Major International Business Headlines Brief::: 26 May 2020

Tue May 26 05:03:30 CAT 2020

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Major International Business Headlines Brief::: 26 May 2020

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

ü  Jaguar Land Rover in talks over government loan

ü  Nigeria's economy expands 1.87% y/y in Q1 - stats office

ü  S.Africa's Tiger Brands eyes 'significant' job cuts on coronavirus

ü  Barrick's Tanzania gold concentrate containers cleared for export

ü  South African rand steadies, stocks open lower

ü  Workers at China Moly's Congo mine end one-day strike over COVID-19

ü  AngloGold Ashanti shuts S.African mine after finding 164 coronavirus cases

ü  S&P forecasts South Africa's economy to shrink 4.5% in 2020

ü  Steinmetz's BSGR seeks to reopen $1.25 bln Guinea ruling

ü  eSwatini cuts rates further in response to virus

ü  Tunisia's GDP shrank 1.7% in the first quarter of 2020

ü  Lufthansa agrees €9bn rescue deal with Germany

ü  All non-essential shops to reopen from 15 June - PM

ü  Spain to stop quarantining arrivals from 1 July

ü  Volkswagen loses landmark German 'dieselgate' case

ü  How Chinese rivals are trying to take Zoom's crown

ü  Government draws up plan to rescue key firms

ü  Fresh UK review into Huawei role in 5G networks

ü  Could you have to pay your bank to save money?

 <mailto:info at bulls.co.zw> 

Jaguar Land Rover in talks over government loan

Jaguar Land Rover (JLR) is in talks with the government to secure a loan of more than £1bn, following a drop in sales during the coronavirus pandemic.

According to reports, the carmaker has been in discussions for weeks about a support package.

JLR, which is owned by India's Tata Motors, has seen sales plunge by more than 30% in its most recent quarter.

A spokeswoman said JLR is in "regular discussion with government on a whole range of matters".

She added: "The content of our private discussions remains confidential."

How can the car industry hope to recover?

UK car sales plunge to lowest level since 1946

While the exact size of the loan is not yet clear, JLR said suggestions that the carmaker is seeking as much as £2bn is "inaccurate and speculative".

A spokesman for the Department for Business, Energy and Industrial Strategy said: "The government is in regular contact with the car manufacturing sector to assist them through this crisis.

"We recognise the challenges facing the industry as a result of coronavirus and firms can draw upon the unprecedented package of measures, including schemes to raise capital, flexibilities with tax bills and financial support for employees."

JLR has taken advantage of the government's Coronavirus Job Retention Scheme and around 18,000 of its UK workers remain furloughed.

The Coventry-based company employs 38,000 people in the UK.

However, the company does not qualify for the joint Treasury-Bank of England Covid Corporate Financing Facility aimed at large businesses, which requires that firms must be "investment grade rated".

This shows a company's credit worthiness and whether it is at a low or high risk of defaulting on its debts.

In its most recent results for the period to 31 March, JLR said it had £3.6bn in cash and investments as well as an undrawn credit facility of £1.9bn.

It is not known how much that position has changed in the intervening seven weeks.

JLR's facilities have been shut since the end of March, although last week it restarted some production at its Solihull plant and at its engine-making site in Wolverhampton.

Credit rating agency Standard & Poor's recently estimated that JLR will burn through £1bn in cash each month following the shutdown of its facilities and if "severely reduced production" continues over the next financial year.

JLR said sales of its vehicles fell by 30.9% in the three months to the end of March compared to the same period last year. It said the coronavirus pandemic had "significantly" impacted sales.

JLR's request for a taxpayer-backed loan was first reported by Sky News.--BBC

 <mailto:info at bulls.co.zw> 

Nigeria's economy expands 1.87% y/y in Q1 - stats office

ABUJA (Reuters) - Nigeria’s economy grew 1.87% in the first three months of 2020 from a year earlier, the statistics office said on Monday, shrinking from the previous quarter as oil prices and international trade fell due to the coronavirus pandemic.

It is the slowest quarterly growth rate in one-and-a-half years, and comes as Nigeria has still not recovered from a 2016 recession that sent more than 13 million people into unemployment.

The slowdown reflects “the earliest effects of the disruption” from the global outbreak, said Nigeria’s National Bureau of Statistics, and comes as the government expects Africa’s largest economy to contract this year as much as 8.9% in a worst case scenario.

Nigeria’s crude production was 2.07 million barrels a day, the statistics office said, the country’s highest level in more than four years.

But a global oil price crash due to reduced demand from the pandemic threatens to offset those gains, with annual growth in the oil sector contracting 1.3% from the previous quarter to 5.06%.

The non-oil sector was also hit: growing by just 1.55%, which was down 0.72% from the last three months of 2019, the statistics office said.

The World Bank expects the coming recession to be “much more pronounced” than in 2016 and potentially Nigeria’s worst financial crisis in four decades.

S.Africa's Tiger Brands eyes 'significant' job cuts on coronavirus

JOHANNESBURG (Reuters) - South African food producer Tiger Brands is looking to cut “significant” numbers of jobs and has scrapped its interim dividend due to supply disruptions and margin pressures linked to the coronavirus, it said on Monday.

The owner of popular South African food brands Jungle Oats and Tastic rice said its first-half headline earnings per share fell 35% for the six months to March.

Its profit will take a roughly 500 million rand ($28 million) hit in the second half from currency weakness, global supply chain disruptions and additional costs incurred during a lockdown to curb the spread of the virus, it said.

The company has started looking at cost-cutting measures, including possibly “significant” job cuts, Chief Executive Noel Doyle said in a media call.

“We have to look at a couple of categories where we have been incurring significant losses,” he said.

Tiger Brands employs more than 11,200 people in South Africa, excluding seasonal staff.

The group said it has decided not to declare an interim dividend, and could re-consider an annual dividend depending on its trading performance.

The food producer is also looking to exit its Deciduous Fruit business, which covers canned fruit, and will restructure some of its low-performing personal care brands, Doyle told analysts during a presentation.

He said the firm expects annual cost savings of 250 million rand from its current reorganisation plans.

Its first-half pre-tax profit from continuing operations fell 65% to 673 million rand, the company said.

Group revenue rose 2% to 15.7 billion rand and group operating income dropped 29%, with operating profit margins declining to 7%, it said.

“The group’s overall performance reflects the difficult trading environment and the challenges faced, particularly within grains, groceries, value-added meat products and exports,” Tiger Brands said in a statement

($1 = 17.5943 rand)

Barrick's Tanzania gold concentrate containers cleared for export

DAR ES SALAAM (Reuters) - Gold concentrate containers belonging to Barrick’s Tanzania subsidiary Twiga Minerals have been cleared for export, four months after the government lifted an export ban imposed during a tax dispute, a minerals ministry official told Reuters.

“Those who are responsible for executing the order according to the law have finished the procedures and Twiga has been allowed (to export the containers),” Simon Msanjila, permanent secretary at the ministry of minerals, said on Monday.

Barrick CEO Mark Bristow told Reuters on Jan. 27 the gold was worth $260-$280 million. Barrick declined to comment when asked about the export.

South African rand steadies, stocks open lower

JOHANNESBURG (Reuters) - South Africa’s rand held steady against the dollar early on Monday, a day after President Cyril Ramaphosa announced a further easing of the coronavirus lockdown from June 1, allowing the vast majority of the economy to return to production.

At 0710 GMT, the rand traded at 17.6050 per dollar, compared with its close of 17.5970 on Friday.

South Africa’s economy has been largely shut down since late March, when the government enforced severe restrictions to stem the spread of the novel coronavirus which locally has so far infected 22,583 people and killed 429.

Ramaphosa said on Sunday following broad consultations the cabinet had decided to move the country to “level three” of its five-level lockdown system from June 1.

“This comes as a welcome relief to many who have been severely negatively impacted by the lockdown,” said Bianca Botes, Executive Director at Peregrine Treasury Solutions.

On the stock market, the Top-40 index was down 0.19% while the broader all-share index slipped 0.15% in early trade.

Shares in South African food producer Tiger Brands fell more than 3% after the company reported a 35% fall in half-year headline earnings and deferred its interim dividend due to uncertainty around the coronavirus pandemic.

Government bonds firmed, with the yield on the 10-yer instrument due in 2030 down 6.5 basis points to 9.05%.

Workers at China Moly's Congo mine end one-day strike over COVID-19

JOHANNESBURG (Reuters) - Workers at China Molybdenum’s Tenke Fungurume Mining (TFM) mine in Democratic Republic of Congo ended a one-day strike on Sunday after agreeing a compromise with management over compensation for working in isolation for two months due to COVID-19.

The Chinese mining firm placed the TFM copper and cobalt mine in isolation from March 24 to try to protect the site from the coronavirus. Essential staff were ordered to stay on site and forbidden any contact with the outside world.

“A compromise was found, though the question of rotation of workers remains to be settled, because those who have worked nearly two months need to see their families,” Samsoni told Reuters, adding that production would not be affected.

A document dated May 23 seen by Reuters listed TFM employees’ demands, including an extra $100 a day to compensate for working in isolation.

It was unclear how many mineworkers went on strike.

A video seen by Reuters showed a group of around 30 workers, in full protective personal equipment and face masks, singing together on the mine site.

In a letter cited by Congolese media which Reuters could not independently verify, TFM management said they agreed to pay workers an “isolation bonus”, with an initial $300 to be given by Monday, and would begin to rotate workers from Wednesday.

Tenke Fungurume, one of Congo’s biggest copper and cobalt mines, produced 117,956 tonnes of copper and 16,098 tonnes of cobalt in 2019.

China Moly projects the mine will produce 163,000 to 200,000 tonnes of copper and 14,000 to 17,000 tonnes of cobalt in 2020.

“Happy that the workers and their employer found, as we suggested, a solution over the ‘isolation bonus’, working hours and the conditions under which workers can rotate,” said Labour Minister Nene Nkulu. “Production must continue, while respecting preventative measures.”

AngloGold Ashanti shuts S.African mine after finding 164 coronavirus cases

JOHANNESBURG (Reuters) - AngloGold Ashanti’s Mponeng mine in South Africa has been temporarily closed after 164 workers tested positive for the coronavirus, the gold miner said in a statement on Sunday.

The mine, the deepest in the world, only re-opened in April after being shut under a nationwide lockdown, and had been operating at around 50% capacity. It accounted for around 7.4% of the company’s total gold production in 2019.

AngloGold Ashanti, which also operates mines elsewhere in Africa, South America and Australia, said it had conducted 650 tests at Mponeng since detecting the first case of the virus there last week, and 164 employees had tested positive with only a handful of tests left to process.

“As a precautionary step, and after discussions with the regulator, operations... have been temporarily halted on a voluntary basis, to complete contact tracing and to again deep clean and sanitize the workplace and key infrastructure,” the statement said.

It added that the vast majority of the cases were asymptomatic and all those who tested positive would be isolated in line with national health protocols, with on-site facilities available for those who need them.

The statement followed an announcement by a provincial health department earlier on Sunday that underground operations at the mine would be closed until further notice after 53 workers had tested positive.

Like all South African mines, Mponeng, which employed an average of 5,051 people including contractors in 2019, was permitted to return to operating at 50% capacity in April when the lockdown, one of the world’s most restrictive, was eased.

But some workers, especially those employed at deep mines, have raised concerns about returning to work in an environment where social distancing is difficult.

A number of other mines in the industry, which employs around 500,000 people, have also had to temporarily close after workers tested positive for the virus, including mines owned by Impala Platinum and Assore.

S&P forecasts South Africa's economy to shrink 4.5% in 2020

JOHANNESBURG (Reuters) - S&P Global Ratings on Friday said it projects South Africa’s economy to shrink by 4.5% this year as a result of the COVID-19 pandemic that has impacted production and consumption.

In April, S&P downgraded South Africa’s credit rating further into non-investment-grade territory, saying COVID-19-related pressures would have significant adverse implications for the country’s already-ailing economy and for tax revenues.

It lowered its long-term foreign-currency rating on South Africa to “BB-minus” from “BB” and its long-term local-currency rating to “BB” from “BB-plus,” with a stable outlook.

“COVID-19 will weigh heavily on GDP growth given the strict domestic lockdown that has shut down much of the economy, the markedly weaker external demand outlook, and tighter credit conditions,” S&P said. “As a result, we now project the economy to shrink by 4.5% this year.”

The ratings agency projects growth of 3.5% for 2021.

South Africa’s lockdown has entered its ninth week, leaving many businesses and individuals struggling without income in the recession-hit economy.

S&P said the weaker macroeconomic environment would also weigh heavily on fiscal revenues, projecting that the fiscal deficit would widen to 13.3% of gross domestic product in 2020 —the widest in the country’s democratic history.

S&P estimates net debt levels would rise to over 75% of GDP by the end of 2020.

“Our anticipation of an only tepid economic recovery means that public financing needs will likely remain elevated throughout the forecast period,” S&P said. “As a result, the net debt-to-GDP ratio is unlikely to stabilize within this timeframe, rising to 85% by 2023, raising questions around debt sustainability.”

Steinmetz's BSGR seeks to reopen $1.25 bln Guinea ruling

LONDON/JOHANNESBURG (Reuters) - Billionaire Beny Steinmetz’s BSG Resources Ltd (BSGR) is seeking to reopen an arbitration case that ordered it to pay $1.25 billion to Brazilian minder Vale SA over an abandoned mining joint venture in Guinea.

BSGR has filed documents, seen by Reuters, with a U.S. court which it said shows that Vale was aware of potential bribery or “red flags” when the companies partnered to develop Simandou, one of the world’s biggest iron ore deposits containing billions of tonnes of the steelmaking ingredient.

The companies are locked in a long-running legal dispute over the joint venture, which was created in 2010 but has since been abandoned. Simandou remains undeveloped.

“The Vale Board should assume full responsibility for their misconduct, publicly clear BSGR of all wrong doing and compensate fully for the commercial value of the loss to BSGR, which could run into billions of dollars,” Steinmetz said in an emailed statement.

Vale has accused BSGR of fraudulently inducing it to buy a 51 percent stake in the joint venture to develop the mine, a concession later by the Guinean government in 2014 after it said it had evidence BSGR obtained the rights through corruption.

Vale on Friday denied BSGR’s accusation, saying it was confident that any court or tribunal would find it in the right.

“Vale is confident that the effort will continue to be rejected by any court or tribunal considering the full record of Vale’s extensive diligence efforts and the extraordinary means that Steinmetz undertook to conceal his fraud from Vale,” the Brazilian company said in a statement.

Guinea’s President Alpha Conde at the time said Vale was not involved in, or aware of, the corruption.

BSGR, which went into administration in 2018, has denied any wrongdoing in obtaining the Simandou rights. It walked away from the project last year as part of a settlement with Guinea’s government in which both parties agreed to drop outstanding legal action. [nL5N20K1QG]

Vale filed a U.S. lawsuit in April 2019 to force BSGR to pay it about $1.25 billion, as mandated by a London arbitrator in the dispute, plus interest and expenses, amounting to a total of more than $2 billion. [nL1N2260CM]

The lawsuit is still active.

eSwatini cuts rates further in response to virus

MBABANE (Reuters) - The central bank of eSwatini has cut its main lending rate by 50 basis points to 4%, its latest reduction in recent months in response to the outbreak of the coronavirus.

In a statement on Friday, the bank cited the impact of the pandemic on its growth prospects, with the economy expected to shrink by 6.16% in 2020 under a pessimistic scenario.

Its rate decisions have also aligned with those in neighbouring South Africa, which also cut its main lending rate by 50 basis points on Thursday. eSwatini’s local currency is pegged to the South African rand.

Tunisia's GDP shrank 1.7% in the first quarter of 2020

TUNIS (Reuters) - Tunisia’s GDP shrank by 1.7% year-on year in the first quarter of 2020, the State Statistics Institute said on Friday, as the vital tourism sector has been hit hard by the coronavirus crisis.

That compared with growth of 1.1 percent in the same quarter last year.

Authorities in the North African country expect the economy to shrink by 4.3% this year, which would be its steepest contraction in more than 60 years.

Tunisia started relaxing restrictions on movement and businesses this month, allowing half of government employees to return to work, but the pandemic is hammering its tourism sector which contributes nearly 10% of gross domestic product and is a key source of foreign currency.

Tourism revenues fell in the first three months of 2020 by 27 percent compared to the same period in 2019 to 1 billion dinars, as western tourists deserted Tunisia’s hotels and resorts.

Finance Minister Nizar Yaich said last month in a letter to the International Monetary Fund that the tourism sector could lose $1.4 billion and 400,000 jobs this year due to the new coronavirus pandemic. [nL8N2BG8WL]

Tunisia’s need for external funding will double to about 5 billion euros this year from about 2.5 billion euros previously expected, Prime Minister Elyes Fakhfakh has said.

Lufthansa agrees €9bn rescue deal with Germany

Lufthansa has agreed a rescue deal worth €9bn (£8bn) with the German government that saves it from collapse.

The German airline has been severely affected by a decline in travel due to the coronavirus and closed its budget airline Germanwings in April.

The German government will take a 20% stake in the firm, which it intends to sell by the end of 2023.

But the deal still has to be approved by the firm's shareholders and the European Commission.

As part of the rescue package, the German government will also inject €5.7bn in non-voting capital, which is known as a "silent participation".

Part of these funds can be converted into an additional 5% equity stake, which would enable the government to veto any potential hostile takeover bids.

European markets rose on the news, with Lufthansa shares closing 7.5% higher, while Germany's Dax jumped 2%. The Frankfurt-based index closed at its highest level since 6 March.

The Cac 40 index in France meanwhile rose 1.5%, and the pan-European Euro Stoxx 50 climbed 1.1%.

Global airlines group IATA has said it expects airline passenger revenues to drop by more than 40% this year and warned that more than 25 million jobs in aviation and related industries are at risk.

"The support that we're preparing here is for a limited period," said Germany's Finance Minister Olaf Scholz at a press conference on Monday.

"When the company is fit again, the state will sell its stake and hopefully ... with a small profit that puts us into a position to finance the many, many requirements which we have to meet now, not only at this company."

The bailout deal is the result of weeks of talks between Lufthansa and the German government about financial aid and will help save up to 10,000 jobs.

The German government has set aside a fund of €100bn to help shore up companies struck down by the pandemic.

The airline had previously been operationally healthy and profitable with good prospects, but had run into trouble because of the coronavirus lockdown measures implemented by governments across the world.

Lufthansa decommissioned more than 40 aircrafts in April and said it would look to offload aircrafts in its other businesses, which include Austrian Airlines, Swiss and Eurowings.

The airline had warned that it does not expect demand for air travel to return for "years".

Lufthansa is not the only national carrier that has needed to be rescued. On Sunday, the French and Dutch governments pledged a lifeline of more than €11bn in loans and guarantees to support Air France-KLM.

Lufthansa has the most passenger traffic in Europe, followed by Air France-KLM, according to aviation analysts, the Centre for Aviation.

The UK government has indicated that it is preparing its own plan to rescue large British firms.

Last week, the bailout plan, named "Project Birch", was mentioned by Transport Secretary Grant Shapps in Parliament during a discussion about the survival of the aviation industry.--BBC

All non-essential shops to reopen from 15 June - PM

All non-essential retailers will be able to reopen in England from 15 June, Boris Johnson has announced, as part of plans to further ease the lockdown.

However, the move is "contingent on progress in the fight against coronavirus", and retailers will have to adhere to new guidelines to protect shoppers and workers, the PM added.

Outdoor markets and car showrooms will be able to reopen from 1 June.

It comes as the number of coronavirus deaths in the UK rose by 121 to 36,914.

Mr Johnson said new guidance had been published for the retail sector "detailing the measures they should take to meet the necessary social distancing and hygiene standards".

"Shops now have the time to implement this guidance before they reopen," he said.

"This will ensure there can be no doubt about what steps they should take."

'Much-needed clarity'

He added: "I want people to be confident that they can shop safely, provided they follow the social distancing rules for all premises."

Commenting on the development, Business Secretary Alok Sharma said: "Enabling these businesses to open will be a critical step on the road to rebuilding our economy, and will support millions of jobs across the UK."

The British Retail Consortium said it welcomed the announcement, adding it provided "much-needed clarity on the route ahead".

A spokesman for the Confederation of British Industry added that the new guidance would help retailers to open "safely and securely".

However, not all businesses are pleased with the announcement.

The British Association of Independent Retailers said many small shops had been preparing to open from next week, adding: "It is therefore a little disappointing for the smaller retailers not to be able to open until June 15, especially as they can make it safe to do so."

'Extremely welcome news'

This is extremely welcome news for a sector that was struggling even before the pandemic.

The problem of falling footfall on the High Street looked like a walk in the park compared to months of shuttered windows.

When 15 June comes around, shops will look rather different to what we've been used to, with limits to the number of people allowed in, and restrictions on how people move around shops.

There might also be screens in place, and hygiene products on arrival.

However, some of these measures will be harder to implement than others - such as encouraging customers to avoid handling products while browsing.

The announcement at the daily Downing Street coronavirus briefing came after a lengthy press conference involving the PM's chief adviser, Dominic Cummings.

Mr Cummings has been facing calls to resign after it emerged he had driven his child and ill wife 260 miles from London to County Durham during lockdown.

But at the press conference, the former Vote Leave chief said he did not regret his actions and believed he had acted "reasonably" within the law.

On the subject of why he then drove his family to the town of Barnard Castle - 15 days after he had displayed symptoms - he said he was testing his eyesight to see if he could make the trip back down to London.

Asked about the matter at the daily briefing, Mr Johnson said: "Do I regret what has happened? Yes, of course I do regret the confusion and the anger and the pain that people feel."--BBC

Spain to stop quarantining arrivals from 1 July

Foreign visitors to Spain will no longer have to undergo a two-week quarantine from 1 July, the government has announced.

It said the measure had been finalised in a cabinet meeting on Monday.

Foreign Minister Arancha Gonzalez Laya had previously said the requirement would be lifted in July, without giving a date.

The news comes as the UK government prepares to bring in its own 14-day quarantine policy from 8 June.

Travel firms and other industry bodies say the UK should relax the measure for visitors arriving from countries where people are at a lower risk of contracting the coronavirus.

Spain normally attracts 80 million tourists a year, with the sector providing more than 12% of the country's GDP.

Opening up the holiday market again before the summer season is over is seen as crucial to the Spanish economy.

But under the UK's new policy, any tourists returning home after taking holidays in Spain and most other foreign destinations would have to spend two weeks in self-isolation.

Resuming flights

Several airlines including EasyJet, Jet2 and Ryanair have announced that they plan to resume flights and holidays soon.

Easyjet will be resuming flights from 22 airports across Europe from 15 June, as well as regional flights across the UK. But there will only be one international flight from the UK - from Gatwick to Nice in France.

Jet2 is planning to resume full services from 1 July, and will fly to several Spanish and Italian destinations, before opening up to Greece and Croatia later in the year.

And Ryanair will be restoring 40% of its flights from 1 July and will resume flights from most of the 80 airports it flies from across Europe.

Business groups wrote to Boris Johnson on Sunday saying the quarantine would have "serious consequences" for the economy and calling for "air bridge" deals to be struck with other nations.

In their letter to the prime minister, bosses of airlines EasyJet, Tui, Jet2 and Virgin Atlantic, as well as industry bodies Airlines UK, the British Chambers of Commerce, UK Hospitality and manufacturing association Made UK said they had "serious reservations" about a "blanket approach" to all arrivals into Britain.

Instead, they are asking for a more "targeted, risk-based" approach when establishing air links with countries that have high infection rates from the pandemic.

"The alternative risks major damage to the arteries of UK trade with key industry supply chains, whilst pushing the UK to the back of the queue as states begin conversations for opening up their borders," says the letter.--BBC

Volkswagen loses landmark German 'dieselgate' case

Germany's highest civil court has ruled that Volkswagen must pay compensation to a motorist who had bought one of its diesel minivans fitted with emissions-cheating software.

The ruling sets a benchmark for about 60,000 other cases in Germany.

The plaintiff, Herbert Gilbert, will be partially reimbursed for his vehicle, with depreciation taken into account

VW said it would now offer affected motorists a one-off payment. The amount will depend on individual cases.

The company has already settled a separate €830m (£743m) class action suit involving 235,000 German car owners.

VW said in a statement on Monday: "For the majority of the 60,000 pending cases, this ruling provides clarity as to how the [Federal Court of Justice] assesses essential questions in German diesel proceedings.

"Volkswagen is now seeking to bring these proceedings to a prompt conclusion in agreement with the plaintiffs. We will therefore approach the plaintiffs with the adequate settlement proposals."

VW has paid out more than €30bn in fines, compensation and buyback schemes worldwide since the scandal first broke in 2015.

The company disclosed at the time that it had used illegal software to manipulate the results of diesel emissions tests.

It said that about 11 million cars were fitted with the "defeat device", which alerted diesel engines when they were being tested. The engine would then change its performance in order to improve the result of the test.

Volkswagen has faced a flurry of legal action worldwide, including the UK.

About 90,000 motorists in England and Wales have brought action against VW as well as Audi, Seat and Skoda, which are also owned by Volkswagen Group.

Last month, their case cleared its first hurdle in the High Court, when a judge ruled that the software installed in the cars was indeed a "defeat device" under EU rules.

The carmaker's current and former senior employees are facing criminal charges in Germany.--BBC

How Chinese rivals are trying to take Zoom's crown

Video meetings have become hugely important as the world adapts to the "new normal" of the pandemic.

Even as lockdown rules ease, they're a safe, convenient and free way to stay in touch for business and socialising.

Zoom has become the app of choice for millions, overshadowing rival products from much larger companies such as Microsoft and Google.

But the firm is now facing major challenges from some of China's biggest technology companies.

Beijing temporarily blocked the international version of Zoom in September, leaving the market wide open to local players, including Alibaba's DingTalk and Tencent-backed VooV.

Since then two big Chinese video conferencing apps have significantly increased the size and reach of their services.

Alibaba's DingTalk says it is used by more than 10 million businesses and organisations and in excess of 120 million students across China.

As more people have been forced to work from home DingTalk has tripled the number of participants that can join a meeting to just over 300.

In April, Alibaba launched the global version of the app, DingTalk Lite, across key Asian markets, including Japan, Singapore and Hong Kong. It is now available in Japanese, English, and Traditional Chinese.

Two weeks earlier, Chinese gaming giant Tencent also made its video conferencing tool available overseas.

VooV is the international version of Tencent Meeting, which was launched in December last year, and is currently available in several countries including India, Japan and Singapore. It can also host 300-strong meetings.

"With the mounting number of new Covid-19 cases outside of China, we look forward to providing our users in other countries and regions with the capabilities to work remotely. As we move forward, we plan to roll out the service across the world, in compliance with local regulations," Lori Wu, vice-president of Tencent Cloud said as VooV was launched.

Zoom came under further restrictions in China from the start of this month.

"In mainland China, new user registration is currently limited to enterprise customers who sign up through authorised sales representatives. Free users in mainland China may continue to join meetings hosted by registered customers," a company spokesperson told the BBC.

According to Zoom's own numbers it now has 300 million daily active meeting participants, although it does not publish figures on daily users or registered users.

There are huge amounts of money at stake, with the global market for teleconferencing technology predicted to reach $16bn (£9.2bn) by 2030, up from $6bn last year, according to business forecasting and analysis company Transparency Market Research.

Software analyst Rishi Jaluria from DA Davidson highlighted how he sees different apps trying to get a slice of this market.

"Zoom is primarily an application for businesses, not consumers. The Covid-19 pandemic and the subsequent lockdowns have led to rapid consumer adoption of Zoom, but remember, Zoom isn’t trying to monetise those consumers through advertising or data."

"On the other hand, the owners of DingTalk and VooV, Alibaba and Tencent, respectively, have multiple businesses that rely on advertising and user data," he added.--BBC

Government draws up plan to rescue key firms

The UK government has indicated it is prepared to rescue large British companies severely affected by the coronavirus crisis.

The Treasury said "last resort" support could be made available if a firm's failure would "disproportionately harm the UK economy".

The move follows indications that a number of big firms are seeking government help to survive the crisis.

These include Jaguar Land Rover, which is in talks to secure a £1bn loan.

The government has already put in place various initiatives to help companies weather the pandemic, including loan programmes, deferring of tax payments and the furlough scheme, which allows workers to receive 80% of their salary paid by the government.

According to latest figures, eight million workers are covered by the furlough scheme which has been extended until the end of October. But from August, businesses will be expected to meet part of the cost of the scheme.

Concern is growing that some big firms are still in difficulties even after making use of these options.

'Tsunami of job losses'

The bailout plan, named "Project Birch", was mentioned by Transport Secretary Grant Shapps in Parliament last week when discussing the future of the aviation industry.

It could involve the state taking stakes in companies, although extending existing loans would be preferable.

Unite the union welcomed the plan but urged the government to act quickly.

"There is no more time to lose if we are to prevent a tsunami of job losses from sweeping through communities this summer," said Unite assistant general secretary for manufacturing, Steve Turner.

"We still need to ensure that proposed changes to the job retention scheme do not undermine a plan to recover and rebuild and that workers continue to get their wages."

A Treasury spokeswoman said: "We have put in place unprecedented levels of support to help businesses get through this crisis.

"Beyond that, many firms are getting support from established market mechanisms, such as existing shareholders, bank lending and commercial finance.

"In exceptional circumstances, where a viable company has exhausted all options and its failure would disproportionately harm the economy, we may consider support on a 'last resort' basis.

"As the British public would expect, we are putting in place sensible contingency planning and any such support would be on terms that protect the taxpayer."

The BBC understands the Treasury would have to notify Parliament of any spend incurred, and although companies might seek financial assistance, this does not mean such support will be given.

Companies in trouble

On Saturday, Sky News reported that Tata Steel, Britain's biggest steel producer, had approached both the Welsh and UK governments for financial aid that could run into hundreds of millions.

Earlier this week, Welsh MP Stephen Kinnock told parliament that Tata Steel, which owns the steelworks in Port Talbot, needs around £500m in order to survive the pandemic.

And according to the Financial Times, aviation industry bosses have been asking the government for a "long-term investment facility" that would help to support supply chains.

Jim O'Neill, former Treasury minister and ex-chief economist at Goldman Sachs, told the newspaper he had been in discussion with government officials about creating a public sector-owned funding body to take stakes in firms that would be "inherently stable" in times of normal economic activity.--BBC

Fresh UK review into Huawei role in 5G networks

The UK government is conducting a new review into the impact of allowing Huawei telecoms equipment to be used in British 5G networks.

The National Cyber Security Centre (NCSC) involvement comes after the US brought fresh sanctions against the Chinese company, citing security fears.

In January, the UK resisted US pressure to ban Huawei from contributing to 5G.

A NCSC spokesman said: "The security and resilience of our networks is of paramount importance."

"Following the US announcement of additional sanctions against Huawei, the NCSC is looking carefully at any impact they could have to the UK's networks."

The sanctions restrict Huawei from using US technology and software to design its semiconductors.

The US Department of Commerce is concerned Huawei has flouted regulations implemented last year that require the firm to obtain a licence in order to export US items.

It says Huawei got around this rule by using US semiconductor manufacturing equipment at factories in other countries.

'Reliable network'

The UK government had previously approved a limited role for Huawei in building the country's new mobile networks.

The tech giant was banned from supplying kit to "sensitive parts" of the network, known as the core. In addition, it is only allowed to account for 35% of the kit in a network's periphery, which includes radio masts.

UK mobile operators were told by the NCSC - part of the intelligence agency GCHQ - that they would have three years to comply with caps on the use of Huawei equipment in their networks.

Responding to the review, Victor Zhang, vice-president at Huawei, said: "Our priority remains to continue the rollout of a reliable and secure 5G networks across Britain."

He added: "We are happy to discuss with NCSC any concerns they may have and hope to continue the close working relationship we have enjoyed for the last 10 years."

Coronavirus: Huawei urges UK not to make 5G U-turn after pandemic

Huawei set for limited role in UK 5G networks

Critics argue it is a security risk to allow the Chinese company to play any role at all in the UK's 5G network, due to fears it could be used by Beijing to spy on or even sabotage communications.

In March, a backbench rebellion within the Conservative party signalled efforts to overturn the move. And on 4 April, a group of 15 Conservative MPs called for a rethink on relations with China in their own letter to the Prime Minister, written a day before he was admitted to hospital.

In response, Huawei wrote an open letter to the UK government, urging it not to "disrupt" Huawei's involvement in the rollout of 5G.

In January, after a prolonged and difficult debate, the government decided to allow Huawei to play a role in 5G but to limit its market share to 35% of the network and keep it out of the most sensitive parts.

But there was a significant backbench rebellion over the issue in March and pressure has grown domestically since the Coronavirus crisis began to take a tougher line on China.

At the same time the Trump administration has not let up in its campaign for the UK and other allies to exclude Huawei entirely.

Even though this review is based on the technical considerations about the impact of US sanctions, it could potentially offer the government a route to move away from its earlier decision and exclude the company or impose further limits - although that may involve economic costs at home and increased tension with Beijing.

Huawei stressed that the coronavirus pandemic had placed "significant pressure" on British telecoms systems and highlighted how many people in the country - particularly those living in rural communities - do not have good access to the internet.

5G, which promises faster mobile internet data speeds, a stable network that can handle more connections, and more bandwidth for a multitude of different technological applications, has been touted as being a way to bridge the digital divide in areas where broadband internet rollouts have been inconsistent.

According to latest data released by Huawei, the firm has so far won 91 5G contracts across the world.

Huawei has always denied that it would help the Chinese government attack one of its clients.

The firm's founder has said he would "shut the company down" rather than aid "any spying activities".

Three out of four of the UK's mobile networks had already decided to use and deploy Huawei's 5G products outside the core in the "periphery", namely Vodafone, EE and Three.

Two of them - Vodafone and EE - now face having to reduce their reliance on the supplier, as more than 35% of their existing radio access network equipment was made by it.--BBC

Could you have to pay your bank to save money?

High street banks in countries with negative interest rates have so far been reluctant to pass them on to customers

Countries are being forced to use extreme measures to keep the economy afloat amid the coronavirus crisis.

Now, the Bank of England has signalled that it may take the cost of borrowing below zero.

Last month, the Bank started new work on how negative interest rates could affect banks and the wider economy.

But what exactly are negative interest rates? And could a world where savers are penalised and borrowers rewarded end up doing more harm than good?

What are negative interest rates?

The term "interest rates" is often used interchangeably with the Bank of England base rate.

Described as the "single most important interest rate in the UK", the base rate determines how much interest the Bank of England pays to financial institutions that hold money with it, and what it charges them to borrow.

High street banks also use it to determine how much interest they pay to savers, as well as what they charge people who take out a loan or mortgage.

The Bank of England usually lowers interest rates when it wants people to spend more and save less.

It cut them to a fresh low of 0.1% in March to try to stimulate the economy amid the coronavirus pandemic.

In theory, taking interest rates below zero should have the same effect. But in practice, it's a bit more complicated.

After all, why would anyone pay to stash money in a savings account or lend someone money, when they can keep the cash at home for free?

Why might this happen now?

The Bank of England's number one job is to keep prices across the economy rising steadily every year.

This is known as the Bank's inflation target, which is set at 2% by the government.

Inflation, as measured by the consumer prices index (CPI), fell to 0.8% in April, from 1.5% in March.

While this means the cost of living is rising more slowly, if inflation remains low for too long, bosses start factoring that into pay reviews. This can then dampen consumer confidence and spending.

Central banks have been cutting interest rates to spur inflation for years. But as rates approached zero across the developed world, a handful went a step further.

Sweden, Switzerland, Japan and the 19 nations of the eurozone all took interest rates below zero.

In Switzerland, negative interest rates have also helped to discourage investors from pouring money into the country during times of uncertainty.

How will this affect savers?

British savers have already seen their returns dwindle in recent years.

The average UK instant access account pays just 0.45%, according to the Bank of England, while accounts that require you to lock your money away currently offer an average return of less than 1%.

In countries with sub-zero interest rates, commercial banks have passed them on to big companies.

However, the evidence suggests there is a very high bar to pass the pain on to ordinary savers.

Christina Nyman, chief economist at Swedish lender Handelsbanken, says charging savers to put money in their own accounts is seen as "taboo" in Sweden.

She says: "Competition is fierce, and households are ready to move their money to another bank, so nobody wants to lose business."

Swiss banks UBS and Credit Suisse only impose negative rates on deposits of more than 2 million Swiss francs.

In Germany, where some banks impose charges on deposits of more than €100,000 (£90,000), some people have started stashing their money in vaults.

German demand for bank vaults has risen since the European Central Bank introduced negative interest rates.

According to Germany's central bank, physical cash holdings by families and businesses there have almost trebled to €43.4bn since the European Central Bank (ECB) introduced a negative deposit rate in 2014.

But David Oxley at Capital Economics says there hasn't been a wider shift towards cash because most people still prefer the security and convenience of keeping it in the bank.

Putting it in a vault "runs the risk of the money either being lost, stolen, or damaged," he says. "Bank deposits cannot catch fire, but banknotes can."

What is the UK's inflation rate?

What is GDP?

How will we pay for the coronavirus crisis?

What about borrowers?

Negative rate mortgages already exist. Last year, Danish bank Jyske announced that it would effectively pay borrowers 0.5% a year to take out a 10-year loan.

James Pomeroy, an economist at HSBC, says this was only possible because of the nature of the mortgage market.

When someone in Denmark applies for a home loan, Danish banks act as a middleman between potential borrowers and investors.

"In Denmark the banks don't take the hit, investors do," says Mr Pomeroy. "Banks are then charging higher product fees, so have actually made money off of this."

But negative rate mortgages are unlikely to be offered in the UK any time soon.

When UK interest rates were slashed to 0.5% in March 2009, some borrowers thought they could be in line for a payment.

Around 1,500 Cheltenham and Gloucester customers had a mortgage that tracked 1.01 percentage points below the Bank of England base rate.

But any prospect of a windfall was quickly dashed when financial regulators described interest payments as "a one-way obligation on the borrower".

Around 1,500 Cheltenham & Gloucester borrowers did not benefit from negative interest rates when the Bank of England slashed rates to 0.5% in 2009.

What are the side effects of negative interest rates?

Negative interest rates hit bank earnings by squeezing the gap between the money they make on loans and what they pay to savers.

"If not passed on to customers, negative rates would hurt bank profitability, especially at a time when they are expected to be hit by crisis-related loan losses," says Danae Kyriakopoulou, chief economist at the Official Monetary and Financial Institutions Forum (OMFIF).

Negative interest rates pose a particular challenge to building societies, which hold around £1 of every £5 in British savings accounts.

While commercial banks can access cheaper borrowing by tapping financial markets, building societies must raise at least half their funding from individual savers.

The Bank of England is in the process of assessing the impact of negative rates on UK bank and building society profits, as well as how they affect insurers and pension funds.

It is examining whether changing a scheme that rewards small business lending with access to cheap money, or shielding a share of the money high street lenders park at the central bank from negative rates, can help to offset the hit to profits.

Ms Kyriakopoulou says more work needs to be done before negative rates can be deployed in the UK.

"One advantage in the UK, compared to say the euro area, is that we've seen strong coordination between the Treasury and the independent Bank of England in terms of their crisis response measures," she adds.

"Provided negative rates were also accompanied by continued support to the banking sector, this would help cushion the negative impact of the policy on the banking sector."--BBC

INVESTORS DIARY 2020

Company

Event

Venue

Date & Time

Companies under Cautionary

Bindura Nickel Corporation

Padenga Holdings

Delta Corporation

Meikles Limited

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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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