannesburg Stock Exchange’s top 40 index up 0.89% at 45,658 points.

 

 

 

Egypt's 2020/21 budget deficit could widen to 7.8% of GDP due to coronavirus

CAIRO (Reuters) - Egypt’s budget deficit for the financial year that will begin in July will widen to 7.8% of gross domestic product from a previously projected 6.2% if the coronavirus crisis continues until the end of December, the finance minister said on Tuesday.

 

The government had projected a primary surplus of 2.0% before the crisis hit, but this would fall to only 0.6% should the crisis continue, Mohamed Maait said at a planning committee meeting at parliament.

 

 

 

Amplats completes repair to processing plant unit after blast

JOHANNESBURG (Reuters) - Anglo American Platinum (Amplats) said on Tuesday it had completed repairs to one unit at its Anglo Converter Plant and would lift its force majeure to suppliers of concentrate, three months after a blast shut processing facilities.

 

The Johannesburg-listed miner said it expected the Anglo Converter Plant and full downstream processing operations to be fully operational at its Phase B unit from May 12, while repairs would continue at its Phase A unit.

 

The damage to the processing facilities forced Amplats, one of the world’s largest platinum producers, to declare force majeure and cut its production outlook.

 

“As we complete the ramp-up, we are engaging with suppliers of concentrate to lift force majeure imminently. All temporary commercial arrangements applicable during the force majeure period will revert to normal commercial terms,” Anglo American Platinum CEO Natascha Viljoen said.

 

Amplats said the force majeure notice would remain for the time being for its refined metal customers due to the time taken to refine the respective platinum group and base metals.

 

 

Sudan sets up bourse for gold as opens up market

KHARTOUM (Reuters) - Sudan, Africa’s third biggest gold producer, is setting up a bourse for the precious metal and will standardize the price in accordance with the global rate, Sudanese Prime Minister Abdalla Hamdok said in a statement on Monday.

 

In January, Sudan started allowing private traders to export gold, a measure designed to crack down on smuggling and attract foreign currency into the country’s cash-strapped treasury.

 

Before the new regulations, the central bank bought gold at a discount to the international price. As a result, an estimated 70-80% of it was smuggled abroad, according to government officials, hurting the treasury’s coffers.

 

Sudan produced an estimated 93 tons of gold in 2018, which would make it Africa’s third biggest producer after South Africa and Ghana, according to the U.S. Geological Survey.

 

Sudan is also setting up an investment fund for the private sector donations, the statement added.

 

 

The African country’s struggling economy has not revived with the overthrow of long-time autocrat Omar al-Bashir a year ago.

 

The transitional government has been trying to overcome shortages of imported - and heavily subsidised - fuel and flour. Inflation is running at more than 80%, according to official statistics.

 

In crisis since losing most of its oil wealth with the secession of the south in 2011, the country has experienced an acute shortage of foreign currency. The dollar rose to almost twice the official rate against the Sudanese pound on the black market this week.

 

 

 

Disney suffers $1.4bn hit due to coronavirus

Walt Disney Co suffered a $1.4bn (£1.1bn) hit to profits in the first three months of the year, as it closed its parks, cancelled movie releases and reduced advertising sales.

 

Every part of its business was affected by coronavirus, nearly wiping out profits for the quarter.

 

Disney chairman Bob Iger said the firm was facing "unprecedented" challenges but he was confident of recovery.

 

The firm is already planning to open its Shanghai park on 11 May.

 

Chief executive Bob Chapek said the company would take a "phased approach", requiring advance reservations to limit attendance.

 

It said it would require health measures, such as masks and temperature checks.

 

"We are seeing encouraging signs of gradual return to some semblance of normalcy in China," he said.

 

"While it's too early to predict when we'll be able to begin resuming all of our operations, we are evaluating a number of different scenarios to ensure a cautious, sensible and deliberate approach to the eventual reopening of our parks."

 

Pent-up demand?

The parks and cruise division has been a reliable profit driver for Disney in recent years, as the firm's giant media business tries to adapt to online competition and declines in paid-TV subscriptions and movie theatre attendance.

 

But the parks business was hammered by the closings, accounting for $1bn of the $1.4bn hit to operating income, as the firm shut its parks in Shanghai and Hong Kong in January, in Tokyo in February and in the US and France in March. Its cruise lines have also suspended operations.

 

Mr Chapek said he thought there was enough pent-up demand that people would come once the firm does re-open in a limited way. But outside of Shanghai, executives warned that the timing of re-opening remains unclear.

 

The firm's advertising business - which supports its television output - is also seeing significant declines, as companies slash marketing budgets and a lack of live sports reduces viewers on Disney's ESPN sports channel.

 

'Ups and downs'

Disney last year launched a new streaming service, Disney+, which had attracted 54.5 million subscribers as of 4 May - up from about 50 million on 8 April. But it remains loss-making.

 

The direct-to-consumer and international unit, which includes Disney+, posted a loss of $812m in the quarter.

 

"It's difficult to think of a company which better illustrates the ups and downs of the coronavirus outbreak and its effect on companies," said Nicholas Hyett, equity analyst at Hargreaves Lansdown. "While we think the business ... has one of the best asset bases of any listed company ... the damage the current crisis will do remains unclear."

 

Disney said it was taking numerous steps to shore up its finances, including reducing capital investment plans by $900m and suspending a planned dividend payment.

 

Last month, it stopped paying nearly half of its workforce, furloughing more than 100,000 employees, many of them park and hotel workers.

 

Quarterly revenues were up 21% year-on-year at $18bn - beating analyst expectations. But profits fell to $460m from $5.4bn in the prior year, a 91% drop.

 

"I have no doubt that we will get through this but it will take some time," Disney chairman Bob Iger said--bbc

 

 

 

Lockdown and loaded: virus triggers video game boost

Two of the biggest names in video gaming have seen demand jump as virus lockdowns force people to stay at home.

 

The makers of popular games Call of Duty (COD) and FIFA say player numbers have soared during the pandemic.

 

That's boosted the financial performance at Activision Blizzard and Electronic Arts for the first three months of this year.

 

The gaming industry has seen sales hit records in recent weeks as more people turn to their entertainment services.

 

Activision Blizzard, the company behind the COD series, said an average of 407 million people had played its games online each month in the first quarter of this year.

 

Meanwhile, the latest COD game 'Warzone' has racked up more than 60 million players since its launch in March.

 

The company also said use of its Overwatch and World of Warcraft games had continued to climb, and the smartphone game Candy Crush has held its place as the highest-grossing franchise in American app stores.

 

That helped push Activision Blizzard's net revenues from digital channels to $1.44bn (£1.16bn).

 

Activision Blizzard's chief executive Bobby Kotick said: "In the face of so many difficulties, our employees have made certain that the joy, the engagement, and the benefits of gaming remain an effective way to help keep our 400 million players around the world connected and safe."

 

Rival gaming giant Electronic Arts said the latest edition in its FIFA football franchise has attracted more than 25 million players.

 

At the same time American football game 'Madden NFL 20' scored the highest online engagement numbers in the franchise's history.

 

The company also saw user numbers for its newly-released 'Star Wars Jedi: Fallen Order' notch up 10 million users.

 

Electronic Arts said its net income had doubled to $418m on revenue that rose to $1.4bn in the first three months of the year.

 

"We're humbled to see people around the world connecting through our games during this unprecedented period," chief executive Andrew Wilson said in the company's earnings release.

 

Gaming has seen a huge boost this year as hundreds of millions of people have been forced to stay at home due to measures to slow the spread of Covid-19.

 

Industry giants ranging from Microsoft to Steam have all reported major increases in user numbers, with US video game sales hitting the highest level in over a decade in March.

 

Analysts expect demand to remain strong while stay-at-home orders remain in place.--bbc

 

 

 

Coronavirus: Firms ready to restart within three weeks

Are employees prepared for the return to work?

Most firms reckon they could be ready to restart business with just three weeks' notice.

 

That's according to the latest British Chambers of Commerce Coronavirus Business Impact Tracker.

 

The BBC talked to companies in five different sectors to find out how prepared they are to return work and their new ways of doing business.

 

Some are rotating staff. Others have introduced remote services or plan to shut the office altogether.

 

"Businesses' ability to restart quickly varies by company size and by sector," said BCC director general Dr Adam Marshall.

 

The survey suggests that businesses that offer services to other business are the most ready, with two-thirds saying they would need less than one week or no notice at all to restart operations.

 

Fewer than half of firms serving consumers said they were confident of being ready that quickly.

 

"It will be crucial for the government to maintain and evolve support for businesses, to give as many firms as possible the chance to navigate a phased return to work," said Dr Marshall.

 

Here, we talk to five different types of firms - office, construction, restaurant, factory and shop - to see what changes they're making.

 

"We're not going to return to office working. We will close it as soon as the lease runs out," says Shai Arahoney, chief executive of Reboot Digital Marketing.

 

"It will save us around 10% of our turnover and means we'll cut down on fuel, pollution and all the other surrounding costs associated with having an office."

 

The Hertfordshire-based business, which employs 20 people, has found that working from home suits its workers.

 

"It's a major change for us. But I don't think that things are going to go back to normal. A lot of companies are going to have to evolve rapidly if they want to survive."

 

However, they'll still need to get together regularly, says Mr Arahoney.

 

"We have a brainstorming session every two weeks that is key to our business.

 

"In future, we'll do it at a local hotel. We'll brainstorm and do all the other tasks that are more efficiently done face-to-face and then go out as a company."

 

"All our site workers will have to do their health and safety inductions at home," says Andrew Brooks, boss of housebuilder Bewley Homes.

 

Inductions are normally done on site in groups, which is not possible right now.

 

"Importantly, it makes sure they know everything to follow the new regulations. The old way of inducting 10 people in a small room has long gone."

 

Signing into a site has also had to go digital. "Sharing a pen, punching into a tablet or fingerprint scans are no longer options," Mr Brooks says. The builder is adopting digital sign-ins.

 

Nearly every aspect of construction site life has changed, if not forever, then certainly for the next few months, he says.

 

"There's a huge logistical challenge to get 400 workers back on site at once and it needs methodical planning," he says.

 

"It's not just getting subcontractors to respect the two-metre rule plot-by-plot and to navigate around the entire site, there are also all the new on-site safety measures to put in place."

 

"I've had to develop new dishes that travel," says Dev Biswal, owner of the Ambrette, three fine dining Indian restaurants in Canterbury and Margate.

 

"I've never offered takeaways, because my style of cooking and presentation could never survive transportation."

 

But like many other businesses, he's had to adapt to survive.

 

He's now planning to open a "dark kitchen", which will offer multi-cuisine, takeaway gourmet dishes, such as slow goat stroganoff or coconut and saffron cheesecake, through Deliveroo.

 

He's also moving his cookery classes online and set up an ingredient delivery service.

 

He says the crisis has forced him to accelerate plans to introduce deliveries.

 

"I've read industry reports which all predict significant growth for the delivery market, so it's something I'd been giving serious thought to for some time," says Mr Biswal.

 

"The crash in footfall surrounding the media panic around Covid-19 means I've had to bring those plans forward."

 

"We've moved our on-site laboratories to operate in completely separated shifts," says Lee Sheppard, director at Wiltshire-based caterer Apetito.

 

The company - which supplies food to the health and social care sector - has introduced a number of social distancing measures to ensure the safety of workers at its Trowbridge factory.

 

These include glass partitions in its production kitchen and individual tables, placed two metres apart in its team canteen, while the numbers of those that can enter have been reduced.

 

Its offices remain closed, with team members now working from home, but the company is considering a rotation scheme which would limit numbers of people in the office at one time.

 

"We already had a flexible policy with working from home, but we're exploring the idea of staff working one week in the office and one week from home."

 

Meanwhile, its delivery teams are following a default no-contact delivery policy.

 

"We've been exploring remote alternatives to our traditional in-person appointments," says Giles Edmonds, clinical services director at Specsavers.

 

"Our stores are currently only able to offer urgent and essential care to a limited number of customers."

 

The new way of doing business is to allow customers to get advice and care from optometrists and audiologists via video and telephone link.

 

"It removes a number of barriers, especially with health services already under immense pressure," says Mr Edmonds.

 

They also have an Ask The Expert service on Facebook, while in branches, "frontline" teams provide urgent  and  essential eye care to other key workers and people who  could come to harm.

 

"However, we have modified our processes to minimise the time that optometrists or audiologists and their patients are in proximity to each other."

 

That's on top of a range of social distancing measures and the provision of hand sanitisers, which all retailers have adopted.--bbc

 

 

 

Coronavirus: Spirits firm turns to hand sanitisers after sales evaporate

After sales of its specialist booze started slipping, a Cotswolds spirits company turned to making hand sanitisers to keep the money coming in.

 

The British Honey Company has made £500,000 from sales of its alcohol sanitiser since its end-of-March launch.

 

The cash "more than offset the decline in revenues from the company's core product", it said.

 

"Sales... have been exceptional," said chief executive Michael Williams.

 

The company makes a range of honey and fruit-infused spirits, such as Keepr's Gin.

 

They are sold through specialist online retailers and hotel chains, but sales have fallen since lockdown as customers remain indoors or buy booze through supermarkets.

 

It spotted the trend early in the coronavirus crisis and applied for permission from HMRC to use excess capacity at its Buckinghamshire distillery to produce the alcohol sanitiser, made with 70% alcohol and extracts of British honey and green tea.

 

Clear opportunity

"Very early on during the Covid-19 outbreak we identified a clear opportunity for the company to move into the production of alcohol-based sanitisers, to meet exceptional demand and supply shortages, given the basic ingredient is the same as for our infused spirit brands," said Michael Williams.

 

He said sales had "exceeded expectations".

 

The firm - which listed as a public company in March - will focus current production capacity on its Drip+Drop sanitiser in the short to medium term while demand remains high.

 

Mr Williams warned that problems in the alcohol supply chain were starting to emerge.

 

The company has responded by "ring-fencing" enough alcohol in its bonded warehouse to meet anticipated demand for its alcohol sanitiser and infused spirits products until at least the end of the calendar year, including the Christmas period, the peak time for spirit sales.

 

Sanitising production

A number of drinks firms have switched to producing hand sanitiser during the coronavirus crisis.

 

William Grant & Sons, better known for its whisky, has shifted production at three of its distilleries to make sanitiser.

 

Diageo has pledged to help create eight million bottles of sanitiser during the crisis by donating up to two million litres of grain-neutral spirit to hand sanitiser producers.

 

"This is the quickest and most effective way for us to meet the surging demand for hand sanitiser around the world," said Ivan Menezes, chief executive of Diageo.

 

Bacardi has turned its rum distillery in Cataño, Puerto Rico, into a hand sanitiser production site.

 

Scottish brewer Brewdog is producing about 4,000 litres a week of its Punk Sanitiser for the NHS and local Aberdeenshire charities.--bbc

 

 

 

Coronavirus: Can live-streaming save China's economy?

"I'm a bit nervous," confessed Li Qiang, the deputy mayor of Wuhan, the Chinese city where the coronavirus was first reported late last year, as he awaited the start of his first-ever TikTok live-streaming event.

 

It is not the kind of tone one often hears from a senior Communist party official. But in an effort to revive China's economy after the devastating epidemic, Mr Li was determined. He spoke fondly of his long appreciation of Wuhan's local delicacy, hot and dry noodles, and urged locals to frequent his favourite shop.

 

The two-month-long nationwide lockdown has taken a heavy toll on the economy. It shrank 6.8% in the first three months of 2020 - the first time the country's economy has contracted since the death of Chairman Mao in 1976.

 

But unlike then, Chinese politicians are more pragmatic these days, particularly as the once fast-growing economy is entering uncharted waters.

 

In a provincial-wide campaign to revive the economy, senior officials in Hubei province - home to 60 million Chinese - are turning themselves into online streaming celebrities. Mr Li and his colleagues are endorsing local brands and paying close attention to sales figures.

 

And the result? Chinese media reports say that on the first day of the campaign - 8 April - these TikTok live-streaming sales across the province garnered 17.9m yuan ($2.5m; £2m). They sold nearly 300,000 items in nine hours - including 44,000 portions of Mr Li's favourite hot and dry noodles.

 

Hubei is not the only province taking advantage of China's booming live-streaming industry. Many local officials in Hunan, Shandong and Guangxi provinces have also turned themselves into sales gurus since social distancing became a rule in China. They endorse local products to help revive the economy - while showing a different side of Communist party politicians to their constituents.

 

Sales through live-streaming during the epidemic "definitely provided hope and a new outlet for companies to start investing in marketing, which supports the service industry and other industries as well," says Andrea Fenn, CEO of Fireworks, a Shanghai-based marketing consultancy.

 

'Lipstick Brother No 1'

Yet this business model is not just a top-down effort. Even before party officials began appearing on live-streaming services, savvy business owners were turning to live-streaming platforms such as TikTok and Kuaishou, as well as e-commerce giant Alibaba's Taobao, to promote and sell their products in real time.

 

One of them is 27-year-old Li Jiaqi, whose maverick sales technique has won him the nickname "Lipstick Brother No 1". Once an unassuming shop assistant earning a modest salary in Nanchang in south-east China, he now has more than 40 million followers on TikTok.

 

In one of his live-streaming sales sessions he sold 15,000 lipsticks within five minutes. Unlike many beauty bloggers he always demonstrates the lipsticks he's selling on his lips, rather than his arms. It seems to be paying off, as he now reportedly has a net worth of up to $5m (£4m).

 

There is also 33-year-old Wei Ya, whose 1 April sale of a $6m rocket launch on Taobao amazed the nation and attracted international publicity. So much so that Taobao had to issue a statement confirming the sale was real and not an April Fools' joke.

 

Wei Ya has been a familiar face in China's live-streaming sales circle. Her followers call her "Queen of Goods".

 

The official China Daily says this was "the world's first live broadcast of a rocket sale". More than 620,000 Weibo users have used the hashtag #WeiYaSellsARocket and more than two million online viewers tuned in to watch the sale.

 

Foreign brands too have been joining in. Luxury product maker Louis Vuitton hosted a live-streaming sale in March - the first time since the brand entered the Chinese market 30 years ago.

 

At the height of China's Covid-19 epidemic, in February alone Taobao, the platform which sees the largest number of live-streaming sales, saw an increase of 719% in new sellers across the country.

 

Not everyone will succeed, though. Marketing consultancy boss Andrea Fenn says that despite the recent frenzy, the market is getting increasingly crowded.

 

"Early adopters were able to obtain results with [often quite amateurish] live-streaming activities because the phenomenon was quite new and fresh.

 

"Now there are thousands of live-streamings out there and consumers are starting to wonder how come we have gone back to a communication activity that looks much like a 1990s telemarketing show.

 

"I am seeing more and more companies failing in their ability to increase sales through live-streaming due to consumer fatigue."

 

One of China's most successful online celebrities can probably attest to that. In April, 48-year-old former English teacher - and now internet celebrity - Luo Yonghao made the news with his inaugural live-streaming sales event.

 

It attracted 50 million viewers across China and within three hours he had rung up a staggering sales figure of $15.5m.

 

Over the next fortnight Mr Luo used live-streaming twice more to sell goods, but with much less success. Chinese media say the number of his viewers and sales figures plummeted - by 83% and 48% respectively.

 

Andrea Fenn says, for him, all this confirms that "I don't think we are looking at something that alone can sustain an economic boom".--bbc

 

 

 

Coronavirus: Virgin Atlantic to cut 3,000 jobs and quit Gatwick

Virgin Atlantic has announced it is to cut more than 3,000 jobs in the UK and end its operation at Gatwick airport.

 

The shock announcement comes after rival British Airways said it could not rule out closing its Gatwick operation. Pilots' union Balpa described it as "devastating".

 

Many airlines have been struggling as the coronavirus pandemic has brought global travel to a virtual standstill.

 

The airline currently employs a total of about 10,000 people.

 

Virgin Atlantic, which is in the process of applying for emergency loans from the government, said that jobs will be lost across the board.

 

"We have weathered many storms since our first flight 36 years ago but none has been as devastating as Covid-19 and the associated loss of life and livelihood for so many," said Virgin Atlantic chief executive Shai Weiss.

 

'Dire situation'

Balpa the union said: "This is another terrible blow for the industry and is evidence of the dire situation facing UK aviation.

 

Balpa general secretary, Brian Strutton, said: "Our members and all staff in Virgin Atlantic will be shocked by the scale of this bombshell. We will be challenging Virgin very hard to justify this."

 

Virgin Atlantic also said it will move its flying programme from Gatwick to Heathrow. It said it intended to keep its slots at Gatwick "so it can return in line with customer demand".

 

However, Mr Weiss said there was no certainty when the air travel industry would recover from the coronavirus crisis.

 

"After 9/11 and the global financial crisis, we took similar painful measures but fortunately many members of our team were back flying with us within a couple of years.

 

"Depending on how long the pandemic lasts and the period of time our planes are grounded for, hopefully the same will happen this time."

 

Gatwick said the company was "very saddened" to hear of Virgin Atlantic's plans.

 

The airline has flown from the airport since 1984, and Gatwick said: "Virgin Atlantic will always be welcome at Gatwick and we will continue our efforts to explore ways to restart the airline's operations as soon as possible, in the knowledge that they intend to retain their slot portfolio at Gatwick for when demand returns."

 

Tim Alderslade, chief executive of aviation industry group Airlines UK, said: "The challenges facing UK aviation cannot be overstated. There is currently close to zero passenger demand and many airlines have ceased operations altogether.

 

"We do not know when countries will start to reopen their borders, or whether restrictions will remain in place for some time.

 

"Airlines are having to adapt to a sector that will be smaller and leaner in future, with no guarantees as to when we will return to pre-crisis levels."

 

It was 28% at British Airways. Now 30% of jobs will be lost at Virgin Atlantic.

 

The UK's aviation sector is shrinking in size. No airline or airport is immune.

 

Virgin Atlantic was Gatwick's ninth-largest airline, so it's a blow, but not a knock-out punch.

 

However, British Airways, which is Gatwick's second-biggest customer, has indicated that it also might not restart its Gatwick operation.

 

If BA does pull out, it would carry deeper ramifications.

 

Just a few weeks ago, several UK airports had elaborate, expensive and very controversial expansion plans in the pipeline. The big ones were operating at or very near capacity.

 

But the whole aviation sector is living a new reality.

 

When lockdown restrictions ease and flight schedules are increased again, there will be fewer passengers, fewer and probably more expensive flights and sadly thousands of cabin crew, pilots and ground staff will have lost their jobs.

 

And the consensus is that it will take years for the aviation sector to bounce back to where it was before the pandemic.

 

Commenting on its own future, Gatwick said: "We remain very optimistic about the long-term prospects of Gatwick Airport and our resilience as a business, and having remained open throughout this pandemic we are in a strong position to extend our current operations quickly to meet demand."

 

Other airlines have already announced that they intend to cut jobs because of the collapse in demand for travel due to the coronavirus pandemic.

 

Last week, British Airways said it was set to cut up to 12,000 jobs from its 42,000-strong workforce. It also told staff that its Gatwick airport operation might not reopen after the pandemic passes.

 

Ryanair has also said it will cut 3,000 jobs - 15% of its workforce - with boss Michael O'Leary saying the move was "the minimum that we need just to survive the next 12 months".

 

Virgin Atlantic said it had begun a 45-day consultation period on the job losses with unions Balpa and Unite.

 

Virgin Atlantic also plans to reduce the size of its fleet of aircraft from 45 to 35 by the summer of 2022.

 

It hopes to restore about 60% of its pre-pandemic flying capacity by the end of 2020.

 

Meanwhile, the airline industry has said it must be ready with a series of measures to prevent the spread of coronavirus before air travel can resume.

 

The International Air Transport Association (IATA) said it recommended mandatory face-coverings for passengers and masks for crew, as one of several actions to reduce what it called "the already low risk of contracting Covid-19 on board aircraft".

 

--bbc

 

 

 

Air fares face turbulence when flights slowly restart

Air fares should fall when flights restart but then rise by at least 50%, warns a global airline industry body.

 

Airlines are keen to get planes back in the skies quickly which could lead to over-capacity, says the International Air Transport Association (Iata).

 

With passenger demand likely to remain low this should put pressure on carriers to reduce the cost of flights.

 

But if airlines are forced to keep middle seats free they will need to raise air fares significantly.

 

Under current social distancing proposals, airlines may be required to keep middle seats free which would have a major impact on their profitability, as they would be forced to fly with fewer passengers. Michael O'Leary, the boss of Ryanair, said keeping middle seats empty was "idiotic".

 

Iata estimates that only four of the 122 airlines it sampled would be able to break even under these conditions, leading to consolidation in the industry. Raising fares is "inevitable" for carriers to remain commercially viable.

 

Most airlines are already struggling with the severe downturn in passenger numbers with the vast majority of their planes grounded.

 

On Tuesday, Virgin Atlantic said it would cut more than 3,000 jobs and end its operations at Gatwick Airport. Last month, Virgin Australia went into voluntary administration and analysts fear other airlines will follow.

 

"It's tricky to understand how many airlines will be able to operate profitably. It will be a much smaller industry," said Brian Pearce, Iata's chief economist, talking about the onboard social distancing proposals.

 

His team argues that social distancing through vacant middle seats is no guarantee against the spread of coronavirus on planes. Instead, Iata supports the wearing of face masks by passengers for safer flying.

 

The ray of hope for passengers is that they could see cheaper fares once flights resume as carriers attempt to stimulate demand.

 

Airlines will only be able to increase air fares once passenger numbers recover, but this will only be by 2021 at the earliest, estimates Iata.--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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