Major International Business Headlines Brief::: 21 May 2020

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Major International Business Headlines Brief::: 21 May 2020

 


 

 


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ü  US Senate passes bill that could delist some Chinese firms

ü  Rolls-Royce to cut 9,000 jobs amid virus crisis

ü  Toy and vegetable costs rise as fuel price drops

ü  Shopping may never be the same, says M&S

ü  Egypt to take 1% from salaries due to coronavirus

ü  Egypt's GDP growth was 5% in January-March quarter - cabinet

ü  South Africa's central bank to cut rates again, resist QE pressure for
now

ü  World Bank approves $1 billion funding for Kenya budget support

ü  South African retailer Edcon can be saved, say administrators

ü  Kenya's KCB Group posts 8% jump in Q1 net profit

ü  South Africa's Tiger Brands books $30 mln impairment on export businesses

ü  Zambia cuts lending rate by 225 basis points to 9.25%

ü  Zambia partners with Array Metals to process gold

ü  Sulphur squeeze spells trouble for Congo's copper and cobalt miners

ü  South Africa's Land Bank in talks with lenders after debt default

ü  Tinder boss says 'dramatic' changes to dating

 

 

 

 


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US Senate passes bill that could delist some Chinese firms

The US Senate has passed a bill that could block some Chinese companies from
selling shares on American stock exchanges.

 

It would require overseas firms to follow US standards for audits and other
financial regulations.

 

The measure now has to be passed by the House of Representatives before
being signed into law by President Trump.

 

It comes as US-China tensions increase over the virus pandemic and after the
Luckin Coffee accounting scandal.

 

The planned legislation would also require publicly traded companies to
reveal whether they are owned or controlled by a foreign government.

 

The bill applies to all foreign companies, but is targeted at China, and
follows intense criticism of Beijing by Mr Trump and other US politicians.

 

Mr Trump and officials in his administration argue that China mishandled the
coronavirus outbreak in its early stages.

 

The outbreak has now grown to become a pandemic that has killed almost
330,000 people worldwide and crippled the global economy.

 

US-listed Chinese companies have already come under increasing scrutiny in
recent weeks after Luckin Coffee revealed that an internal investigation
found hundreds of millions of dollars of its sales last year were
“fabricated”.

 

The company said its own investigation had found that fabricated sales from
the second quarter of last year to the fourth quarter amounted to about
2.2bn yuan ($310m; £254m). That equates to about 40% of its estimated annual
sales.

 

The Chinese coffee chain has since sacked its chief executive and chief
operating officer, while six other employees who were alleged to have been
involved in or known about the transactions have been suspended or put on
leave.

 

The scandal-hit firm has said it has been co-operating with regulators in
the US and China, who have begun an investigation into the company.

 

Luckin's Nasdaq listing had been one of China's few successful US stock
market debuts of 2019.

 

On Tuesday Luckin said the Nasdaq exchange had notified the company of plans
to delist it due to concerns over the alleged fabricated sales and
disclosure failures. Its shares will trade on the exchange pending the
outcome of an appeal, expected within 45 days.

 

The scandal-hit firm's shares, which had been suspended since 7 April,
plunged by more than 35% after they resumed trading on Wednesday.--BBC

 

 


 <mailto:info at bulls.co.zw> 

 


 

Rolls-Royce to cut 9,000 jobs amid virus crisis

Rolls-Royce has said it will cut 9,000 jobs and warned it will take "several
years" for the airline industry to recover from the coronavirus pandemic.

 

The Derby-based firm, which makes plane engines, said the reduction of
nearly a fifth of its workforce would mainly affect its civil aerospace
division.

 

"This is not a crisis of our making. But it is the crisis that we face and
must deal with," boss Warren East said.

 

The bulk of the job cuts are expected to be in the UK at its site in Derby.

 

Rolls-Royce employs 52,000 people globally and Mr East told the BBC's Today
programme that the company had not yet concluded on "exactly" where the job
losses would be, due to having to consult with unions.

 

But he said: "It's fair to say that of our civil aerospace business
approximately two-thirds of the total employees are in the UK at the moment
and that's probably a good first proxy."

 

Rolls-Royce's civil aerospace business has a number of sites in the UK, but
the largest plant is in Derby.

 

The company said it will also carry out a review of its sites but declined
to comment on which ones may close.

 

John, a worker in Rolls-Royce's civil aerospace division who spoke to the
BBC on condition of anonymity, said that while he expected there would be
job cuts, the eventual 9,000 figure was "a shock".

 

"Since the Covid-19 outbreak we knew that business would shrink," he said.

 

But he said the scale of the cuts as well as the potential closure of some
sites was a surprise.

 

Unite the union said the decision was "shameful opportunism".

 

"This company has accepted public money to furlough thousands of workers,"
said Unite's assistant general secretary for manufacturing, Steve Turner.

 

"Unite and Britain's taxpayers deserve a more responsible approach to a
national emergency. We call upon Rolls-Royce to step back from the brink and
work with us on a better way through this crisis."

 

How will airlines get flying again?

Rolls-Royce initially furloughed 4,000 workers in the UK last month. Some
3,700 people remain on the Coronavirus Job Retention Scheme though which the
government pays 80% of a worker's wage up to £2,500 a month.

 

But Mr East said: "No government can extend things like furlough schemes for
years into the future. We have to look after ourselves and make sure we meet
medium term demand."

 

Job cuts a heavy blow

This morning's job losses are hardly unexpected - airlines have cut their
flying hours by 90% or more, and Airbus and Boeing have slashed their
production numbers for the next few years - but they are still a heavy blow
to one of the UK's few world-class manufacturing companies.

 

While the details of where the cuts will fall have not been finalised, it is
likely that two-thirds will go in the UK.

 

The company has already used the government's furlough scheme to help pay
the wages of about 4,000 staff, but Warren East, Rolls-Royce's chief
executive, said companies could not expect the government to continue such a
scheme for several years.

 

There was also a clear hint this morning that some factories may close - the
company said it would review its future manufacturing footprint.

 

Some questions remain for Roll-Royce. Investors are scratching their head
about when the company's revenues - much of which rely on aircraft to be
flying for money to flow - will return.

 

The company has not yet tapped its shareholders for more money - some expect
that may eventually come.

 

Air travel has ground to a virtual standstill since the coronavirus began
spreading across the world and many airlines have announced steep job cuts.

 

Global air traffic is expected to decline by 45% this year, according to
investment bank Baird. It also forecasts that airlines are expected to lose
$310bn (£253bn) in revenue in 2020.

 

Rolls-Royce said the impact of the pandemic on the company and the whole of
the aviation industry "is unprecedented".

 

It added that it is "increasingly clear that activity in the commercial
aerospace market will take several years to return to the levels seen just a
few months ago".

 

As well as the job losses, the company said it would cut costs in areas such
as its plants and properties. It expects to make cost savings of £1.3bn.

 

Paul Everitt, chief executive of ADS, the aerospace industry association,
said: "The crisis is having a major impact on aerospace companies who
provide high value, long-term jobs in all regions and nations of the UK,
putting thousands more jobs at risk now and in the months ahead."--BBC

 

 

 

Toy and vegetable costs rise as fuel price drops

The UK's inflation rate fell in April to its lowest since August 2016 as the
economic fallout of the first month of the lockdown hit prices.

 

The Consumer Prices Index (CPI) fell to 0.8% from 1.5% in March, the Office
for National Statistics (ONS) said.

 

Falling petrol and diesel prices, plus lower energy bills, were the main
drivers pushing inflation lower.

 

But the prices of games and toys rose, which the ONS said may be due to
people spending more time at home.

 

However, there were 92 items in the ONS's basket of goods and services that
it could not measure in April because they were mostly unavailable. These
ranged from haircut prices, lemonade, manicures, cinema popcorn, and leisure
activities involving sport.

 

The ONS said it would monitor the issue for any distortion in the overall
picture. But Jonathan Athow, deputy national statistician for economic
statistics at the ONS, said: "While the coronavirus limited the availability
of some goods and services, its effect on prices was more muted."

 

He said that food prices generally rose no more quickly than other goods and
services, "though fresh vegetables did see stronger rises".

 

The ONS said average petrol prices dropped by 10.4p a litre between March
and April - the biggest fall since unleaded petrol records began in 1990 -
amid a slump in global oil prices.

 

Energy prices also pushed inflation lower as regulator Ofgem reduced its
default tariff cap.

 

The ONS said clothes retailers, hit during the early days of the lockdown by
weaker footfall and then the closure of outlets, resorted to more discount
sales than usual to try to shift their stock.

 

Goods seeing upward pressure on prices included video games and consoles,
board games and children's toys, the ONS said. And the price of knitting
wool rose, another sign of the crafts and hobbies popular with people
staying at home.

 

Long-life products - such as cook-in sauces and frozen fish - also saw price
hikes last month as consumers stocked up for life in lockdown.

 

Laura Suter, personal finance analyst at investment platform AJ Bell, said
it was likely that as shops start re-opening retailers would deeply discount
prices, putting further downward pressure on inflation.

 

She also pointed to positive news for savers. "For the first time in ages
[savers] can now get above inflation interest rates on easy-access savings
accounts - from more than one account."

 

CPI is now far below the Bank of England's 2% target, used as general
guidance to help businesses set the right prices and for people to plan
their spending.

 

But while low inflation reduces the need for rises in interest rates and
gives people a feeling the pound in their pocket stretches further, it's
possible to have too much of a good thing.

 

Low inflation minimises the erosion of debt over the years. People (and
governments) with borrowing, such as mortgages, don't see the benefit. That
big loan you have doesn't look so big if wages are keeping up with
inflation. So-called deflation actually increases the value the debts.

 

But low inflation discourages employers from raising pay (which hits the
Treasury's tax take) and may even encourage them to cut pay in troubled
times.

 

And if prices are falling, consumers can put off big ticket purchases in the
hope the fall will continue - and this slows economic growth.

 

Savers are also penalised. Low inflation generally means lower official
interest rates - and that means banks and building societies keep their
savings rates down.

 

It's why, when inflation remains one percentage point below 2%, the governor
of the Bank of England writes to the chancellor to explain how the price
index can be brought back on target. There's a good reason a little
inflation is good for the economy.

 

 

Most economists had expected April's inflation to fall to 0.9%, and have
predicted the rate will fall further as the economic fallout of the pandemic
continues.

 

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said inflation
had taken a "big leap towards zero by the summer" as he said retailers were
planning "further large price cuts".

 

He predicted inflation would recover next year but was likely to remain
below 2% for much of 2021.

 

"The inflation outlook, then, supports the [Bank of England's] Monetary
Policy Committee doing more to stimulate the economy at its next meeting in
mid-June - we look for a further £100bn of quantitative easing to be
announced," he added.

 

Core inflation, which excludes energy, food, alcohol and tobacco, held
broadly steady at an annual rate of 1.5%.

 

Inflation as measured by the Retail Prices Index (RPI) - an older measure of
inflation which the ONS says is inaccurate, but is widely used in bond
markets and for other commercial contracts - dropped to 1.5% from 2.6%.--BBC

 

 

 

Shopping may never be the same, says M&S

Customers "may never shop the same way again" after the coronavirus crisis,
Marks and Spencer's boss has said.

 

"Whilst some customer habits will return to normal, others have changed
forever," Steve Rowe said.

 

The pandemic has driven several changes, including a shift to online,
customers cooking more from scratch and buying more casual clothing.

 

T-shirt bras and bathroom products online sales have risen, while it is
barely selling any suits or ties.

 

The retailer has also found that as shoppers are visiting the shops less,
they are planning what to eat further in advance, and also buying more herbs
and whole vegetables.

 

It said that customers are buying bigger product packs, such as of
strawberries or chicken. Sales of frozen items are also up by 75% on the
year in the UK.

 

M&S added that online shoppers were now browsing earlier in the day, between
15:00 and 17:00.

 

As more customers work from home, desktop visits were also up 38% in
comparison with the same period last year.

 

But M&S is one of the few big food retailers without its own internet-based
delivery service.

 

This has hampered the chain as customers have needed to purchase items
online during lockdown if they are self-isolating, for example.

 

However, the retailer's partnership with Ocado starts in September this
year, replacing the online grocer's existing deal with Waitrose.

 

In a new announcement, M&S said the delivery service would also include over
a thousand non-food items meaning customers will soon be able to buy
cushions or underwear alongside their eggs or bread.

 

Mr Rowe said that Ocado's strong performance during lockdown "further
reinforced" the value of the deal for delivering groceries.

 

The impact of the virus lockdown has driven "effects and aftershocks" in the
retail sector that would "endure for the coming year and beyond," Mr Rowe
added.

 

Neil Wilson, chief market analyst at Markets.com, said: "Covid-19 has
accelerated lots of consumer trends and it may just be the catalyst required
to accelerate Marks and Spencer's transformation into a 21st century
retailer.

 

"In particular it looks as though M&S has learnt just how important online
is - so it's making its Ocado venture more central to the business."

 

Transformation plan

M&S was already undergoing a transformation plan led by its chief executive
Steve Rowe which included cutting costs and closing some stores.

 

The firm said that due to the pandemic, those measures would be sped up
under a programme called "Never The Same Again".

 

Those include buying clothing from fewer core suppliers, reducing the
clothing and home ranges, as well as "the replacement of ageing stores".

 

"The trauma of the Covid-19 crisis has galvanised our colleagues to secure
the future of the business," said Mr Rowe.

 

'Mountain of unsold stock'

The company has been facing increasing competition from fashion giants such
as Primark on the High Street and Asos on the internet in recent years.

 

In the year to March, M&S said its clothing sales fell by 6.2%, whereas its
food sales were up 1.9%.

 

To add to its problems, M&S's non-food stores have been forced to shut under
the lockdown measures.

 

As a result, it faces a "mounting backlog of unsold stock" in its
warehouses, it said.

 

Clothing and homeware sales fell by 75% in the six weeks to 9 May. Food
sales also fell, by 8.8%, although M&S said many of its Simply Food stores
were trading strongly.

 

Sales hit

The firm said that lockdown measures, social distancing and lower consumer
demand were "likely to continue through the year", adding that the
coronavirus pandemic means that its performance over the next year is
difficult to predict.

 

It is working on a scenario that assumes a sales hit of £2.1bn over the next
year across clothing, home, food and international sales.

 

Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: "Overall,
M&S was facing challenges before coronavirus and these have simply been
exacerbated.

 

"Within the difficulties there are real opportunities too, and the group
appears to have a lot of the right ideas, but the next chapter really needs
to be about execution."

 

Its comments came as M&S said its profits for the year to March had dropped
by more than 20% to £403m, from £511m in the previous year, as its troubled
clothing business continued to struggle.--BBC

 

 

 

Egypt to take 1% from salaries due to coronavirus

(Reuters) - Egypt will deduct 1% from people’s salaries for 12 months
beginning on July 1 to offset the economic repercussions of the coronavirus,
according to a draft law approved by the cabinet on Wednesday.

 

The tax will be imposed across all sectors of the economy in both the public
and private sectors for net monthly salaries exceeding 2,000 Egyptian pounds
($127), the cabinet said in a statement. A tax of 0.5% will be deducted from
state pensions.

 

The measure comes as Egypt tries to deal with the economic impact of the
pandemic, which has brought tourism to a standstill, triggered major capital
flight, and threatened remittances from Egyptians working overseas.

 

Revenues from the salary tax will be used to support organisations and
workers hit by the fallout from the virus, as well as for direct support to
some citizens and funding for the medical sector, the cabinet said.

 

Those affected economically by the outbreak may be exempted from the tax.

 

Egypt has confirmed more than 13,400 coronavirus cases, including more than
650 deaths, and on Tuesday saw its biggest rise in daily cases to date.

 

The government has received nearly $2.8 bln in emergency financial support
from the IMF to help close a balance of payments gap caused by the
coronavirus, and is in talks with the fund over a standby loan.

 

GDP growth stood at 5% in January-March, down from a forecast of 5.9%, the
cabinet said. The government has forecast that it will drop to about 1% in
April-June. ($1 = 15.7700 Egyptian pounds) 

 

 

 

Egypt's GDP growth was 5% in January-March quarter - cabinet

(Reuters) - Egypt posted GDP growth of 5% in the three months to March, the
cabinet said on Wednesday.

 

Growth had been expected to reach 5.9% in the quarter, but slowed because of
the coronavirus epidemic, it said in a statement.

 

 

 

South Africa's central bank to cut rates again, resist QE pressure for now

JOHANNESBURG (Reuters) - South Africa’s central bank is expected to cut
interest rates to a 50-year low on Thursday but resist for the moment
political pressure to buy government bonds so the state can spend more to
alleviate the impact of the coronavirus pandemic.

 

A Reuters poll predicts the Reserve Bank (SARB) will lower borrowing costs
by 50 basis points to 3.75%, with a 100 bps cut seen as possible. That is on
top of 225 bps of rate reductions since March.

 

It is not expected to announce a shift to quantitative easing (QE), the
money-printing policy long pursued by major central banks to stimulate their
economies and recently adopted in some other emerging market countries.

 

Calls for the SARB to begin direct asset purchases are likely to persist,
however, including from within the ruling African National Congress party.

 

“Inside the ANC the finance minister is the lone voice, everyone else is
pushing for the bank to do more,” said independent economist Duma Gquble,
adding the SARB could cut rates to zero without fearing inflation. “This is
a once-in-a-century crisis, the normal rules don’t apply.”

 

The usually conservative central bank has already stepped in to buy public
debt in the secondary market, more than doubling its holdings of government
bonds to 20.6 billion rand — purchases it has denied represent a shift to
QE.

 

The SARB, which fears money printing could lead to higher inflation and
weaken the rand, restated its opposition to QE this month, after the deputy
finance minister urged the central bank to create money to fund the pandemic
response.

 

“Upcoming budget adjustments may push up the deficit to 12%-15% of GDP, and
it’s possible Treasury could seek direct funding in the primary market from
the SARB — a move it has seemed to oppose thus far,” said analysts at
JPMorgan.

 

The Treasury says two-thirds of its 500 billion rand ($27 billion) stimulus
plan will be funded with loans from the IMF and other development
institutions and the balance from capital markets and revised spending.

 

But with the extra spending set to widen South Africa’s budget deficit while
credit ratings downgrades and this year’s 23% drop in the rand push up debt
ratios and debt servicing costs, debate will continue about the central
bank’s role.

 

“The SARB is the fastest, easiest way to deploy nuclear-tipped bazookas as
the revenue hole gapes open,” said Peter Attard Montalto at Intellidex. “The
SARB is likely, at some point, going to have to step up.”

 

($1 = 18.2615 rand)

 

 

 

 

World Bank approves $1 billion funding for Kenya budget support

NAIROBI (Reuters) - The World Bank has approved a $1 billion loan for Kenya
to help it close a gaping budget deficit and tackle the economic shocks from
the coronavirus pandemic, both sides said on Wednesday.

 

The loan, initiated before the health crisis started, is the second ever
such direct lending for the budget from the World Bank, after the first was
processed last year.

 

“Its approval is timely, since it will help fill the financing gap generated
by the severe, ongoing shock to Kenya’s economy,” the World Bank said in a
statement.

 

The budget deficit has swollen to 8.2% of GDP in the financial year to the
end of June, from an initial forecast of under 7%, mainly due to reduced tax
collection and lost revenue from VAT and income tax cuts.

 

Finance Minister Ukur Yatani said the approval was a vote of confidence in
the government’s handling of the economy.

 

“The... WB (World Bank) does not provide budget support to countries with a
weak macro framework,” he wrote on Twitter.

 

The bank said that $750 million of the loan, which will come from the
International Development Association, will be repaid over a 30-year period,
after a grace period of five years, with 1.35% interest.

 

The second component of $250 million, which will come from the International
Bank for Reconstruction and Development, will have a market-based interest
rate of about 2%.

 

“Both amounts are highly concessional,” Felipe Jaramillo, the World Bank’s
Kenya head, told an online news conference.

 

The loan comes two weeks after the IMF approved $739 million in emergency
financing, a move which has supported the shilling currency.

 

 

 

South African retailer Edcon can be saved, say administrators

JOHANNESBURG (Reuters) - Administrators in charge of South African
department store operator Edcon believe there is a reasonable prospect of
saving the company after filing for a form of bankruptcy protection in
April.

 

In a presentation to creditors dated May 18 and seen by Reuters, the
administrators said Edcon has “valuable brands and market position that can
possibly be preserved through business rescue”.

 

They will publish a business rescue plan on June 8.

 

 

 

Kenya's KCB Group posts 8% jump in Q1 net profit

NAIROBI (Reuters) - Kenya’s biggest lender KCB Group saw an 8% jump in
profit after tax in the first quarter to March, to 6.3 billion Kenyan
shillings ($59 million), it said in a statement on Wednesday.

 

The rise was driven in part by a boost to interest income from loan book
growth, the bank said.

 

($1 = 106.8000 Kenyan shillings)

 

 

 

 

South Africa's Tiger Brands books $30 mln impairment on export businesses

JOHANNESBURG (Reuters) - South Africa’s biggest food producer Tiger Brands
said on Wednesday it took a 557 million rand ($30.86 million)impairment
charge on its export businesses as trading conditions remained difficult
amid the coronavirus pandemic.

 

The impairment led the owner of Jungle Oats and Tastic rice to revise its
earnings per share forecast for the six-months ended March 31 to between 74%
and 77% lower than that in the same period last year, from a previously
guided decline of 35%.

 

At 1202 GMT the company’s shares were 7.69% lower at 163.60 rand.

 

Tiger Brands kept its forecast for headline earnings per share, the main
profit gauge in South Africa, unchanged at a decline of as much as 36%.

 

The impairments relate mainly to the firm’s export businesses, namely
Davita, a powdered soft drinks and seasoning producer, the Deciduous Fruit
business and its investment in Nigerian associate, UAC Foods, it said.

 

“These impairments are as a result of the continual assessment of risks
associated with these businesses amid ongoing trading difficulties due to
deteriorating macro-economic prospects, exacerbated by Covid-19 led economic
challenges, as well as adverse category dynamics,” Tiger Brands said.

 

In February, Tiger Brands said the export division was significantly
impacted by a legal dispute with a former distributor in Nigeria, resulting
in virtually no sales into that country. The division has also been hit by
ongoing foreign currency shortages.

 

($1 = 18.0512 rand)

 

 

Zambia cuts lending rate by 225 basis points to 9.25%

LUSAKA (Reuters) - Zambia’s central bank on Wednesday cut its benchmark
lending rate by 225 basis points to 9.25%, in response to economic turmoil
brought about by the COVID-19 pandemic.

 

The bank projected gross domestic product (GDP) would shrink by 2.6% in
2020, the country’s first economic contraction in more than 20 years.

 

 

Zambia partners with Array Metals to process gold

LUSAKA (Reuters) - Zambia’s state mining investment company ZCCM Investments
Holdings (ZCCM-IH) has entered into a joint venture with mining services
firm Array Metals to process production from a gold deposit, the company
said in a statement on Wednesday.

 

Africa’s second-largest copper producer, Zambia is trying to diversify its
revenue base, and aims to produce 40,000 kg of gold in 2020 from primary and
secondary sources including gold bought from small-scale miners.

 

ZCCM-IH subsidiary Consolidated Gold Company Zambia (CGCZ) will hold 65% of
the project processing gold in Mumbwa, west of Lusaka, with Array Metals
Zambia holding 35%.

 

The project aims to produce about 3 tonnes of gold within the next two
years, worth approximately $150 million at current prices, the statement
said.

 

Array Metals estimated the reserve at about 3 million tonnes of gold ore
material containing between 2.5 and 3.5 grams of gold per tonne,
Vice-President Chris Rugari said.

 

The overall targeted gold production is 7,500 kg from the resource, but
under the agreement only part of the deposit would be processed before
ramping up production, Rugari said.

 

Rugari said Array Metals hoped to contribute to the development of Mumbwa,
traditionally known for agriculture, through economic diversification and
job creation.

 

Zambia has also built 10 milling plants to process gold in a drive to
formalise artisanal and small-scale miners and diversify from copper mining,
ZCCM-IH said last week.

 

As part of the push to monetise gold resources, the government is also
trying to make copper mines account for the gold they produce as a
by-product of the mining process. First Quantum Minerals’ Kansanshi Mine,
the only copper mine that has declared its gold production, produced 4,200
kg of gold in 2018.

 

 

 

Sulphur squeeze spells trouble for Congo's copper and cobalt miners

JOHANNESBURG/LONDON (Reuters) - Disruptions caused by the coronavirus crisis
have pushed up prices for sulphur by about 10% this year in the Democratic
Republic of Congo, driving up costs of a vital ingredient for mining cobalt
and copper in the African nation.

 

Coronavirus lockdowns and border closures in South Africa and parts of
Zambia and Congo have disrupted transport and other logistics, delaying
essential mining supplies.

 

Congo, the world’s biggest cobalt producer, accounted for 70% of global
supplies in 2019 of the metal that is used in alloys for jet engines and
batteries for phones and electric cars. It is Africa’s biggest copper
producer, accounting for 6.5% of world supplies. Sulphuric acid is used to
extract both.

 

“Planning can only take you so far and if you rely on those trade flows and
there are disruptions, there is nothing you can do about it,” said Peter
Harrisson, head of sulphur and sulphuric acid analysis at CRU Group.

 

Prices of granulated sulphur, a pure form of sulphur that is easily
transported and used to make sulphuric acid, are up about 10% since the end
of 2019 at about $420 a tonne.

 

Mines in Congo are still producing copper and cobalt, which is major
byproduct in the process, mostly relying on existing stocks of sulphuric
acid and other chemicals, or reagents.

 

“We are seeing high prices for reagents,” a logistics official said. “The
market needs a couple more weeks before some of the mining operations become
desperate and are forced to buy at inflated prices or risk shutting down.”

 

Congo miners import about 3 million tonnes of sulphuric acid a year, mainly
buying from smelters in Zambia, and about 450,000 tonnes of granulated
sulphur, mostly coming via suppliers in South Africa, according to CRU.

 

Transport accounts for most of the costs involved.

 

Typically, purchasing the acid accounts for 16% of operating costs for
Congolese mines, which include those operated by Glencore, China Molybdenum
and Chemaf, a subsidiary of Dubai-based Shalina Resources.

 

Glencore, whose Congo unit said in April it was postponing plans to build an
acid plant to the second half of 2020, declined to comment.

 

A spokesman for China Molybdenum, which runs the Tenke Fungurume mine, said
the company had a stock of sulphur needed to make the acid and said supply
still seemed “fairly regular”.

 

Chemaf Chief Financial Officer Nico de Lange said the company’s Etoile
cobalt mine was well stocked with sulphur but said the company was now
paying 8%-10% more than in December.

 

Mines extracting the metals from oxide ore typically use 3.5 to 4.5 tonnes
of sulphuric acid for each tonne of copper produced, according to
consultants Roskill.

 

Congo produced about 1.4 million tonnes of copper and almost 90,000 tonnes
of cobalt in 2019, the central bank said.

 

Regional demand for sulphur rose in the past 18 months as new mines opened,
smelter shutdowns squeezed supply and some mines opted to produce their own
acid to cut freight costs, said Cherryl Thomas, Africa sales manager at
reagent supplier Axis House.

 

Increased demand from China’s fertiliser industry has tightened global
supply and lifted prices for Asia-origin sulphuric acid in the last two
weeks, said Andy Hemphill, ICIS senior markets editor for sulphuric acid and
potash.

 

 

 

South Africa's Land Bank in talks with lenders after debt default

CAPE TOWN (Reuters) - South Africa’s Land Bank told lawmakers on Wednesday
it was negotiating with a consortium of lenders to try to restructure its
debt facilities after it defaulted on 50 billion rand ($2.7 billion) of
loans in April.

 

The Land and Agricultural Development Bank of South Africa (Land Bank), the
country’s largest agricultural-focussed lender, was downgraded by Moody’s in
January and last month missed loans repayments, leading to defaults on its
credit facilities and sparking fears about its ability to stay afloat.

 

Around 5.7 billion rand of its debt is guaranteed by the government, and the
National Treasury has said it cannot afford to recapitalise the bank as its
fights the economic fallout of the coronavirus pandemic.

 

Land Bank Chairman Arthur Moloto told parliament the state-owned lender had
every intention of honouring its financial obligations to service interest
on its debt, which it has struggled to do due what it called “liquidity
constraints”.

 

“We are at this stage engaging with a consortium of bond lenders, composed
of commercial banks and institutional investors. The negotiations are at a
very sensitive stage,” Moloto said.

 

“We are at this stage engaging with them with a view of restructuring the
debt facilities,” he said.

 

($1 = 18.2282 rand)

 

 

 

Tinder boss says 'dramatic' changes to dating

Coronavirus has had a "dramatic" effect on the way people use the dating app
Tinder, its boss has told BBC News, though the changes may suit plans he
already had in store for the platform.

 

The coronavirus outbreak and lockdown conditions have brought mixed fortunes
to online-dating platforms like Tinder, according to its chief executive
Elie Seidman.

 

On the one hand, user engagement is up, a trend other dating apps have
reported too.

 

Tinder users made 3 billion swipes worldwide on Sunday 29 March, the most
the app has ever recorded in a single day. In the UK, daily conversations
rose by 12% between mid-February and the end of March.

 

There has been a "dramatic shift" in behaviour metrics which are normally
stable, says Mr Seidman.

 

However, the economic impact of lockdown means people have less money to
spend.

 

This is not such good news for Tinder, which is free but relies on premium
subscriptions for its revenue.

 

“The [US] unemployment figures are hard to see,” says Mr Seidman. “I’m very
concerned about what happens economically for our society and the impact it
will have on so many of our members."

 

Tinder has been downloaded more than 340 million times since its launch in
2012. But the vast majority of its revenues come from just 6 million
subscribers who pay for the "gold" service. The rate at which it picked up
those precious paying-users declined as lockdown struck.

 

The company’s data show that new sign-ups for premium membership pick up
where lockdowns start to ease, says Mr Siedman.

 

“You can literally see the comeback on a state by state basis [in the US],
as things come out and start to loosen up, as the peak crisis starts to
pass.”

 

Other platforms which offer free sign-up have noticed something similar
during lockdown.

 

“We’ve seen a surge in activity,” says Charlie Lester, dating expert for The
Inner Circle platform. “Matches have risen by 15% and the number of messages
sent is up by 10%, but we’ve also noticed less willingness to pay.”

 

Mr Siedman says you might have to wait two or three financial quarters to
see the full economic impact on Tinder, as the scale of the global crisis
becomes clear.

 

The other issue that will become clear with time is whether the popularity
of virtual dating, by video call, is here to stay, once physical meet-ups
with strangers become more possible.

 

Platforms like eHarmony, OKCupid and Match have reported a big rise in video
dates.

 

Tinder is planning to roll out its own video dating function in June, says
Mr Seidman.

 

The video call service will operate on a double opt-in policy, so both sides
of the match would have to agree to it. It will be free and supported by a
team of moderators.

 

The changes to dating brought in by coronavirus lockdowns have merely
accelerated a generational change the company was already tracking in focus
groups, says Mr Seidman.

 

The 18-year-olds joining the app now, unlike their predecessors who joined
in 2012, have grown up immersed in social media apps and see that virtual
world as something quite natural, he explains.

 

For this generation online matches aren’t just about organising a meet-up in
real life, they are about having fulfilling online experiences too.

 

 

Media captionIs this a new way of dating during lockdown?

For this reason the company has been working on making Tinder less of a
place to organise "hook ups" offline and more of a place to hang out online,
to get to know people. It is trialling virtual spaces and live events where
people can meet and match on the platform, like Swipe Nights and quizzes.

 

Mr Seidman sums up the creed of the new young crop of Tinder users: “Your
digital life is as important as your social life in the physical world.”

 

In a world of continued social distancing, this creed may also have to be
embraced to some extent by older daters too.---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
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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
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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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