Major International Business Headlines Brief::: 09 September 2020

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Major International Business Headlines Brief::: 09 September 2020

 


 

 


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

 


 

 


 

 

ü  British Airways passengers 'stunned' over cash refunds stand-off

ü  Apple fires back in Fortnite App Store battle

ü  Continued tech sell-off drags Wall Street lower

ü  Uber pledges all-electric fleet by 2040

ü  US to block key exports from Xinjiang, China

ü  Brexit: The multi-billion pound state aid gamble

ü  EasyJet: Flyers frustrated at changing quarantine

ü  Thomas Cook to be revived as online travel firm

ü  Tech rout roils Asian shares, oil futures extend slump

ü  Tesla loses more than combined GM, Ford market value

ü  South African economy plunged 51% in Q2 during strict lockdown

ü  South Africa's Shoprite to quit Kenya

ü  As debt piles up, Angola flags failing state firms

ü  Nigeria's Fidelity Bank to sell up to 50 bln naira bond in Q4

ü  Angola LNG offers cargo for September to October delivery - sources

ü  Nigeria's Buhari calls electricity price rise, petrol

ü  Ethiopia to sell 5% stake of state-run telecom co to citizens -media

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 


British Airways passengers 'stunned' over cash refunds stand-off

Gordon and Margaret Minto were shocked to learn that British Airways will not return the £4,748 they paid for their flights.

British Airways passengers have told the BBC that they have been refused cash refunds for cancelled flights.

 

Gordon and Margaret Minto accepted vouchers instead after their flights to the United States were cancelled, the airline says.

 

"We were stunned... we looked at each other and said, 'we haven't asked for a voucher'. We haven't received one either", says Margaret.

 

BA said it will "always provide a refund if a customer is eligible".

 

But the Mintos from South Shields are among many holidaymakers who have found themselves in a stand-off with the airline after their flights were cancelled due to the coronavirus pandemic.

 

The airline maintains they accepted vouchers, while they all say they never wanted vouchers at all.

 

Refund rights

Under EU law, when a flight is cancelled passengers are entitled to their money back within seven days.

 

Airlines are still free to offer them the chance to rebook or to take vouchers, which can be used on different flights in future, if that is what a customer prefers.

 

The Mintos had spent £4,748 on five tickets for them and family members to fly from Newcastle via London to Dallas and Las Vegas.

 

They say they always wanted a cash refund but communicating that wish to British Airways was difficult.

 

Refund option removed

The airline used to offer an online facility where people could request money back for cancelled flights. It called it "the quickest way" to get a refund.

 

But when Covid-19 struck and thousands of flights were being cancelled, that option was removed from the company's website.

 

BA says it was because its system was not set up to deal with that volume of traffic, so passengers who wanted refunds were asked to ring the company instead.

 

The problem was many passengers then struggled to get through on the phone lines too.

 

The Mintos gave up and emailed BA asking for their money back. They got a reply saying, as far as the airline was concerned, they had accepted vouchers already and could not exchange them for cash.

 

All the more puzzling, according to Margaret, was the response they got from a BA staff member when they did manage to get through on the telephone.

 

"They said, 'I'm sorry I cannot find anything on the system which shows that you've accepted a voucher and I am going to go to a superior and ring you back in three days'. That was the last we heard from them and that was two and a half weeks ago," she says.

 

When the BBC contacted British Airways, the airline insisted Mr and Mrs Minto had filled out a voucher request form as there is "no way" in which its system would issue vouchers without one.

 

Yet other British Airways customers who were after cash refunds for cancelled flights are also claiming vouchers were automatically issued to them.

 

'Pathetic'

"I didn't complete a form asking for a voucher and, to the best of my knowledge, I didn't click anything asking for a voucher," says Terry Lloyd from Barnet in North London.

 

"In the end it seemed to me the only sensible option was to say to the customer services, 'well show me the form which you alleged I completed'. Despite repeated requests, they will not send it to me. I can only assume it's because it doesn't exist. I'm totally disenchanted with them. It is a pathetic piece of obfuscation on their part."

 

Other customers say they filled out voucher application forms by mistake after logging into their accounts looking for ways to get their money back.

 

David Hunter accepts that he made a mistake but feels that he was "misled" by British Airways' website.

At one stage the BA website displayed two buttons, one labelled "change booking" and the other labelled "cancel booking" with a message underneath which said: "There's no extra cost for any changes and we offer a refund if you cancel your booking".

 

People who clicked "cancel booking" hoping for a refund were actually taken to an application form for vouchers.

 

It had "Future Travel Voucher Application Form" written in large letters at the top and a box to tick at the bottom acknowledging acceptance of vouchers, but several people seem to have missed that.

 

David Hunter from Sutton in Surrey says he got "suckered in" by the previous page which promised a refund and filled out the form thinking that was what he was getting. He only realised his error after pressing submit and, within the hour, managed to get through to British Airways on the telephone.

 

"British Airways said 'no, that's it, that is what you selected that's what you're getting," he says, meaning he's stuck with a voucher for his £768 return flights to Seychelles.

 

David Travers, a barrister specialising in trading standards and consumer protection law, believes the fact that a number of people have been misled does "rather suggest" that the British Airways website was misleading.

 

"There is something unattractive, people might think, about a large commercial concern playing 'gotcha' with a customer - if you read that more carefully you would have realised what we were doing.

 

"That is something the courts and the legislation have taken some trouble to treat with a degree of caution because of the inequality of the position between the consumer and the business," he says.

 

'Clearly worded'

BA says the voucher process is clearly worded but has failed to explain why part of its website appeared to offer a refund but took people to a voucher application form instead.

 

The regulator, the Civil Aviation Authority, says if consumers feel misled then they should open a complaint about their experience, first with the airline and then, if they are not satisfied with the response, they can seek redress via the approved alternative dispute resolution service, which in the case of British Airways is the Centre for Effective Dispute Resolution (CEDR).

 

"We will always provide a refund if a customer is eligible and we're offering flexibility if any of our customers need to change their flights," British Airways said in a statement.

 

"Since March we have provided more than 1.67 million customers with cash refunds and more than 1.3 million with vouchers to fly with us that they can use right up until April 2022".--bbc

 

 

 

Apple fires back in Fortnite App Store battle

Apple has fired back against claims by the maker of the Fortnite game that its control of the App Store gives it a monopoly.

 

In a response to the August lawsuit filed by Epic Games, Apple called those arguments "self-righteous" and "self-interested".

 

It denied that its 30% commission was anti-competitive and said the fight was "a basic disagreement over money".

 

Apple also said Epic Games had violated its contract and asked for damages.

 

The filing is the latest in a legal battle that started last month, after Fortnite offered a discount on its virtual currency for purchases made outside of the app, from which Apple receives a 30% cut.

 

In response, Apple blocked Epic's ability to distribute updates or new apps through the App Store, and Epic sued, alleging that Apple's App Store practices violate antitrust laws.

 

The court allowed Apple's ban on updates to continue as the case plays out, but the existing version of Fortnite still works, as does Epic's payment system.

 

Antitrust concerns

Apple had said it would allow Fortnite back into the store if Epic removed the direct payment feature to comply with its developer agreement.

 

But Epic has refused, saying complying with Apple's request would be "to collude with Apple to maintain their monopoly over in-app payments on iOS."

 

Microsoft backs Epic in Apple row

Apple faces two EU anti-competition probes

In its filing, Apple said Epic has benefited from Apple's promotion and developer tools, earning more than $600m (£462m) through the App Store.

 

Apple accused the firm, which it noted is backed by Chinese tech giant Tencent, of seeking a special deal before ultimately breaching its contract with the update.

 

"Although Epic portrays itself as a modern corporate Robin Hood, in reality it is a multi-billion dollar enterprise that simply wants to pay nothing for the tremendous value it derives from the App Store," it said in the filing.

 

The legal battle between the two companies comes as Apple faces increased scrutiny of its practices running the App Store.

 

At a hearing in Washington over the summer, politicians also raised concerns that Apple's control of the app store hurt competition.

 

The European Union is also investigating whether Apple's App Store practices violate competition rules.

 

Apple has denied those claims, arguing that its App Store has made it easier and cheaper for developers to distribute products.-bbc

 

 

 

 

Continued tech sell-off drags Wall Street lower

A sell-off in shares of US technology firms has continued for a third day, dragging down all three major American stock indexes more than 2%.

 

Apple was the biggest loser on the Dow, falling more than 6.7%. Amazon and Facebook also dropped at least 4%.

 

The sharp downturn follows the huge gains earlier in 2020 which had helped US markets rebound from the pandemic.

 

Asia followed Wall Street's lead on Wednesday with its main indexes in the red.

 

The biggest faller in the region was Australia's ASX 200 index which fell 2.6% while China's Shanghai Composite dropped 2%.

 

These dips come as the global economy is expected to shrink by roughly 5% this year. Concerns about coronavirus continue to weigh on business activity and add to trade tensions.

 

 

Sterling fall

In the UK on Tuesday, the pound fell against major currencies after the government renewed the prospect of a no-deal Brexit, saying the UK would "prosper mightily" with or without a deal.

 

The pound dropped 1.6% to just over $1.30. It fell a similar amount against the euro, to €1.10.

 

The FTSE 100 also turned negative, but climbed back from its steepest losses to end the day down 0.12%.

 

Civil service: Government's top lawyer to stand down

Northern Ireland Secretary admits new bill will 'break international law'

In the US, the Dow Jones Industrial Average closed 2.25% lower, while the S&P 500 fell 2.78%. The tech-heavy Nasdaq dropped 2.95%.

 

Many investors had been rattled by the recent run-up in share prices, even as many economic forecasts remained downbeat and tensions between the US and China - particularly related to technology - remain high.

 

Even after recent losses, share prices of many big tech companies remain significantly higher than the start of the year.

 

Tesla shares, for example, tumbled roughly 20% on Tuesday to about $330 each, amid disappointment that the electric car-maker had not been added to the S&P 500 index as part of its recent reshuffle. But the firm's shares have more than tripled since the start of the year.

 

Analysts have said some investors are selling to lock in gains ahead of what is expected to be bumpy trading over the next few months.-bbc

 

 

 

Uber pledges all-electric fleet by 2040

Uber has said that all taxis available through its app will be electric by 2040 - and by 2030 in US, Canadian and European cities.

 

The ride-hailing firm said the move was part of its "responsibility" to tackle the challenge of climate change.

 

The company said that it would spend $800m (£614m) to help drivers switch to electric cars, creating partnerships with manufacturers to ensure discounts.

 

Users will also be able to request an electric or hybrid vehicle.

 

That option is available in 15 US and Canadian cities for an extra $1, Uber said. It said it would launch in more than 65 cities globally by the end of the year.

 

"It's our responsibility as the largest mobility platform in the world to more aggressively tackle the challenge of climate change," chief executive Dara Khosrowshahi said in a blog post on Tuesday.

 

"While we're not the first to set ambitious goals in transitioning to [electric vehicles], we intend to be the first to make it happen."

 

Climate change contributors

Uber and smaller rival Lyft have faced ongoing criticism for their role contributing to traffic and air pollution, with research showing many of their rides replace less polluting alternatives, like walking, biking, or taking public transport.

 

Lyft in June pledged to have an all electric fleet by 2030, but it did not outline support for drivers. Many of them operate their own cars.

 

Uber on Tuesday said that battery electric vehicles accounted for roughly 0.15% of the miles logged on its platform in the US and Canada between 2017 and 2019. Including hybrids, the mileage logged in green vehicles is about five times the average in the United States.

 

In London, where it has clashed with regulators, Uber had already pledged that all the firm's rides would happen in electric cars by 2025.

 

On Tuesday, Uber said it was working with Renault and Nissan to expand that effort to other European cities, starting in France. In the US and Canada, it is working with General Motors.

 

Uber said drivers will earn more per ride if they are using electric or hybrid cars and it was also working to include more alternatives to cars in its app.

 

Climate change organisations, which have pressed the company to improve its environmental record, said they were pleased by Uber's announcement.

 

"Uber's commitment to rapidly electrify its fleet in major European cities is good news," said William Todts, executive director of the campaign group Transport & Environment.

 

"Now it's time for Europe's city mayors to show leadership. We need all big cities in Europe to introduce zero-emission zones, new pop-up bike lanes and cycle-only corridors, while also providing easy access to charging at home, at work and wherever people park."--bbc

 

 

 

US to block key exports from Xinjiang, China

The US is to block key exports from China's Xinjiang region due to allegations that they are produced using forced labour.

 

The proposed bans include cotton and tomato products which are two of China's major commodity exports.

 

The Trump administration has been ratcheting up pressure on China for its treatment of Xinjiang's Uighur Muslims.

 

In recent years China has massively increased security in Xinjiang, citing a threat of separatism and terrorism.

 

By some estimates up to a million people have been detained without trial for minor infractions, in what China says are re-education camps.

 

The US Customs and Border Protection (CBP) is currently preparing Withhold Release Orders which allows it to detain shipments based on suspicions of forced labour involvement.

 

The law is aimed at combating human trafficking, child labour and other human rights abuses.

 

Earlier this year US lawmakers proposed legislation that would assume that all goods produced in Xinjiang were made with forced labour and would require certification that they are not.

 

Washington and Beijing have repeatedly clashed over the high-security detention camps, which China says are necessary to improve security.

 

"We have reasonable but not conclusive evidence that there is a risk of forced labour in supply chains related to cotton textiles and tomatoes coming out of Xinjiang," CBP Executive Assistant Commissioner Brenda Smith told Reuters in an interview.

 

"We will continue to work our investigations to fill in those gaps," she added.

 

The proposed bans could have a far-reaching impact for US retailers, clothes makers and food producers.

 

China produces about 20% of the world's cotton with most of it coming from Xinjiang. The region is also a major source of petrochemicals and other goods that feed into Chinese factories.

 

This week, US entertainment giant Disney came under fire for shooting its new film Mulan in the Xinjiang province.

 

The film was already the target of a boycott after its lead actress backed a crackdown on Hong Kong protesters.--bbc

 

 

 

Brexit: The multi-billion pound state aid gamble

Why is the UK seemingly prepared to sacrifice a trade deal with the EU on the altar of state aid?

 

The UK government spends half as much - 0.38% of GDP - on supporting businesses as France, at 0.76% and roughly a quarter as much as Germany's 1.51%.

 

Given successive Conservative governments have been instinctively reluctant to intervene in the private sector, preferring to let free-market capitalism take its course, why now is it determined to secure a right to do something it almost never does?

 

One former Remain-voting cabinet minister told the BBC: "There is no point going through the pain and disruption of Brexit if you are not able to spend money on what you want afterwards. I understand why they are taking this line."

 

So what does the government want to spend money on? Surely it can't be to prop up struggling primary industries like steel so we can dump cheap subsidised commodities on EU markets - the traditional feared outcome of anti-competitive state intervention.

 

Rohan Silva, a former adviser to David Cameron and entrepreneur, says it's in new industries, not old, that state aid is really powerful.

 

In 2010, he says, the Conservative government was keen to foster investment in the companies of the future by offering generous government incentives, but found itself constrained by EU state aid rules.

 

"We couldn't support companies as they grew as much as we wanted for as long as we wanted. If you are going to leave the EU, you should make the most of it," he says.

 

To some ears, this sounds suspiciously like politicians picking winners, something Conservative governments are historically suspicious of.

 

Another former minister, David Gauke, told the Today programme: "When I was at the Treasury, most of us questioned the value for money you get when you allow politicians an enormous amount of discretion on which companies and sectors to support.

 

"There is plenty you can do to create the right environment for investment without going down that route."

 

Home-grown technology

As Prof Dieter Helm has said in the past: "Governments aren't good at picking winners, but losers are good at picking governments."

 

However, the evidence from the US and China is compelling. The US is hardly a stranger to free-market capitalism, but the government is not shy about giving emerging technologies a leg up.

 

The Defense Advanced Research Projects Agency (Darpa) is a research and development agency of the US Department of Defense credited with inventing the mouse, GPS and, er, the internet.

 

The Small Business Administration's stated aim is "to maintain and strengthen the nation's economy by enabling the establishment and viability of small businesses". It has an office in every state and spends nearly $1bn a year backing small firms.

 

EU state aid rules do not allow you to give money to save failing companies - this is defined as companies that made recurrent losses in recent years.

 

Almost every single start-up in the world makes losses in the early years: it took Amazon over a decade to make a profit. Free of the EU's shackles, the UK government could foster home-grown technology giants.

 

That's the plan, according to those close to Dominic Cummings. But is it worth scuppering a trade deal with the UK's closest and biggest trading partner?

 

As Prof Brian Cox tweeted this morning: "The UK can't grow a tech company to rival Apple and Google through state aid, surely? Apple is worth as much as the entire FTSE 100. Are we really going to gamble away our (excellent) existing industries because Dom has a crazy dream?"

 

Or as former MP David Gauke told the BBC's Today programme: "It's an extraordinary punt: giving up good access to the European market in the hope that we have ministers and officials who are really good at identifying new tech opportunities."

 

Given that the government's own analysis estimates that a no-deal Brexit will mean the UK economy will be up to 9% smaller in 15 years than it would have been otherwise, it's a gamble with hundreds of billions at stake.--bbc

 

 

 

 

EasyJet: Flyers frustrated at changing quarantine

EasyJet says it is expecting to fly fewer passengers because consumer confidence has been hit by UK coronavirus quarantine measures.

 

The airline expanded its schedule to 40% of its normal capacity last month, but now says it expects that to fall.

 

"Customer confidence to make travel plans has been negatively affected" by "constantly evolving government restrictions", EasyJet said.

 

"We know our customers are as frustrated as we are," it added.

 

On Monday, the government added seven Greek islands to the quarantine list which means people return to England from these locations will have to isolate for 14 days.

 

Johan Lundgren, the boss of EasyJet, told the BBC on Monday that the latest change to the quarantine rules - which means islands can be treated differently from their mainland countries if infection rates differ - was "too little, too late", as the peak of the summer holiday season had passed.

 

"This is something we have argued for a long time - it should not have been a blanket instrument when it comes to quarantine. It should be based on risk and on a much more targeted approach," he said.

 

In the airline's latest statement, Mr Lundgren said: "Following the imposition of additional quarantine restrictions to seven Greek islands and the continued uncertainty this brings for customers, demand is now likely to be further impacted and therefore lower than previously anticipated,"

 

"We now expect to fly slightly less than 40% of our planned schedule over the current quarter."

 

The airline said this would be achieved by "continued schedule thinning as we continue to focus on profitable flying".

 

Media captionHow do I quarantine after returning from a holiday abroad?

Quarantine 'unpredictable'

EasyJet, like other airlines, has been hit hard by lockdowns and travel restrictions around the world, with many announcing job cuts.

 

It has previously said it will cut up to 30% of its workforce - about 4,500 jobs - as it struggles with the effects of the pandemic.

 

EasyJet said that in view of "the continued level of uncertainty", it would not be maintaining any forward-looking financial guidance for this financial year or the next.

 

"We know our customers are as frustrated as we are with the unpredictable travel and quarantine restrictions," said Mr Lundgren.

 

"We called on the government to opt for a targeted, regionalised and more predictable and structured system of quarantine many weeks ago so customers could make travel plans with confidence."

 

He added that it was difficult to overstate the impact that "the pandemic and associated government policies" had had on the whole industry.

 

Mr Lundgren called on the government to provide "sector-specific support for aviation", with a package of measures including the removal of Air Passenger Duty for at least 12 months.--bbc

 

 

 

Thomas Cook to be revived as online travel firm

The Thomas Cook travel brand is close to being re-launched following the company's spectacular collapse last year that cost thousands of jobs.

 

However, the new firm will be online-only without the aircraft, hotels and shops of the old business.

 

The brand's owner, China's Fosun, wants to revive Britain's oldest travel firm within weeks to capture the start of the booking season for next summer.

 

But exact timing depends on when Thomas Cooks gets a licence to operate.

 

The 179-year-old company collapsed under a mountain of debt, and sparked the largest ever peacetime repatriation to bring home 150,000 UK holidaymakers from abroad.

 

Fosun was already a large shareholder in the business, and last November paid £11m for the Thomas Cook trademarks, websites, social media accounts.

 

A very limited Thomas Cook website is already operating, although it is not selling holidays.

 

The firm needs an Atol licence from the regulator, the Civil Aviation Authority. There are reports this could be granted within days.

 

Fosun, which owns the Club Med holiday resorts, declined to comment.

 

A source said Thomas Cook was "very keen to be up and running by Christmas. It's when people's thoughts turn to summer holidays, and there is likely to be a lot of pent up demand because of this year's coronavirus cancellations."

 

The timing of Thomas Cook's re-launch will also depend on any further restrictions and quarantine rules on foreign travel because of the coronavirus pandemic.

 

Spain had been Thomas Cook's most popular destination.

 

The travel and tourism industry has been hit hard by a coronavirus collapse in trade. Britain's Hays Travel, which bought the bulk of Thomas Cook's High Street outlets and took on many ex-staff, is cutting almost 900 jobs.

 

And Tui, Thomas Cook's biggest rival before the collapse, received €1.2bn (£1bn) in aid from the German government.--bbc

 

 

 

Tech rout roils Asian shares, oil futures extend slump

TOKYO/NEW YORK (Reuters) - Asian shares fell on Wednesday and oil prices hit lows not seen since June after a rout of technology shares sank Wall Street for a third consecutive day and a major drugmaker delayed testing of a coronavirus vaccine.

 

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS slid 1.12%. Australian stocks dropped 2.24%, while shares in China .CSI300 fell 1.16%.

 

Japan's Nikkei .N225 skidded by 1.69%.

 

U.S. S&P 500 E-mini stock futures ESc1 fell 0.01%, but Nasdaq futures NQc1 rose 0.72%.

 

Sentiment for equities and other risky assets also took a hit after AstraZeneca Plc (AZN.L) paused a late-stage trial of one of the leading COVID-19 vaccine candidates due to an unexplained illness in a study participant.

 

Treasury yields fell further in Asia as investors sought the safety of holding government debt. Risk aversion also pushed the yen to a one-week high against the dollar.

 

A sell-off in high-flying U.S. technology shares, fueled partly by concerns about excess purchases of call options, has increased the risk of a larger correction across other markets.

 

“The performance of Wall Street is going to leave a heavy residue, and most noteworthy is how the tech names dropped down quite aggressively. Investors will take a close note of that,” said Tom Piotrowski, a markets analyst at Australian broker CommSec.

 

“The dramatic fall in oil prices in the last day is being seen as a proxy for global growth expectations. That 7.6% fall will certainly be resonating.”

 

The Dow Jones Industrial Average .DJI fell 2.25%, the S&P 500 .SPX lost 2.78%, and the Nasdaq Composite .IXIC dropped 4.11% on Wall Street on Wednesday.

 

Among U.S. technology names, electric-car maker Tesla (TSLA.O) plunged 21.06% on Tuesday, its biggest daily percentage drop, after it was excluded from a group of companies being added to the S&P 500.

 

SoftBank Group Corp (9984.T) shares fell 5% on Wednesday due to worries about the Japanese conglomerate’s trading in call options on U.S. tech stocks.

 

SoftBank has fallen 12% since sources told Reuters and other media late last week that it built up stakes in major U.S. tech companies worth around $4 billion and bought a similar amount of call options for the underlying shares.

 

Counterparties who sold the call options to SoftBank would have to hedge their exposure by buying the underlying shares, which likely contributed to the Nasdaq .IXIC and S&P 500 .SPX reaching record highs only days ago, some traders say.

 

U.S. 10-year Treasury yields US10YT=RR fell to 0.6722%, while the yield curve between two-year and 10-year notes US2US10=TWEB flattened slightly, highlighting declining appetite for risk.

 

The British pound GBP=D3 fell to six-week lows against both the dollar and the euro.

 

Escalating concerns over Britain leaving the European Union without a trade agreement are weighing on sterling.

 

The dollar index =USD against a basket of six major currencies stood near a four-week high as Wall Street’s sell-off and renewed fears about Brexit boosted safe-harbour demand for the greenback.

 

Oil futures extended their sharp decline in Asian trading to the lowest levels since June due to concern about weak global energy demand and excess supply.

 

Brent LCOc1 fell 0.53% to $39.57 a barrel, while U.S. crude CLc1 lost 0.68% to trade at $36.51 per barrel.

 

 

 

Tesla loses more than combined GM, Ford market value

(Reuters) - Tesla Inc shed about $80 billion of its market value on Tuesday, an amount that overshadows the combined value of General Motors Co and Ford Motor Co, after its surprise exclusion from the S&P 500 index.

 

Tesla’s shares recorded their worst single-day percentage drop ever and added to the broader sell-off in technology stocks, which have dominated Wall Street’s recovery from the coronavirus-driven crash earlier this year.

 

The stock closed 21.06% lower, while fellow electric automaker Nikola Corp jumped more than 40% after General Motors said it was acquiring an 11% stake in the company.

 

Wall Street analysts and investors widely expected Tesla to join the S&P 500 after the company posted its fourth consecutive profitable quarter in July, clearing a major hurdle for its potential inclusion in the benchmark stock index.

 

In a surprise announcement, the S&P Dow Jones Indices decided to add online craft seller Etsy Inc, semiconductor equipment maker Teradyne Inc and pharmaceutical technology company Catalent Inc to the S&P 500 instead.

 

“On the one hand, the slide in the share price is due to its non-inclusion in the S&P 500, but on the other hand the slide is also a normalization of the company’s valuation,” Frank Schwope, an analyst at NORD/LB, said.

 

Tesla’s inclusion in the S&P 500 index would have required a lot of funds to buy its shares. Credit Suisse analyst Dan Levy said the exclusion likely reflects the challenges in adding a company of Tesla’s size to the index.

 

Bets against Tesla’s stock have also increased slightly over the last month, according to financial analytics firm S3 Partners.

 

On Tuesday morning, short interest in Tesla was $25.03 billion, with about 8.10% of its outstanding shares shorted.

 

Tesla’s recent stock rally has been driven by its blockbuster quarterly results and on bets it would be added to the S&P 500, which would trigger massive demand for its shares from index funds that track the benchmark.

 

 

 

South African economy plunged 51% in Q2 during strict lockdown

PRETORIA (Reuters) - South Africa’s economic output shrank 51.0% in the second quarter, its fourth quarterly contraction in a row and largest on record, as a strict lockdown to curb the spread of the coronavirus shut down most activity, data showed on Tuesday.

 

 

Africa’s most industrialised nation has been hit hard by the COVID-19 pandemic, recording the seventh-largest number of cases worldwide, although it has seen fewer deaths than some other badly affected countries.

 

Analysts polled by Reuters had predicted a 47.3% contraction because of the lockdown restrictions, which were among the harshest in the world.

 

“This is the first time in history that the South African economy has contracted for four straight quarters,” Statistician-General Risenga Maluleke told a news conference.

 

The rand fell roughly 1% against the dollar on the dismal data to trade at 16.9325 per dollar.

 

Joe de Beer, another top official at Statistics South Africa, said that after adjusting for inflation the economy was roughly the same size in the April-June quarter as in the first quarter of 2007.

 

Most sectors declined steeply except for agriculture, which grew 15.1% in the second quarter from January-March, helped by fruit and nut exports, and better-than-average winter rainfall.

 

Mining declined 73.1%, manufacturing 74.9% and construction 76.6%. Gross domestic product (GDP) for the whole economy shrank 17.1% from the same period in 2019.

 

TOUGH TIMES

Jeff Schultz, economist at BNP Paribas, said the global impact of the pandemic coupled with the recent return of power cuts by ailing state utility Eskom would hamper any economic recovery.

 

“It will take a very long time to get to pre-pandemic levels,” he said.

 

The government expects a GDP decline of at least 7% in 2020, a worrying prediction in a country where unemployment was at around 30% before COVID-19.

 

Pamela Mutandwa, 37, who runs a roadside vegetable stand in Pretoria, said times were hard. “It was really difficult during lockdown. There were no people buying and I struggled. When I opened in 2009 there were more customers.”

 

Tlouama Abrama, 31, a petrol attendant, said he was disappointed by the government’s economic policies. “They should be doing more to revive the factories around here so people can get jobs. Their policies are not working.”

 

The finance ministry did not immediately respond to a request for comment.

 

 

 

 

South Africa's Shoprite to quit Kenya

JOHANNESBURG (Reuters) - South Africa’s Shoprite Holdings plans to sell or close its remaining two stores in Kenya by the end of December, leaving the East African country two years after entering it.

 

The supermarket group has been reviewing its long-term options in Africa as currency devaluations, supply problems and weak consumer spending in Angola, Nigeria and Zambia have weighed on earnings.

 

“Kenya has continued to underperform relative to our return requirements,” the company said on Tuesday as it posted a 16.6% rise in annual group earnings, adding its decision to leave had been cemented by the economic impact of the COVID-19 pandemic.

 

Shoprite shares jumped more than 11% to a five-month high as investors cheered the group earnings, post-lockdown outlook and dividend.

 

The decision to leave Kenya comes a month after Shoprite said it was considering selling its stake in its Nigerian subsidiary.

 

As part of the ongoing Africa review, the firm has renegotiated 48 rental agreements by either reducing rent payments or converting them to local currency, Chief Executive Pieter Engelbrecht told analysts.

 

The firm has also restricted capital allocations to its supermarkets outside South Africa.

 

Shoprite, with more than 2,300 stores across Africa, reported record sales of 156.9 billion rand, up 6.4% for the year ended June 28, with like-for-like sales up 4.4% as customers spent more at its discount Usave and mid-to-upper market Checkers stores.

 

Sales at its loss-making rest of Africa operations declined 1.4% as “complexity in managing COVID-19 regulations across multiple territories negatively impacted the second half,” it said.

 

Diluted headline earnings per share (HEPS) from continuing operations climbed to 765.8 cents against a restated 746.9 cents a year earlier, while adjusted diluted HEPS rose 16.6%.

 

Shoprite declared a final dividend of 227 cents per share and said it had traded ahead of expectations since the beginning of July.

 

($1 = 16.8841 rand)

 

 

 

As debt piles up, Angola flags failing state firms

LONDON (Reuters) - Angola’s state auditor said some government-owned companies were a net drain on the finances of sub-Saharan Africa’s third-biggest economy while oil giant Sonangol failed to report its results, state news agency Angop reported late Monday.

 

The bleak report card comes after Fitch Ratings downgraded Angola’s credit rating to CCC from B-, citing the increasing unsustainability of its debt burden after a fall in oil prices.

 

Cars are seen infront of the head office of Angola's state oil company Sonangol in the capital Luanda, Angola.

 

Seeking to defy a decades-old legacy of corruption and mismanagement, the oil- and mineral-rich country has launched a drive to privatise key assets, including Sonangol, to drum up foreign investment.

 

But 26 of the 86 firms examined by the Institute for the Management of Assets and State Participations (IGAPE) were marked as having “failed” the auditor’s health test for the 2019 financial year, even before the coronavirus pandemic.

 

“The return obtained demonstrates the corrosion of the state’s assets at the company level, resulting from successive negative results of a significant group of companies,” IGAPE said in a statement carried by Angop.

 

The companies ranged from state diamond company Sodiam to banks, railway concerns, insurance firms and the state news agency itself.

 

“The amount actually transferred to the state coffers remains below the contributions that the state makes through subsidies,” IGAPE added.

 

Relying heavily on oil revenues and saddled with debts that exceed its economic output, Angola has been reeling from the fallout of the pandemic and a slump in crude prices.

 

G20 members including China and the Paris Club in April offered a freeze on debt service payments to some of the poorest countries, including Angola, until year-end.

 

Sonangol -- by far the biggest state company, which Angola’s own oil minister has called an “octopus” which needs to be divided up and partly sold -- and state airline TAAG did not offer any results, IGAPE said.

 

Sonangol said in February it had a net debt of $1.3 billion at end-2019, down over half from the year before, and financial liabilities of just over $5 billion.

 

Angola aims to IPO 30% of Sonangol before 2020 and is already seeking to sell off small arms of the firm. It did not immediately respond to a Reuters request for comment.

 

 

 

Nigeria's Fidelity Bank to sell up to 50 bln naira bond in Q4

ABUJA (Reuters) - Nigeria’s Fidelity Bank plans to issue up to 50 billion naira ($131.3 million) in local bonds by the fourth quarter to refinance existing debt as yields fall, a senior executive said on Tuesday.

 

Bond yields have declined on the local debt market after an oil price crash triggered by the novel coronavirus pandemic caused foreign investors to dump naira assets, leaving money markets awash with liquidity.

 

The new issue will be made to redeem an existing 30 billion naira bond issued at 16.48%, Chief Operations and Information Officer Gbolahan Joshua told an analyst call.

 

Debt market yields have dropped from a high of 18% three years ago. Yields on the one-year treasury bill are quoted under 5%.

 

The mid-tier lender has said it expects to see a 15% drop in profit this year compared with 2019, citing the impact of the coronavirus pandemic.

 

It said profit before tax had increased by 21.9% to 12 billion naira in the half year. Fidelity said income declined in the second quarter due to a downward review of lending rates on loans backed by development finance institutions and an economic slowdown.

 

Nigeria’s growth contracted in the second quarter with fears that the economy could be heading into a recession in the next quarter.

 

($1 = 380.70 naira)

 

 

Angola LNG offers cargo for September to October delivery - sources

SINGAPORE (Reuters) - Angola’s liquefied natural gas (LNG) project has offered a cargo for delivery for September to October, two industry sources said on Tuesday.

 

The cargo is offered on a delivered ex-ship (DES) basis from the vessel “Sonangol Etosha”, with the furthest destination to Singapore and Thailand, they said.

 

The tender closes on Sept. 10.

 

 

 

Nigeria's Buhari calls electricity price rise, petrol

ABUJA (Reuters) - Nigeria’s increase in electricity prices and the deregulation of petroleum sector were crucial decisions taken at the start of year, a statement by President Muhammadu Buhari said on Monday.

 

Multilateral lenders have for years urged Nigeria to remove costly fuel subsidies, change electricity tariffs which have held prices artificially low and end the country’s multiple exchange rate system. Last month sources said a much-needed $1.5 billion World Bank loan was held up due to concerns over such reforms.

 

The government in March announced a new pricing mechanism that it said would maintain its control, but allow prices to move with the market and eliminate subsidies. 

 

A statement issued by the presidency said the increase in electricity prices and deregulation of the petroleum sector were “crucial decisions that were taken at the beginning of the year”.

 

“There is no provision for fuel subsidy in the revised 2020 budget, simply because we are not able to afford it, if reasonable provisions must be made for health, education and other social services. We now simply have no choice,” Buhari was quoted as saying in the statement.

 

Cheap fuel prices are seen by many in Nigeria as a benefit of living in an oil-rich country. An attempt by erstwhile President Goodluck Jonathan to eliminate subsidies was scuppered after riots ensued.

 

Africa’s largest oil producer had been spending 1 trillion naira ($2.63 billion) a year subsidising petrol prices but the global oil price crash made removing subsidies “inevitable”, the oil minister said last week, adding that the country was no longer fixing fuel prices.

 

 

 

Ethiopia to sell 5% stake of state-run telecom co to citizens -media

ADDIS ABABA (Reuters) - Ethiopia plans to sell a 5% stake in its state-run telecom firm to its citizens as part of measures to break up the monopoly, state-affiliated Fana Broadcasting said on Monday, quoting Prime Minister Abiy Ahmed.

 

The sale of the stakes is part of Ethiopia’s plans to open up one of the world’s last closed telecoms markets in the nation of around 110 million people.

 

Fana said the government will retain a 55% stake in Ethio Telecom, with the remainder going to international companies.

 

In June, the telecoms regulator said it had received 12 bids for the two telecom licences the government plans to award to multinational companies.

 

The regulator has not given a deadline for when it will award the licences.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 


 


Invest Wisely!

Bulls n Bears 

 

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INVESTORS DIARY 2020

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


Companies under Cautionary

 

 

 


 

 

 

 


Bindura Nickel Corporation

 

 

 


Padenga Holdings

 

 

 


Delta Corporation

 

 

 


Meikles Limited

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 


DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of Faith Capital (Pvt) Ltd for general information purposes only and does not constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities. The information contained in this report has been compiled from sources believed to be reliable, but no representation or warranty is made or guarantee given as to its accuracy or completeness. All opinions expressed and recommendations made are subject to change without notice. Securities or financial instruments mentioned herein may not be suitable for all investors. Securities of emerging and mid-size growth companies typically involve a higher degree of risk and more volatility than the securities of more established companies. Neither Faith Capital nor any other member of Bulls ‘n Bears nor any other person, accepts any liability whatsoever for any loss howsoever arising from any use of this report or its contents or otherwise arising in connection therewith. Recipients of this report shall be solely responsible for making their own independent investigation into the business, financial condition and future prospects of any companies referred to in this report. Other  Indices quoted herein are for guideline purposes only and sourced from third parties.

 


 

 


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