Major International Business Headlines Brief::: 14 September 2020

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Major International Business Headlines Brief::: 14 September 2020

 


 

 


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

 


 

 


 

 

ü  South African economy to shrink by more than government's 7% forecast in
2020 -Mboweni

ü  Uganda, Tanzania sign agreement for construction of crude oil pipeline

ü  Uganda, Total reach agreement bringing crude pipeline construction closer

ü  Congo says it will reimburse VAT to mining companies after audit

ü  S.Africa's central bank to pause cutting on Sept.17, trim in Nov

ü  Kenyan economy to grow at under 2.5% this year -finance minister

ü  S.African bank profits seen taking years to recover from COVID-19 hit

ü  Risk appetite aids South Africa's rand recovery, stocks up

ü  Nigerian President Buhari directs central bank to stop issuing foreign
exchange for food imports

ü  Sudan declares state of economic emergency due to fall of currency

ü  TikTok rejects Microsoft bid at eleventh hour

ü  ARM: UK-based chip designer sold to US firm Nvidia

ü  Unemployment: Planned redundancies twice the rate of last recession

ü  YouTube faces legal battle over British children's privacy

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 


South African economy to shrink by more than government's 7% forecast in
2020 -Mboweni

JOHANNESBURG (Reuters) - South Africa’s economy will likely contract this
year by more than the 7% previously forecast by the Treasury, Finance
Minister Tito Mboweni said in an opinion piece published on Sunday.

 

Gross domestic product shrunk by a record 51% in the second quarter, its
fourth quarterly contraction in a row, as a strict lockdown to curb the
spread of the coronavirus saw activity grind to a near-standstill.

 

“The contraction in growth is larger than anticipated by the National
Treasury and the SA Reserve Bank, which raises the risk that the actual GDP
outcome for this year could be lower than previously thought by both
policymakers and the broader market,” Mboweni wrote in the piece published
in the City Press weekly newspaper.

 

In July the Reserve Bank cut its 2020 forecast for GDP to a 7.3%
contraction. In its emergency budget in June, the Treasury pencilled in a 7%
decline, but some analysts see a double-digit contraction.

 

In his article Mboweni, brought back to cabinet by President Cyril Ramaphosa
in 2018 after more than a decade in the private sector, said his office
would speed up reforms, by easing regulatory hurdles and allowing more
private investment in the public sector, especially in electricity.

 

State utility Eskom, which provides around 90% of the country’s power, has
struggled for years to meet demand, unleashing nationwide blackouts to keep
the grid from collapsing.

 

With debt of around 500 billion rand ($30 billion) and heavily reliant on
bailouts from government, Eskom has regularly been cited as the main threat
to the economy and fiscal stability.

 

The government has long been criticised for its slowness in dealing with
Eskom. In the article, Mboweni said the government would move with greater
speed via “Operation Vulindlela” (open the way), a joint initiative between
the Treasury and the presidency announced in his budget speech in June and
aimed at accelerating structural reform. He did not give details of the
plan.

 

“It is not another new plan. It involves implementing existing commitments
through mechanisms to escalate challenges and fast-track implementation,”
Mboweni wrote.

 

($1 = 16.7350 rand)

 

 

 

Uganda, Tanzania sign agreement for construction of crude oil pipeline

NAIROBI (Reuters) - Tanzania and Uganda signed an agreement on Sunday paving
the way for the construction of a crude oil pipeline running from Ugandan
oilfields to the Tanzanian port of Tanga, a Tanzanian government spokesman
said.

 

Uganda discovered oil reserves in 2006 and needs the planned 1,445-km
(900-mile) East African Crude Oil Pipeline to be in place to start
commercial production. The pipeline is estimated to cost $3.5 billion,
according to the two governments.

 

Hassan Abassi, Tanzania government spokesman, said on Twitter that 80% of
the pipeline will run through Tanzania.

 

Tanzania will earn 7.5 trillion shillings ($3.24 billion) and create more
than 18,000 jobs over the next 25 years, or more, that the project is in
place, Abassi said after the signing ceremony attended by Tanzania’s
President John Magufuli and Ugandan President Yoweri Museveni in Chato,
northwestern Tanzania.

 

Uganda has not given a date for when construction of the pipeline will begin
but said last year that once construction begins, it would take 2-1/2 to
three years to complete.

 

The agreement on the pipeline construction comes days after French oil
company Total said it had reached an agreement with Uganda protecting its
rights and obligations in the pipeline’s construction and operation - known
as the host government agreement.

 

Total is the major shareholder in Uganda’s oilfields after agreeing in April
to buy Tullow Oil’s entire stake in the jointly held onshore fields in
Uganda for $575 million.

 

Tullow said last week it was confident of finalising the sale in the fourth
quarter of this year.

 

The other partner in the 230,000 barrel-per-day project is China’s CNOOC.

 

($1 = 2,315.0000 Tanzanian shillings)

 

 

 

Uganda, Total reach agreement bringing crude pipeline construction closer

KAMPALA (Reuters) - Uganda and France’s Total have reached an agreement that
will bring the oil firm and its partners closer to starting construction of
a crude pipeline to neighbouring Tanzania, the company’s local unit said on
Friday.

 

Uganda discovered crude oil reserves about 14 years ago but commercial
production has been delayed partly because of a lack of infrastructure, such
as an export pipeline.

 

The 1,445-km (900-mile) East African Crude Oil Pipeline, costing $3.5
billion, would pass through neighbouring Tanzania to the Indian Ocean port
of Tanga.

 

Total said it had reached an agreement with Uganda protecting its rights and
obligations in the pipeline’s construction and operation - known as the host
government agreement.

 

“We have today reached major milestones which pave the way to the Final
Investment Decision in the coming months,” Pierre Jessua, Managing Director
of Total E&P Uganda, said in a statement.

 

“We now look forward to concluding a similar HGA (host government agreement)
with the Government of Tanzania and to completing the tendering process for
all major engineering,

 

procurement and construction contracts.”

 

Total said a meeting between President Yoweri Museveni and its Chief
Executive Officer Patrick Pouyanné also agreed to conditions allowing Uganda
National Oil Company to join the project.

 

Total is the major shareholder in Uganda’s oil fields after agreeing in
April to buy Tullow Oil’s entire stake in jointly-held onshore fields in
Uganda for $575 million.

 

Tullow said this week it was confident of finalising the sale in fourth
quarter of this year.

 

The other partner in the 230,000 barrel-per-day project is China’s CNOOC.

 

The government said last year once pipeline construction begins, it would
take 2-1/2 to three years to complete.

 

Uganda discovered crude oil reserves estimated at 6 billion barrels in the
Albertine rift basin near the border with the Democratic Republic of Congo
in 2006.

 

 

 

Congo says it will reimburse VAT to mining companies after audit

(Reuters) - Congo said on Saturday it will reimburse value-added tax
payments to mining companies operating in the country following an audit to
determine how much it owes them, after a backlash over an earlier decision
to stop payments.

 

Africa’s top copper producer has suspended the VAT on mining imports since
July 2016 to help operators during a commodity price downturn, and to pay
down hundreds of millions of dollars in VAT reimbursements owed to the
companies.

 

In August, the cash-strapped government said it was suspending the tax
exemption in an effort to bolster government coffers dented by the impact of
the coronavirus pandemic.

 

Following a backlash by mining operators, the government said it would
conduct a joint commission with the miners to determine the value of the
debt and the terms of its reimbursement, Budget Minister Jean-Baudouin Mayo
told a cabinet meeting on Friday, according to official minutes.

 

“The government is committed to refunding VAT credits to miners after a
joint audit of the actual amount of VAT stock to be refunded,” Mayo said,
according to official minutes.

 

It is not clear how much the government currently owes companies operating
in Congo which include Glencore, China Molybdenum and Barrick. The debt
stood at about $700 million in 2016.

 

Congo is the world’s leading miner of cobalt, which is used in electric car
batteries.

 

Its economy, hit by the coronavirus crisis that has hammered demand for
copper and other commodities, is forecast to contract by 1.7% this year,
according to the central bank.

 

 

 

S.Africa's central bank to pause cutting on Sept.17, trim in Nov

JOHANNESBURG (Reuters) - South Africa’s Reserve Bank will pause in easing
its repo rate next week and cut it by a quarter of a percent to 3.25% in
November to cushion a deep pandemic-driven economic contraction before
inflation resurfaces, a Reuters poll found on Friday.

 

Following 300 basis points of SARB cuts this year, a poll taken in the past
week showed 15 economists saw the repo rate on held on Thursday while 10
predicted a modest 25 basis point cut to 3.25%.

 

However, the survey median shows rates will be cut in November for the last
time in this cycle before the SARB begins raising rates to 3.50% in either
July or September.

 

“The SARB still has room for another rate cut worth 25 basis points, but
this will be contingent on data,” wrote Citi’s Luis Costa.

 

Costa cautioned that space for further cuts is narrow due to the structure
of government spending.

 

Stagflation -- persistent high unemployment and inflation with weak or no
economic growth -- was a problem familiar to South Africa’s citizens and
policymakers before disinflation took hold in the past two years.

 

Inflation sank to its lowest in more than 15 years in May at 2.1%, but is
back on the rise even as the economy, already weak before the coronavirus
pandemic, reels from shutdowns and weak consumer demand.

 

“We have increased our forecast for 2020 inflation to 3.6%, as the recent
jump in inflation to 3.2% indicates inflation will likely rise above 4% by
year-end. That would imply negative real rates, which are a major concern
for the central bank,” said Francesca Beausang of Continuum Economics.

 

Beausang added that given the scale of the South African recession, a rate
hike was unlikely any time soon.

 

For his part, SARB governor Lesetja Kganyago has made it clear he is not
excessively concerned about upside inflationary developments over the next
18 months as they are already built into the central bank’s forecast.

 

Inflation is expected to average 3.3% this year and quicken to 4.2% in 2021,
according to the latest Reuters poll, slightly higher than last month.
Economists attribute this to the rest of global economic activity picking up
after lockdowns end and little to do with domestic demand.

 

South Africa’s economy shrank a staggering 51% in the second quarter on a
seasonally-adjusted, annualised basis. The poll showed the economy
contracting 8.5% this year as a whole, 0.5 percentage points weaker than
last month’s median.

 

 

 

Kenyan economy to grow at under 2.5% this year -finance minister

NAIROBI (Reuters) - Kenya’s economy is expected to grow by less than 2.5%
this year, the finance minister said on Friday, as more evidence of the
economic damage caused by the health crisis emerges.

 

The projected growth rate will be a slide from 5.4% last year, Ukur Yatani
told a virtual event to launch budget making for the 2021/22 financial year,
battered by loss of jobs, a steep contraction in tourism and a drop in
government revenues.

 

“The COVID-19 pandemic is likely to cause a major economic shock,” the
minister said.

 

Thousands of workers have lost their jobs and some employees have had their
hours reduced.

 

The tourism sector, which many households rely on for their livelihoods, is
expected to contract by 18.7% this year and 9.1% next year, before it starts
to grow slightly in 2022, the Treasury said.

 

The government’s revenue from taxes dropped by 10% in the year to August, or
120 billion shillings ($1.11 billion), the finance ministry said, partly due
to tax cuts announced in April to support consumer demand in the face of
pandemic.

 

The coronavirus crisis has also upended the government’s budget deficit
reduction plans.

 

In the 2021/22 (July-June) financial year, the finance ministry said it will
target a fiscal deficit of 7.3% of GDP, slightly down from this fiscal
year’s deficit of 8.4%.

 

Pre-pandemic forecasts had put the fiscal deficit for this financial year at
4.9% of GDP, narrowing to 3.9% in 2021/22.

 

Kanini Kega, the chairman of parliament’s budget committee, warned officials
against taking the budget plans lightly, normally in the form of additional
requests for cash during a given financial year, after the budget has been
approved.

 

“The huge variations and lack of predictability has eroded the credibility
of our budget,” he said.

 

($1 = 108.4000 Kenyan shillings)

 

 

S.African bank profits seen taking years to recover from COVID-19 hit

JOHANNESBURG (Reuters) - Coronavirus-related bad debts have set South
African banks’ profits back by around a decade or more and they are unlikely
to recover for at least three years, two top executives told Reuters, as the
economy struggles with recession.

 

The country’s four biggest lenders have long battled to grow profits in a
perennially weak home economy, but any gains were wiped out within a few
months as the pandemic prompted massive charges for rising bad loans.

 

Half-year profits at Standard Bank, Africa’s largest bank by assets, plunged
to their lowest in eight years while FirstRand’s full-year headline earnings
per share - the main profit measure in South Africa - fell to a seven-year
low.

 

Nedbank’s half-year earnings plunged to 15-year lows while Absa’s were set
even further back.

 

Alan Pullinger, FirstRand CEO, told Reuters earnings would likely be
restored some time between 2023 and end-2024, though any estimates were
subject to huge uncertainty.

 

“I’m not sure it’s going to be much sooner than that, and equally I would be
disappointed if it’s much later than that,” he said.

 

The big four banks booked impairment charges worth around 58 billion rand
($3.5 billion), including actual losses on bad loans and provisions for
possible future bad debts, according to Reuters calculations.

 

“Earnings restoration is probably three to four years out if we use the
global financial crisis as a benchmark,” said the CEO of one of the other
major lenders, who did not want to be named due to uncertainty around the
health and economic outlooks.

 

GREAT UNKNOWN

Other banks declined to give estimates. None of the lenders, whose share
prices have plummeted on worries over their prospects, have publicly
provided guidance on when earnings will recover to 2019 levels.

 

Some investors, however, said the banks remained good long-term bets. While
the pandemic will deal them a more serious blow than the 2008-2009 global
financial crisis, when they got off relatively lightly, their capital levels
are high and lending growth has been relatively conservative.

 

“The first-half was a write-off ... But they went into (the crisis) in a
better position,” said Richard Cheesman, senior investment analyst at Protea
Capital Management, a banking sector investor.

 

The most serious long-term drag they face now is the ailing economy, already
in recession when the crisis hit, and which recorded its largest contraction
ever in the second quarter.

 

“The prospects for economic growth are really poor and likely to remain that
way,” said Anthony Sedgwick, co-founder of another bank investor, Abax
Investments.

 

More immediate risks to earnings remain. It’s uncertain how borrowers will
cope when debt relief measures like payment holidays end, and banks could
yet face more bad debt charges.

 

Mahin Dissanayake, head of bank ratings for sub-Saharan Africa at Fitch
Ratings, said lenders had provisioned for bad debts conservatively, but it
was difficult to predict what would happen in even the next few months given
the level of uncertainty around the economic recovery.

 

“It’s a big unknown,” he said.

 

($1 = 16.7512 rand)

 

 

 

Risk appetite aids South Africa's rand recovery, stocks up

JOHANNESBURG (Reuters) - South Africa’s rand gained on Friday, shaking-off
negative news on the domestic economy from earlier in the week, with
yield-hungry investors supporting demand for the currency.

 

At 1510 GMT, the rand was 1.15% firmer at 16.7300 per dollar.

 

Data in the week showed the economy shrank 51% in the second quarter due to
coronavirus restrictions, the current account had swung into deficit, and
the mining and manufacturing sectors continued to contract in July, albeit
at a slower pace.

 

The net result was turbulent trading for the rand, but dealers said the
still-high yield, or carry, offered by the currency was sustaining demand.

 

“The effects of local statistics and data have been short lived of recent,
but this cannot be overlooked forever. Market conditions will eventually
change and this could prove detrimental for the ZAR (rand),” Warren
Venketas, market analyst at IG, said in a note.

 

“For now, the ZAR is riding a global risk seeking wave which keeps pushing
through domestic hurdles.”

 

In fixed income, the yield on the benchmark 2030 government issue was up 2.5
basis points to 9.36%.

 

Stocks were firmer, with the Johannesburg all share index up 0.24% to 56,088
points, while the Top 40 index closed 0.36% firmer at 51,715 points.

 

“All the bad news is out,” said Independent Securities trader Ryan Woods,
referring to the economic data. “And the talks that we may go into level 1
(eased lockdown restrictions) next week has also helped us somewhat.”

 

 

 

Nigerian President Buhari directs central bank to stop issuing foreign
exchange for food imports

ABUJA (Reuters) - Nigerian President Muhammadu Buhari on Thursday directed
the central bank to stop issuing foreign exchange for food and fertiliser
imports, according to a statement issued by his spokesman.

 

 

 

Sudan declares state of economic emergency due to fall of currency

KHARTOUM (Reuters) - Sudan declared an economic state of emergency on
Thursday after its currency fell sharply in recent weeks due to “systematic
vandalism,” officials said.

 

The transitional government, in charge of the country since the ouster of
Omar al-Bashir last year, will set up special courts in the next days to
fight smuggling and other illicit activities undermining the economy,
officials told a televised news conference.

 

The pound had fluctuated drastically in recent days, prompting major food
suppliers to halt distribution of their products and pushing prices of food
up between 50% and 100% at supermarkets and retailers, a Reuters witness
said.

 

It comes at a time of record Nile River flooding that has left tens of
thousands of people homeless. The government said it had allocated more than
150 million Sudanese pounds ($2.73 million) to help flood victims, the state
news agency reported.

 

The government under Bashir had previously tried to crack down on the
black-market traders by arresting some of them, but others remained
persistent. The currency has been devalued four times since 2018.

 

Inflation in Sudan is second only to that of Venezuela, with the headline
rate climbing to 143.78% in July from 136.36% in June.

 

Security forces would also step up controls at borders and airports to stop
a smuggling of commodities such as gold, officials said.

 

 

 

TikTok rejects Microsoft bid at eleventh hour

Microsoft has said that its offer to buy the US operations of hugely popular
video-sharing app TikTok has been rejected, paving the way for Oracle to
make a last-minute bid.

 

US President Donald Trump gave a 15 September deadline for the Chinese-owned
app to sell or shut down.

 

The Trump administration claims TikTok and other Chinese apps are national
security threats.

 

Microsoft and Oracle led the race to buy TikTok from Chinese firm ByteDance.

 

The Wall Street Journal and Reuters reported that Oracle, which sells
database technology and cloud systems to businesses, had won the bidding
war, citing people familiar with the matter.

 

Earlier reports had said Oracle was seriously considering buying TikTok's
businesses in the US, Canada, Australia and New Zealand with investment
firms, including General Atlantic and Sequoia Capital.

 

A TikTok spokesperson told the BBC the firm was "not commenting on either
the Microsoft development nor the Oracle speculation".

 

On Sunday Microsoft announced that “ByteDance let us know today they would
not be selling TikTok’s US operations to Microsoft. We are confident our
proposal would have been good for TikTok’s users, while protecting national
security interests.”

 

“We look forward to seeing how the service evolves in these important
areas,” its statement added.

 

This paves the way for Oracle, who Mr Trump said would be "a great company"
to take over TikTok's US operations last month.

 

Oracle's chairman Larry Ellison is a supporter of Mr Trump and held a
fundraising event for him in February.

 

Earlier this month Mr Trump said the government should get a "substantial
portion" of the sale price of TikTok's US unit if an American firm buys it.

 

Why is this happening?

Mr Trump ordered TikTok's owner ByteDance to sell its US business within 90
days or face being shut downThe forced sale of TikTok's US business is part
of a wider crackdown on Chinese technology firms in America.

 

Mr Trump has said apps such as TikTok, WeChat and equipment maker Huawei
pose a national security threat because data collected about users can be
shared with the Chinese government. The Chinese firms deny this claim.

 

Huawei also faces a ban on 15 September that affects its non-American
suppliers. They will have to stop shipping to Huawei if their products
contain US technology. To be able to supply Huawei they will need a licence
from the US Commerce Department.

 

What does China have to say about all this?

Two weeks ago, China announced new government restrictions on tech exports.
The rules are believed to be aimed at delaying the TikTok sale. The
restrictions mean some technologies such as AI, will need government
approval before they can be exported.

 

TikTok has become so popular because it has highly-advanced algorithms that
predict what users want to watch.

 

This sort of technology will now be under the spotlight from the Chinese
government.

 

These highly-valued algorithms will not be sold or transferred according to
a report in the South China Morning Post.

 

Chinese tech firms caught in the middle of US-China battle

TikTok is now the second example of a high profile Chinese company that has
become caught up in the US China tech cold war.

 

Huawei was first - getting embroiled in a battle that has now effectively
seen it crippled from doing any business in the US or buying any parts that
have US components in them.

 

The Trump administration says this is about levelling the playing field and
national security - protecting American's data and privacy.

 

But Beijing says this is the US being a bully - dissatisfied with its lack
of progress in key technology areas, it is worried about losing ground, and
that's why it has either tried to block Chinese tech or acquire it - in the
case of TikTok.

 

It's still not clear though what form TikTok will have if indeed it ends up
in American hands - and how popular it will remain with American users.

 

All of this of course could slow down the firm's growth in the US, but it's
beginning to hint that it has already turned its focus elsewhere from the
markets it's being pushed out of - the US and India - and investing in South
East Asian markets instead.

 

What will a forced sale mean for users of TikTok?

It's unclear what will happen to the popular video-sharing app which has
around 100m active users in the US.

 

Neither Microsoft or Oracle are seen as the most obvious suitors for TikTok,
which has a predominantly young audience who share short-form lip-synching
videos.

 

Any deal will still need approval from a number of interested parties
including the US and Chinese governments, ByteDance and investors.

 

In August, TikTok filed a lawsuit against the US government in response to
Mr Trump's executive order to ban the app.--bbc

 

 

 

ARM: UK-based chip designer sold to US firm Nvidia

UK-based computer chip designer ARM Holdings is being sold to the American
graphics chip specialist Nvidia.

The deal values ARM at $40bn (£31.2bn), four years after it was bought by
Japanese conglomerate Softbank for $32bn.

ARM's technology is at the heart of most smartphones, among many other
devices.

 

Nvidia has promised to keep the business based in the UK, to hire more
staff, and to retain ARM's brand.

It added that the deal would create "the premier computing company for the
age of artificial intelligence" (AI).

"ARM will remain headquartered in Cambridge," said Nvidia's chief executive
Jensen Huang.

"We will expand on this great site and build a world-class AI research
facility, supporting developments in healthcare, life sciences, robotics,
self-driving cars and other fields."

 

Softbank made commitments to secure jobs and keep ARM's headquarters in the
UK until September next year.

"So far, when you read the announcement coming from Nvidia they said they
will honour that Softbank has made at the time," said Sonja Laud, chief
investment officer at Legal & General Investment Management.

 

"But with the expiry about to happen and obviously the Brexit negotiations
under way it will be very interesting to see how this develops in the
future."

 

This appears to address concerns that British jobs would be lost and
decision-making shifted to the US. Last week, the Labour Party had urged the
government to intervene.

 

But two of ARM's co-founders have raised other issues about the takeover.

Hermann Hauser and Tudor Brown had suggested ARM should remain "neutral",
rather than be owned by a company like Nvidia, which produces its own
processors.

The concern is that there would be a conflict of interest since ARM's
clients would become dependent on a business with which many also compete
for sales.

Moreover, the two co-founders also claimed that once ARM was owned by an
American firm, Washington could try to block Chinese companies from using
its knowhow as part of a wider trade clash between the countries.

 

"If ARM becomes a US subsidiary of a US company, it falls under the Cfius
[Committee on Foreign Investment in the United States] regulations," Mr
Hauser told BBC Radio 4's Today programme.

 

"[That] means that if hundreds of UK companies that incorporate ARM's
[technology] in their products, want to sell it, and export it to anywhere
in the world including China - which is a major market - the decision on
whether they will be allowed to export it will be made in the White House
and not in Downing Street."

He added that he believed the pledge to retain and increase the number of UK
jobs was "meaningless" unless UK ministers stepped in to make it legally
enforceable.

Nvidia has said that it intends to maintain the "global customer neutrality"
on which ARM's success rests.

 

Chip creators

ARM creates computer chip designs that others then customise to their own
ends. It also develops instruction sets, which define how software controls
processors.

It is based in Cambridge but also has offices across the world, including a
joint venture in Shenzhen, China.

 

Hundreds of companies license its innovations including Apple, Samsung,
Huawei and Qualcomm. To date, ARM says 180 billion chips have been made
based on its solutions.

When Softbank acquired ARM, it promised to keep the company's headquarters
in the UK and to increase the number of local jobs, which it did.

 

Softbank's founder Masayoshi Son described the firm as being a "crystal
ball" that would help him predict where tech was heading. But losses on
other investments, including the office rental company WeWork, prompted a
rethink.

 

California-headquartered Nvidia overtook Intel to become the world's most
valuable chipmaker in July.

Until now, it has specialised in high-end graphics processing units (GPUs).
These are commonly used by gamers to deliver more detailed visuals, as well
as by professionals for tasks including scientific research, machine
learning, and cryptocurrency "mining".

 

Nvidia is also one of ARM's clients, using its designs to create its line-up
of Tegra computer processing units (CPUs).

Under the terms of the deal, Nvidia will pay Softbank $21.5bn in its own
stock and $12bn in cash. It will follow with up to a further $5bn in cash or
stock if certain targets are met.

 

Nvidia will also issue $1.5bn in equity to ARM's employees.

Server chips

Mr Huang has already said that one of the changes he wants to make is to
accelerate development of ARM's designs for CPUs used in computer servers -
a rapidly growing sector.

Amazon is among companies that are already betting on the tech.

 

 

But experts say one risk Nvidia faces is that the takeover could encourage
ARM's wider client list to shift focus to a rival type of chip technology,
which lags behind in terms of adoption but has the benefit of not being
controlled by one company.

 

"ARM is facing growing competition from RISC-V, an open-source
architecture," wrote CCS Insight's Geoff Blaber in a recent research note.

"If its partners believed that ARM's integrity and independence was
compromised, it would accelerate the growth of RISC-V and in the process
devalue ARM."

Mr Blaber also suggested regulators might block the deal.

 

"This process will take months if not years with a high chance of failure,"
he told the BBC.

Presentational grey line

Analysis box by Rory Cellan-Jones, technology correspondent

It's a deal which the man who founded ARM says is a disaster.

And many in the UK's technology industry will agree with Hermann Hauser.

 

He opposed the 2016 sale of the chip designer to Softbank but accepted that
the Japanese firm stood by its guarantees to boost employment and research
in Cambridge.

But a takeover by Nvidia, one of the many firms that licences ARM's designs,
appears to pose a threat to its business model - why will its hundreds of
other customers now have faith that they will have equal access to its
technology?

 

In recent days leading figures in the Cambridge technology sector have
lobbied Downing Street, calling for ministers to intervene to bring ARM back
under UK ownership. There have been signs that the government is considering
a more active industrial policy.

 

Dominic Cummings, who has talked of the need for the UK to have a trillion
dollar tech company, is leading the drive for a more interventionist
approach.

Now, with Hermann Hauser and others warning that this deal will make Britain
a US vassal state, the government is under pressure to step in and ensure
that control over vital home-grown technology is not lost to a foreign
power.-bbc

 

 

Unemployment: Planned redundancies twice the rate of last recession

Employers in Britain are planning more than twice as many redundancies than
they did at the height of the last recession, new figures show.

 

About 180,000 job cuts were planned from January to March 2009, while
380,000 were planned from May to July this year.

 

Completed redundancies could reach 735,000 this autumn, researchers say.

 

The figures were obtained by an Institute for Employment Studies (IES)
Freedom of Information request.

 

Social distancing measures to prevent the spread of Covid-19 brought large
parts of the UK economy to a standstill, forcing workers to stay at home,
closing shops and bringing transport to a halt.

 

As a result, many businesses have been forced to consider reducing their
workforces by making employees redundant.

 

Employers in England, Scotland and Wales must notify the Insolvency Service
if they plan to make 20 or more workers redundant in any single
"establishment" using a form called HR1.

 

This information is not usually published, but on 8 September a Freedom of
Information request by the BBC revealed that employers had listed more than
380,000 positions as at risk between May and July 2020.

 

The IES has now obtained and analysed data stretching back as far as 2008.

 

This shows that the current redundancy wave is more than double the previous
three-monthly peak of 180,000 from January to March 2009.

 

Then the crisis, which had begun in the finance industry, was affecting most
of the economy - and forcing many employers to reduce their staff.

 

"Comparing what is happening now with what was happening in the last
recession shows us we are experiencing a jobs crisis unlike anything we have
seen before," said Tony Wilson, Director of the IES.

 

The IES is calling for extra support for viable firms to help them retain
staff, as well as training and advice to help those who lose their jobs find
new employment rapidly.

 

A government spokesperson said: "Supporting jobs is an absolute priority
which is why we've set out a comprehensive 'Plan for Jobs' to protect,
create and support jobs across the UK by providing significant, targeted
support where it is needed the most."

 

Government measures include the £2bn "kickstart scheme" to encourage
employers to create new training placements and apprenticeships, extra work
coaches in job centres, and a £1,000 incentive to encourage employers to
bring staff back from furlough.

 

Will these planned redundancies be completed?

Because they are filed at the start of the redundancy process, HR1 forms
give an early indication of what is happening in the labour market.

 

The HR1 redundancy figures don't pick up employers cutting fewer than 20
jobs, so the final total of redundancies is usually higher.

 

The Office for National Statistics also publishes a redundancy count based
on the Labour Force Survey, which is used to calculate the monthly
unemployment rate.

 

This is always published a few months after the data is gathered, so it
hasn't yet picked up a big spike in redundancies or unemployment.

 

However, Labour Force Survey redundancy figures have been around 20% higher
than HR1 figures in recent years.

 

On this basis, the IES estimates that 445,000 jobs could be made redundant
between July and September, considerably worse than the three-month peak in
the previous recession.

 

During that recession, however, actual redundancies were 80% higher than
notified redundancies - which could lead to as many as 735,000 positions
being cut at the height of the coronavirus crisis.

 

However, companies sometimes announce plans redundancies which they don't
actually make, because circumstances change.

 

Early 2019, for example, saw a big spike in redundancy plans which were
never completed. Mr Wilson believes they could have been linked to fears of
a no-deal Brexit, which did not happen.

 

The 2018 spike could be linked to the collapse of the construction company
Carillion, which had a lesser impact on jobs than initially feared.

 

Companies in Northern Ireland file HR1 forms with the Northern Ireland
Statistics and Research Agency and they are not included in these
figures.--bbc

 

 

 

YouTube faces legal battle over British children's privacy

YouTube is facing a legal battle for allegedly breaching the privacy and
data rights of under-13s in the UK.

 

A claim lodged with the High Court against parent company Google accuses the
firm of collecting children's data without parental consent.

 

Privacy expert Duncan McCann, who is bringing the action, argues this is a
breach of UK and European (EU) law.

 

A YouTube spokesperson said it does not comment on pending litigation and
the platform is not for use by under-13s.

 

Mr McCann, a father of three children under the age of 13, believes that if
the case is successful, damages of between £100 and £500 could be payable to
those whose data was breached.

 

"When the internet first emerged, we used to be worried about how children
used the internet, said Mr McCann.

 

"That is still a problem, but now it's a two-way street. We need to focus on
how the internet is using our children, and ask ourselves if we're
comfortable with them becoming a product for these digital platforms?"

 

"That's the future I don't want," he added.

 

He told the BBC that the class action is the first in Europe brought against
a technology firm on behalf of children. He says that estimated damages of
more than £2bn are being sought for about five million British children as
well as their parents or guardians.

 

He will argue that YouTube and Google have breached the UK's Data Protection
Act and the EU's General Data Protection Regulations.

 

The case will focus on children who have watched YouTube since May 2018,
when the new Data Protection Act became law.

 

"I think we're at the stage, where the only way we can move forward and hold
these companies accountable is through the legal process," Mr McCann said.

 

A YouTube spokesperson said: "We don't comment on pending litigation.
YouTube is not for children under the age of 13.

 

"We launched the YouTube Kids app as a dedicated destination for kids and
have made further changes that allow us to better protect kids and families
on YouTube," they added.

 

The video platform has also previously said that it does not sell its users'
personal information to advertising companies.

 

The case is not expected before next autumn.

 

Mr McCann also told the BBC that it will also depend on the outcome of
another data and privacy case being brought against Google.

 

Campaign group Foxglove and law firm Hausfeld have also said they would
support Mr McCann's case.--bbc

 

 

 

 

 

 


 


 


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.

 


 

 


(c) 2020 Web: <http://www.bullszimbabwe.com/>  www.bullszimbabwe.com Email:
<mailto:info at bulls.co.zw> info at bulls.co.zw Tel: +263 4 2927658 Cell: +263 77
344 1674

 


 

 

 

 

 

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