Major International Business Headlines Brief::: 27 May 2020

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Major International Business Headlines Brief::: 27 May 2020

 


 

 


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

 


 

 


 

 

ü  France announces €8bn rescue plan for car industry

ü  Lufthansa agrees €9bn rescue deal with Germany

ü  'Short-lived' rebound in house hunter demand

ü  Warner Music Group eyes $13.2bn valuation

ü  New York Stock Exchange trading floor reopens

ü  Climate change 'could have greater impact'

ü  Lithium producers must wait as pandemic slows electric vehicle revolution

ü  South African Airways aims to resume domestic flights in mid-June

ü  Coronavirus to cut S.Africa's 2020 mining output by 8-10% -industry body

ü  Absa warns H1 profit likely to slump by over 20%

ü  Nigeria's Bonga oil export to shut for maintenance - port source

ü  Gold eases as equities rally, Hong Kong woes limit losses

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

ü  Tiger Brands eyes 'significant' job cuts on coronavirus

ü  McLaren to cut 1,200 jobs as virus hits demand

ü  Aston Martin chief leaves after 94% share price collapse

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


France announces €8bn rescue plan for car industry

The French government has announced an €8bn (£7.1bn) rescue plan for its car industry, which has been severely impacted by the coronavirus pandemic.

 

President Emmanuel Macron's proposal includes €1bn to provide grants of up to €7,000 to encourage citizens to purchase electric vehicles.

 

It also puts money toward investments to make France a centre for electric vehicle output.

 

The plan comes as the industry braces for thousands of job cuts.

 

In return for the relief, the two main French car producers Renault and PSA have promised to focus production in France.

 

"We need a motivational goal - make France Europe's top producer of clean vehicles by bringing output to more than one million electric and hybrid cars per year over the next five years," President Macron told reporters at a press conference at the Valeo car factory in Etaples, northern France on Tuesday.

 

He added that no car model currently produced in France should be manufactured in other countries.

 

To help sell the 400,000 vehicles languishing in car dealerships due to the coronavirus lockdown measures, President Macron said the government would also give people upgrading to a less polluting car a €3,000 bonus, as part of a scheme open to 75% of French households.

 

"Our fellow citizens need to buy more vehicles, and in particular clean ones. Not in two, five or 10 years - now," he stressed.

 

Like in other countries, France's car industry has ground to a halt - with an 80% fall in sales and a backlog of nearly half a million new vehicles waiting for owners.

 

President Macron - in his new post-virus spend-and-invest mode - wants to act now not just to rescue the industry from the immediate crisis, but also to prepare it for a future that will be both electric and he hopes much less dependent on foreign and in particular Chinese suppliers.

 

To boost demand now, the grants for households or companies that buy new electric cars are increased, as is the so-called conversion bonus for trading in a polluting car for a cleaner one.

 

The number of battery charge-points will be tripled to 100,000 by the end of next year.

 

A billion euros in investment will be directed into research and modernising production, and there'll be a €5bn loan for Renault - part of the return for which is a promise by Renault to join a Franco-German consortium to develop car batteries.

 

The aim, Mr Macron said, is to have one million electric cars being made in France every year by 2025.

 

According to IHS Markit, France was Europe's top producer of electric and hybrid cars in 2019, with almost 240,000 vehicles, but Germany is set to overtake it by the end of this year.

 

Factory closures

The €8bn plan does not include an expected €5bn loan for embattled French carmaker Renault, which in February reported its first annual loss in a decade.

 

The company has been planning to unveil a big restructuring plan on 29 May that was reportedly likely to see it close three factories in Choisy-le-Roi, Dieppe and Caudan. A fourth factory, Flins, will be converted into an electric battery factory.

 

Mr Macron said on Tuesday that Renault had agreed to join a Franco-German project to produce electric batteries for the rechargeable auto industry, a step the government had set as a condition for the loan.

 

But Mr Macron said the government would not sign off on the deal until Renault's management and unions had concluded talks over the carmaker's French workforce and plants in France.

 

Mr Macron only guaranteed the future for employees of Renault's factories in Mauberge and Douai, however. And French daily national newspaper Le Figaro reported exclusively on Tuesday that Renault is planning to cut 5,000 jobs by 2024.

 

The 370 employees that work at the Fonderie de Bretagne, near Lorient in north-western France, are concerned that the carmaker intends to close the factory.

 

They have been protesting since Monday, blockading the factory, and told French national radio network Europe 1 that they intend to march on the streets of Lorient on Wednesday.--BBC

 


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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 aircraft in April and said it would look to offload aircraft 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

 

 

 

'Short-lived' rebound in house hunter demand

Demand from property hunters rebounded as curbs on the sector were lifted in England - but the trend may be short-lived, analysis suggests.

 

Buyer demand rose by 88% in the week estate agents were told they could resume viewings and people could move again, property portal Zoopla said.

 

However, actual sales remained sluggish, and the analysis suggests demand could fall again.

 

A tough outlook for jobs could affect people's ability to move home.

 

For those who do still have the money to move, Zoopla echoed others in suggesting residents may have spent lockdown rethinking what they want from their home.

 

Another property portal, Rightmove, reported a return to pre-crisis levels of browsing and enquiries from people looking to buy or rent a home at the point restrictions were lifted in England on 13 May.

 

Now, Zoopla's UK Cities House Price Index has said that the rebound in demand went beyond the level seen at the start of March.

 

Portsmouth, Southampton, Oxford, Liverpool and Manchester all saw demand rise.

 

Different markets

This trend was far more muted where the restrictions remained - in Scotland, Wales, and Northern Ireland - and also in London, where the market had already been relatively slow.

 

The analysis found the rebound would be temporary, after people who had been stuck at home and thinking of moving met with the realities of less settled job prospects.

 

"Many households are likely to have re-evaluated what they want from their home. This could well explain the scale of the demand returning to the market," said Richard Donnell, director of research at Zoopla.

 

He said economic uncertainty was building and that would eventually lead to greater caution among buyers and sellers.

 

A small survey, as part of the research, found that 41% of those asked had put moving plans on hold owing to the uncertainty, loss of income, or future prospects for their finances.

 

Lockdown had meant thousands of people put house sales on hold.

 

Residential property sales in the UK in April hit their lowest monthly level since comparable records began in 2005, with 38,060 transactions during the month, according to provisional numbers from HM Revenue and Customs (HMRC).

 

This was less than half the level seen in the same month the previous year.

 

Great uncertainty remains over the level of recovery in sales, as well as prices.--BBC

 

 

Warner Music Group eyes $13.2bn valuation

Warner Music Group (WMG), the record label of Ed Sheeran and Bruno Mars, estimates it is worth up to $13.2bn (£10.7bn), as it prepares to list its shares on the Nasdaq stock exchange.

 

That is four times what Sir Leonard Blavatnik paid in 2011 for WMG - the world's third largest record label.

 

At the time, the music industry was in the depths of a multi-year slump, but sales have improved more recently.

 

Warner Music said it is hoping to raise $1.8bn via the listing.

 

The firm had put its flotation plans on hold as the coronavirus pandemic cast financial markets into turmoil this spring.

 

But shares have been on the upswing recently, as investors cheer relief efforts by governments and central banks, hoping for a quick economic rebound.

 

Warner Music said existing shareholders would sell 70 million shares priced at $23-$26 apiece. The proceeds would go to Mr Blavatnik's company, Access Industries, which will retain majority voting power.

 

The firm represents more than 80,000 songwriters and composers, from Beethoven to Madonna. It reported a profit of $256m in its most recent financial year, on revenue of $4.5bn.

 

The industry's recovery has been helped by the rise of paid streaming services such as Apple and Spotify. In 2019, global music revenues rose 8.2% to $20.2bn - more than half of which came from streaming services, according to industry group International Federation of the Phonographic Industry (IFPI).

 

Ukrainian-born Mr Blavatnik now has joint UK-US citizenship and received a knighthood in 2017 for services to philanthropy.

 

He sold a stake in Russian oil company TNK-BP for $7bn in 2013 and was an early investor in the Apple-owned Beats music subscription service.--BBC

 

 

 

 

New York Stock Exchange trading floor reopens

The New York Stock Exchange (NYSE) has reopened its trading floor after a two-month closure due to the coronavirus pandemic.

 

But as new social distance rules come into effect, the exchange looks and feels very different.

 

The NYSE is one of the few bourses to still feature floor trade - most have shifted to fully-electronic trading.

 

New York City has been hit hard by the outbreak with some 200,000 cases and more than 20,000 deaths.

 

Financial markets have continued to trade throughout the pandemic, but the exchange's trading floor was closed from 23 March and activity temporarily moved to fully-electronic trading to protect workers.

 

New York Governor Andrew Cuomo was on hand to ring the bell that re-started in-person trade, a sign of the symbolic weight attached to the reopening.

 

New rules

US shares gained on Tuesday amid investor enthusiasm about economic rebound, but the new NYSE rules are a reminder that a full return to business will take time.

 

"It's not about returning to normal," NYSE president Stacey Cunningham told the BBC. "It's about living with this global pandemic until there's a vaccine."

 

She added that she had faced "no pressure" from the Trump administration, which follows financial markets closely and has generally supported a rapid reopening.

 

Under the NYSE changes, only a quarter of the normal number of traders will be allowed to return to work.

 

Traders must also avoid public transport, wear masks and follow strict social distancing rules, with newly fitted transparent barriers to keep people apart.

 

They will also be screened and have their temperatures taken as they enter the building. Anyone who fails pass the check will be barred until they test negative for coronavirus or self-quarantine in accordance with US government guidelines.

 

To return to their jobs, floor traders also have to sign a liability waiver that prevents them from suing the NYSE if they get infected at the exchange.

 

Some large financial companies, such as Morgan Stanley, have reportedly balked at signing, but Ms Cunningham defended the waiver as a way to ensure that traders, which are not employed by the exchange, abide by the new rules.

 

"We need to make sure that they're committed to following this new norm," she said.

 

Visitor ban

NYSE, which is owned by Intercontinental Exchange, is the world's largest stock exchange in terms of the total market capitalisation of listed companies.

 

The 228-year-old exchange last closed its doors on 29 October 2012 due to Hurricane Sandy. It also shut for four sessions in the aftermath of the 9/11 terrorist attacks in 2001.

 

But the bourse resisted closing at the start of the pandemic and the closure reignited debate about the necessity of the floor in an era dominated by electronic activity.

 

Ms Cunningham said trading has functioned smoothly with the floor closed, but she believed reopening will further ease volatility and help smaller firms that rely on in-person trades for their business.

 

"We are relevant we are necessary and WE ARE BACK," floor trader Peter Tuchman wrote on Twitter ahead of the reopening.

 

For most people outside the financial world, NYSE's trading floor is a rare glimpse into the seemingly opaque workings of the global markets as well as being a colourful setting for companies to showcase their stock market debuts.

 

The new regulations mean that the NYSE's high-profile opening bell events and stock market debut celebrations have been put on hold as visitors are banned.

 

Media organisations that usually broadcast from the trading floor won't be allowed back until further notice.

 

In the BBC interview, Ms Cunningham also addressed a proposal by US lawmakers to require companies that sell shares in the US to abide by American accounting rules and audits, or face de-listing.

 

The move, which comes as US-China tensions increase, is aimed at Chinese companies. The Senate passed the measure last week and the House is expected to take up the measure before the end of the summer.

 

Ms Cunningham in the past has said de-listing Chinese companies generally would simply shift their business elsewhere.

 

On Tuesday, she said lawmakers should "balance" investor protections and investor choice, but that the exchange backs efforts that would enhance the information supplied to investors.

 

"Any measures to enforce that are highly supported by us," she said.

 

Trading - but not as we know it

 

Before the coronavirus, I was a regular on the floor of the New York Stock Exchange.

 

It may be one of the great symbols of US capitalism, but it's also, just a workplace for hundreds of traders, market makers, and various bystanders such as journalists.

 

And like so many offices and shop floors it's not somewhere that you would ever associate with social distancing, keeping two metres apart and wearing masks. Quite the reverse - face-to-face stock trading is sometimes close to a contact sport, as is reporting from the floor.

 

So the NYSE has to take its reopening very slowly. It will be a relief for some traders to be back to work, but it's not going to look like the trading floor we're all used to seeing for quite some time.--BBC

 

 

 

Climate change 'could have greater impact'

The boss of energy giant SSE has warned that a failure to deal with climate change could eventually have a greater economic impact than coronavirus.

 

Alistair Phillips-Davies wants the UK government to encourage private investment in renewables by giving the green light to big new projects.

 

They include hydrogen and carbon capture plants and boosting electric vehicles.

 

SSE has outlined its "greenprint" in a letter to the prime minister.

 

Mr Phillips-Davies said: "While it is still too early to predict with confidence the full human, social and economic impact of coronavirus, we can say with certainty that significant investment will be needed to rebuild the UK economy in its wake.

 

"Although not as immediately felt as those from coronavirus, the impacts from a failure to deal with climate change could be even greater.

 

"That's why delivering on the UK's net zero emissions target by 2050, and 2045 in Scotland, is as important as ever."

 

The "greenprint" sets out five areas and 15 "practical, deliverable steps government could take now to rebuild a cleaner and more resilient economy for the future".

 

The steps include deploying the world's most "extensive and efficient" electric vehicle charging infrastructure by 2025, committing to a net zero power sector by 2040, delivering 40GW offshore wind by 2030 and targeting at least 75GW by 2050.

 

'Wall of money'

Mr Phillips-Davies told the BBC's Good Morning Scotland programme there was a global "wall of money" to be invested in new projects, adding: "Green has been and will continue to be very popular."

 

"As we emerge from lockdown, I think it's really important that we see policy from government that points us in the long term.

 

"I think many of these things that we've already signalled around reaching net zero, around banning diesel and petrol cars and I think what we can do now is accelerate that."

 

He added: "I think there's a real win-win to be had from increasing the amount of investments and that's around providing certainty to companies like us who can deploy this technology."

 

Green infrastructure

ScottishPower made a similar case earlier this month as it announced it had signed two separate agreements to develop wind farms in central Scotland that could see investment of more than £150m.

 

Chairman Ignacio Galán said at the time: "As we begin to emerge from the coronavirus crisis, investment in green infrastructure can quickly be delivered, creating jobs and offering immediate economic and environmental benefits.

 

"This will help to support the UK's overall recovery at this critical time."-BBC

 

 

 

 

Lithium producers must wait as pandemic slows electric vehicle revolution

JOHANNESBURG/HOUSTON (Reuters) - The coronavirus pandemic has paused the electric vehicle revolution, forcing producers of battery metal lithium into survival mode with output cuts, expansion delays and sales of major assets.

 

Lithium industry shares have dropped sharply since January as the economic downturn from the pandemic slammed the brakes yet again on the electrification revolution that for years has seemed just around the corner. Investors are giving the cold shoulder to mine developers seeking funding for lithium projects.

 

“This pandemic further kicks the EV can down the road,” said Seth Goldstein, a lithium industry analyst with Morningstar.

 

The holdup will result in a shortage of the white metal available for EV batteries when markets rebound, warned industry analysts, executives and consultants.

 

“We don’t want to spend a great deal on lithium at the moment,” said Vincent Mascolo, chief executive of Ironridge Resources Ltd, which has put its Ghana lithium project up for sale. “Investor appetite is not there.”

 

This year began with expectations that global demand for the white metal would jump 15%, according to Morningstar. The advisory group now expects a 5% drop in demand in 2020.

 

Albemarle Corp has slowed expansion projects in Chile and Australia. Tianqi Lithium Corp, saddled by debt, is selling its controlling stake in the world’s largest lithium mine. SQM said it may shelve lithium expansion plans for the year.

 

Analysts point to Ganfeng Lithium Co’s move this year to take control of an Argentina lithium project from smaller, indebted miner Lithium Americas Corp as the type of opportunistic deals likely during the pandemic.

 

Lithium executives, investors and analysts expect the downturn to roil their industry for at least a year. Some warned it could crimp operations through the middle of the decade depending on how COVID-19 affects EV deployment plans from Ford Motor Co, Volkswagen AG and other automakers.

 

Conventional wisdom holds that low oil prices should encourage consumers to buy internal combustion engine (ICE) vehicles. Still, electric vehicle sales should ultimately rise as environmental concerns have prompted EV subsidies and regulations in China and the European Union. “If you make EVs the only vehicles available on the lot, consumer buying patterns change very fast,” said Devin Lindsay, an automotive analyst at IHS Markit Ltd. And because China and the EU are the world’s biggest EV producers, their regulations are seen as ultimately forcing greater EV adoption in the United States, where fuel prices might usually influence car buying. “For good or bad, this EV thematic is driven by regulations and government incentives, rather than economics,” Paul Graves, chief executive of lithium producers Livent Corp, told Reuters.

 

EVs are expected to become the most-popular vehicles, globally, though the pandemic makes the timing uncertain.

 

“The long-term story is a structural trend toward EV adoption. It’s very well on its way,” said Pedro Palandrani of the Global X Lithium & Battery Technology ETF.

 

 

 

South African Airways aims to resume domestic flights in mid-June

JOHANNESBURG (Reuters) - South African Airways (SAA) aims to resume domestic flights between Johannesburg and Cape Town from mid-June, the cash-strapped airline said on Tuesday, as coronavirus lockdown restrictions ease.

 

SAA, which is under a form of bankruptcy protection, suspended all commercial passenger flights in late March, when the government imposed one of the strictest lockdowns on the African continent.

 

But President Cyril Ramaphosa said in an address to the nation on Sunday that domestic air travel for business purposes would be phased in after June 1, when the country moves to level 3 of a five-level alert system.

 

South Africa is currently on alert level 4, a tougher level of anti-coronavirus restrictions.

 

Ramaphosa did not give an exact date when business travellers would be able to fly domestically, and SAA said it was preparing to resume flights between Johannesburg and Cape Town when permissible.

 

It added it had decided to extend cancellations of all regional and intercontinental flights until the end of June.

 

“SAA is committed to restart further operations on an incremental basis, and will regularly provide updates on progress,” the statement said.

 

 

 

 

Coronavirus to cut S.Africa's 2020 mining output by 8-10% -industry body

JOHANNESBURG/LONDON (Reuters) - South Africa’s mining production is likely to fall by between 8% and 10% this year due to the COVID-19 pandemic, the CEO of industry body the Minerals Council said on Tuesday.

 

Mines across South Africa, the world’s biggest producer of platinum and chrome and a leading producer of gold and diamonds, were forced to shut temporarily when a nationwide lockdown to contain the virus began in late March.

 

“The impact is very big; it’s probably going to end up being something like an 8 to 10% hit on mining production for this year,” Minerals Council CEO Roger Baxter said during a virtual panel discussion between mining chiefs about the industry.

 

Harmony Gold CEO Peter Steenkamp said it would take a month for its mines to fully ramp up from June 1 when the country will allow all mines to operate again at full capacity.

 

Open-cast mines have been allowed to work at full capacity again since May 1, while deep-level mines - where social distancing is more difficult - were restricted to 50%.

 

Steenkamp said he expects Harmony’s acquisition of AngloGold Ashanti’s Mponeng mine to be completed by the end of July, a month later than previously scheduled.

 

Some 196 workers at Mponeng have tested positive for COVID-19, and the mine shut on Sunday as a result.

 

Steenkamp said some of Harmony’s mines are designed for a larger capacity than they are working at currently, making it easier to implement COVID-19 protection measures.

 

“The size of the cages allows us to have more distancing,” he said, adding however that there are some areas where social distancing cannot be maintained.

 

“There are mines that have high levels of infections but we have been quite lucky so far,” he added. Harmony Gold has so far said two employees of a contractor at its Kalgold mine tested positive for COVID-19.

 

 

 

 

Absa warns H1 profit likely to slump by over 20%

JOHANNESBURG (Reuters) - South African lender Absa said on Tuesday it expected its first-half profits to fall by more than 20%, with the impact of the coronavirus outbreak already taking a substantial toll on its performance and prompting bad debts to double.

 

The bank said its headline earnings per share - the main profit measure in South Africa - would likely be at least 20% lower in the six months to June 30, versus the 920 cents it reported in the same period last year, and it would give more specific guidance at a later date.

 

 

 

Nigeria's Bonga oil export to shut for maintenance - port source

LAGOS (Reuters) - Nigeria’s Bonga crude oil export terminal will close for routine maintenance, according to a port source.

 

The source said that Bonga operator Royal Dutch Shell would shut the floating production storage and offloading unit (FPSO) for two weeks of works.

 

Shell did not immediately comment on the closure.

 

Bonga was scheduled to load four cargoes in June, or 127,000 barrels per day (bpd), up slightly from May at 123,000 bpd.

 

 

 

 

Gold eases as equities rally, Hong Kong woes limit losses

(Reuters) - Gold prices edged lower on Tuesday as hopes of economic recovery lifted share markets with many countries easing coronavirus-driven lockdowns, although Sino-U.S. tensions over Hong Kong limited bullion’s losses.

 

Spot gold was down 0.2% at $1,725.25 per ounce by 1046 GMT. U.S. gold futures fell 0.6% to $1,724.60.

 

“We are seeing U.S. stocks breaking key levels to the upside, so that is adding bit of selling pressure to gold which has otherwise been supported by the recent geopolitical worries related to Hong Kong,” said Saxo Bank analyst Ole Hansen.

 

“Right now, there is no key driver as such for gold and that basically raises the risk of a correction or renewed period of consolidation.”

 

European shares hovered near an 11-week high, while U.S. stock futures rose 2% and breached a major chart barrier as businesses worldwide gradually reopened following a months-long lockdown. [MKTS/GLOB]

 

However, offering some respite to gold were brewing trade tensions between the United States and China over a new security law to be enforced in Hong Kong.

 

White House National Security Adviser Robert O’Brien warned that the proposed legislation could lead to U.S. sanctions on Hong Kong and China, and threaten the city’s status as a financial hub. [nL1N2D604G]

 

Gold is often used as a safe store of value during times of political and financial uncertainty.

 

“On the technical side, only a clear recovery of $1,750 would open space for further rallies, while a decline below $1,725 would increase the likelihood of another test of $1,700 and potentially down to $1,671-$1,675,” ActivTrades chief analyst Carlo Alberto De Casa said in a note.

 

Market participants are waiting for the U.S. consumer confidence report due at 1400 GMT.

 

Elsewhere, palladium dropped 2% to $1,950.97 per ounce and platinum fell 0.4% to $835.31, while silver jumped 0.8% to $17.33.

 

 

 

 

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.

 

 

 

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)

 

 

 

McLaren to cut 1,200 jobs as virus hits demand

UK supercar maker and Formula 1 team McLaren plans to cut more than a quarter of its workforce after the coronavirus crisis hit sales and advertising revenue.

 

The firm employs about 4,000 people, and of the 1,200 to be made redundant, the vast majority will be in the UK.

 

Formula 1 racing has been suspended, while orders for McLaren's supercars have fallen because of the pandemic.

 

McLaren said it had been "severely affected" by the crisis.

 

The company said it had worked hard to cut costs and avoid layoffs.

 

"But we now have no other choice but to reduce the size of our workforce," McLaren chairman Paul Walsh said in a statement.

 

"This is undoubtedly a challenging time for our company, and particularly our people, but we plan to emerge as an efficient, sustainable business with a clear course for returning to growth."

 

The carmaker, which builds vehicles for racetracks and the road, operates from a facility at Woking, Surrey, that was designed by the architect Norman Foster's company. McLaren also has a composites technology centre in Sheffield.

 

McLaren's Formula 1 operation expects to lose about 70 people from its 800-strong workforce.

 

However, there will be a second phase of redundancies in 2021 once the team has taken a recent sport-wide budget cap agreement into account.

 

While the coronavirus crisis has driven the redundancies across the whole group, the cost-cap has been the biggest influence on the racing team.

 

Many other teams - especially the big ones such as Mercedes, Ferrari and Red Bull - will also have to cut head count but there may be other ways of doing it for some, such as redeployment in the wider group for the big car companies.--BBC

 

 

 

 

Aston Martin chief leaves after 94% share price collapse

Struggling luxury UK carmaker Aston Martin has announced that chief executive Andy Palmer has stepped down.

 

Tobias Moers is taking over from 1 August, with Keith Stanton filling the gap as interim chief operating officer.

 

Mr Moers joins from Mercedes' high-performance subsidiary AMG, where he is currently chief executive.

 

Aston Martin was struggling before the coronavirus crisis hit sales and its share price is down 94% since the company's flotation in 2018.

 

"The board has determined that now is the time for new leadership to deliver our plans," Aston Martin said in a statement.

 

Mr Palmer said it had been "a privilege" to serve Aston Martin for almost six years.

 

He thanked management and staff for "their hard work and support, particularly during the challenges presented by Covid-19".

 

In other management changes, the firm said three of its directors - Richard Solomons, Imelda Walsh and Tensie Whelan - had departed on Saturday. They had already indicated that they would not seek re-election in June.

 

The news was well received by the markets, with Aston Martin's share price surging more than 40% in Tuesday morning trading.

 

Neil Wilson of Markets.com described the share price rise as "a pretty damning indictment" of Mr Palmer's tenure.

 

'Significant ambition'

Aston Martin sales halved in the first three months of the year, as the start of the coronavirus crisis took hold. The company sold 578 vehicles in the first quarter, down from 1,057 in the same period last year.

 

It caused loss before tax to soar to £118.9m, up from £17.3m the year before.

 

In January this year, Aston Martin announced plans to raise emergency funding worth £500m, with a consortium led by billionaire Lawrence Stroll putting in £182m

 

Mr Stroll, who is now executive chairman of the firm, partly owns the Racing Point Formula 1 team, which will be branded Aston Martin from 2021 under the deal.

 

Mr Stroll said Mr Moers was "the right leader for Aston Martin Lagonda as we implement our strategy for the business to achieve its full potential".

 

He added: "Our ambition for the company is significant, clear and only matched by our determination to succeed."

 

Mr Moers said: "I am truly excited to be joining Aston Martin Lagonda at this point of its development. I have always had a passion for performance cars and relish the chance to work for this iconic brand."

 

Aston Martin's illustrious name has never been reflected in financial success. The 107-year-old company has gone bankrupt seven times, hence a long history of different owners and restructurings. But Andy Palmer looked at first to have found a winning formula.

 

When he joined in 2014 after 23 years with Nissan, the luxury carmaker was again close to bankruptcy. Palmer returned Aston to profitability, revamped the products, opened a factory in South Wales, and oversaw the company's stock market launch.

 

But sales slowed, partly because of Aston's own making and partly because of global economic conditions. Investments in electric and sports utility vehicles raised eyebrows among purists, and Palmer's stretching of the brand into projects including a speedboat and property in Florida was just plain odd. The company ran up huge debts.

 

The collapse in the share price - £19 in 2018, 35p last week - underlined the urgency for change. The new team at Aston Martin have indicated a back-to-basics strategy - high performance cars and racing. Investors seem to like what they are hearing. The shares soared more than 40% on news of Palmer's departure - a blunt verdict on his tenure.--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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