Major International Business Headlines Brief::: 18 September 2020

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Major International Business Headlines Brief::: 18 September 2020

 


 

 


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

 


 

 


 

 

ü  Thomas Cook's Chinese owner sees sunny horizons

ü  Rising virus rates threaten economy, warns Bank

ü  Covid pushes New Zealand into worst recession in years

ü  John Lewis scraps bonus for first time since 1953

ü  Ghana economy contracts for the first time in nearly four decades

ü  Apple will launch its online store in India on September 23

ü  CaixaBank and Bankia to merge, creating Spain’s largest bank

ü  China’s yuan is rallying sharply against the dollar — and analysts say
there’s room to run

ü  Dollar set for weekly loss as economic confidence sags

ü  ByteDance plans TikTok IPO to win U.S. deal as deadline looms: sources

ü  Stocks rally but lacklustre without fresh stimulus

ü  Ericsson to buy wireless networking firm Cradlepoint in $1.1 billion deal

ü  Oil rises as Goldman predicts deficit, new storm builds in Gulf

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 


Thomas Cook's Chinese owner sees sunny horizons

Thomas Cook's owner Fosun has ambitious expansion plans for the brands it
owns, once the global economy recovers.

 

The Chinese travel firm, which also owns Club Med, expects the battered
industry to pick up strongly once a vaccine has been found.

 

It relaunched Thomas Cook in China in July which it describes as a success
with more than 170,000 customers.

 

This week it relaunched the brand in the UK as an online travel agency but
says this is only "phase one".

 

Thomas Cook went bust last year leaving thousands of its customers stranded
overseas. Since being completely taken over by China's Fosun Tourism Group
it has been dramatically downsized.

 

Fosun was already a major shareholder in Thomas Cook before it collapsed
last September. One year later and it has relaunched in both the UK and
China.

 

"In China, Thomas Cook has been relaunched as more than just an online
travel agency. Instead, it is a lifestyle platform which offers a range of
related products and services," Fosun Tourism Group chief executive and
chairman Jim Qian told the BBC.

 

This lifestyle platform includes hotels, tickets, entertainment, education
and retailers selling gifts and souvenirs. It even includes a delivery firm
to help holidaymakers transport bulky purchases back to their home.

 

 

"We launched as an online travel agency first in the UK but we want to add
more and more so it becomes a similar platform," Mr Qian added.

 

The timing of the UK relaunch has been questioned given the current Covid-19
travel-related downturn and strict restrictions still in place.

 

"It was a soft launch to test the process and make sure things are working
well ahead of a full recovery. We will gradually add more products on this
platform."

 

Strong recovery

Fosun has already seen a strong recovery in tourism within China, for all
its travel and leisure brands, which also includes high-end resort chain
Club Med.

 

Club Med resorts are gradually reopening globally and Fosun wants to expand
the upmarket brand. It has started building 10 new resorts to be ready for
the end of 2022 and has more in the pipeline

 

In China it has also launched a new brand called Club Med Joyview aimed at
short city-break travellers.

 

"The companies that can survive this travel downturn will be much stronger
on the other side as they have shown they can be efficiently managed, " Mr
Qian added.

 

Concept stores

His plan is to launch a handful of bricks-and-mortar Thomas Cook stores
starting with Shanghai early next year. While they will be "multifunctional
and more than just travel agencies", they will not be on a large scale.

 

The first store will feature attractions such as skiing machines and ski
instructors, cafes serving exotic drinks and children's education classes.

 

Thomas Cook's new store in Shanghai won't just be a travel agency.

"We want to test a lot of things in China which in the future can be
launched globally. These new-style concept stores show our commitment to
having a solid offline presence, building on physical resorts like the Club
Med chain."

 

Thomas Cook has been operating in China for more than 100 years. The UK
brand entered into a joint venture partnership with Fosun in 2016 and then
became fully Chinese-owned after it went bust last year.--bbc

 

 

 

Rising virus rates threaten economy, warns Bank

The Bank of England has warned that the rising rate of coronavirus
infections and a lack of clarity over the UK's future trade relationship
with the EU could threaten the economic recovery.

 

It said much of output lost during lockdown had been recovered but the
outlook remained "unusually uncertain".

 

The UK is still in a deep recession, while Covid-19 infections are at their
highest level since mid May.

 

Citing the uncertainty, the Bank held interest rates at 0.1%, a historic
low.

 

It added that it would continue its monetary support for the economy, but
stopped short of increasing its bond-buying programme or reducing interest
rates further.

 

What are interest rates?

If you borrow money you usually have to pay a small fee set by the person
lending to you. How high that fee - or interest rate - is depends on a "base
rate" that is set by the Bank of England at meetings throughout the year.

 

The rate determines how much banks have to pay to borrow money, and that has
a knock-on effect on how much the bank charges consumers to borrow.

 

When the economy is growing quickly the Bank tries to stop it overheating by
raising interest rates, making it more expensive to borrow.

 

When the economy is sluggish, cutting the Bank's base rate lowers the cost
of borrowing and can encourage businesses and consumers to spend more.

 

The Monetary Policy Committee (MPC), which sets interest rate policy, said
previous projections of economic recovery were "on the assumption of an
immediate, orderly move to a comprehensive free trade agreement with the
European Union on 1 January 2021".

 

Economic recovery would also depend on the evolution of the pandemic and
measures taken to protect public health, the MPC said.

 

"The recent increases in Covid-19 cases in some parts of the world,
including the United Kingdom, have the potential to weigh further on
economic activity, albeit probably on a lesser scale than seen earlier in
the year," it said.

 

No change from the Bank of England on record low interest rates, nor on its
wider support for the economy. On the face of it, the economy is less weak
than it expected even last month, but profound uncertainties remain.

 

The Bank in particular pointed to "recent increases in Covid-19", including
in the UK, that "have the potential to weigh further on economic activity",
as well as a recent fall in sterling partly "reflecting recent Brexit
developments".

 

Given rates are at rock bottom already, sterling was further hit from the
fact that the Bank's deliberations over rates included a presentation over
how "negative interest rates" might work.

 

The Bank had been concerned of the impact of, in effect, lenders paying
borrowers for the health of parts of the banking system. It is, as it has
previously signalled, looking at how this could be achieved in practice.
Should the uncertainties visible to all materialise in the coming weeks for
the UK, that extraordinary and unprecedented tool is being prepared as an
option.

 

The government has had to impose new social distancing restrictions across
England, as rising cases have forced many areas into local lockdowns.

 

On Wednesday, the Prime Minister said the government was doing "everything
in our power" to prevent another nationwide lockdown, which could have
"disastrous" financial consequences for the UK.

 

Negative rates

The Bank of England said despite a stronger than expected recovery in the
last few months, the economy was still about 7% smaller than at the end of
last year.

 

Usually if the economy is not growing strongly enough, the Bank of England
considers lowering interest rates to encourage firms to invest and savers to
spend.

 

However, interest rates are already close to zero after two emergency rate
cuts in March.

 

Minutes from this month's meeting show that the MPC discussed the use of
negative interest rates to stimulate the economy. Last month, the Bank's
governor, Andrew Bailey, appeared to rule that out, though he said negative
interest rates remained in the "tool box".

 

If interest rates are negative the Bank of England charges for any deposits
it holds on behalf of the banks. That encourages banks to lend the money to
business rather than deposit it.

 

What are negative interest rates?

What exactly is the Bank of England interest rate?

The Bank also signalled that it had no intention of raising interest rates
until "significant progress" had been made in getting inflation back to the
Bank's 2% target. It is currently at a five-year low of 0.2%.

 

The Bank said it did not expect inflation to return to target levels for
another two years.

 

"We expect interest rates to be no higher than 0.1% for the next five
years," said Andrew Wishart, UK economist at Capital Economics.bbc

 

 

 

Covid pushes New Zealand into worst recession in years

New Zealand is in its deepest recession in decades, following strict
measures in response to the Covid-19 pandemic which were widely praised.

 

The country's GDP shrank by 12.2% between April and June as the lockdown and
border closures hit.

 

It is New Zealand's first recession since the global financial crisis and
its worst since 1987, when the current system of measurement began.

 

But the government hopes its pandemic response will lead to a quick
recovery.

 

The nation of nearly five million was briefly declared virus free, and
although it still has a handful of cases, it has only had 25 deaths.

 

The economy is likely to be a key issue in next month's election, which was
delayed after an unexpected spike in Covid-19 cases in August.

 

Stats NZ spokesman Paul Pascoe said the measures implemented since 19 March
have had a huge impact of some sectors of the economy.

 

"Industries like retail, accommodation and restaurants, and transport saw
significant declines in production because they were most directly affected
by the international travel ban and strict nationwide lockdown," he said.

 

Prime Minister Jacinda Ardern's government has said the success in
suppressing the virus is likely to help recovery prospects.

 

Finance Minister Grant Robertson said the GDP numbers were better than
expected, and suggested a strong recovery ahead.

 

"Going hard and early means that we can come back faster and stronger," he
said.

 

Some economists are also predicting a swift recovery, because of New
Zealand's strong response to the virus.

 

"We expect the June quarter's record-breaking GDP decline to be followed by
a record-breaking rise in the September quarter," said Westpac Senior
Economist Michael Gordon.

 

Ms Ardern said she backs the economy's ability to rebound.

 

"I think one of the key questions here is not just about what's happened
over that June quarter in terms of the effect of lockdown. It's actually
about the rebound - and I back New Zealand's rebound," she said.

 

Ms Ardern said activity is already picking up as the country has been able
to open up a lot more quickly compared with other nations.

 

"Even with some of the more recent restrictions, we've seen a return to
activity, whereas compared to Australia we are in a much better position,"
she added.

 

However Treasury forecasts released yesterday suggested massive debt and
continuing disruptions are likely to delay a full recovery.

 

The opposition National party accused the government of a lack of pragmatism
that made the impact worse than it needed to be.

 

New Zealand recorded a steeper drop than neighbouring Australia, where the
lockdown was less severe.

 

But the state of Victoria has faced a second lockdown, which is likely to
weigh on Australia's economic recovery.--bbc

 

 

 

 

John Lewis scraps bonus for first time since 1953

John Lewis has confirmed that staff will not receive a bonus for the first
time since 1953 after it was hit by lockdown store closures.

 

The retailer - which also owns Waitrose - posted a huge £635m pre-tax loss
for the six months to 25 July after higher costs offset a 1% rise in sales.

 

Its chairwoman told staff on Thursday the announcement "will come as a
blow".

 

Even before Covid-19 hit, the chain had warned it might not pay the usual
staff bonus as competition ate into profits.

 

The group's first-half loss was £635m once exceptional items were taken into
account, including a £470m write-down in the value of its stores.

 

Excluding those one-off costs, the group's loss in those six months stood at
£55m.

 

The last time that the chain, which operates as a partnership, decided not
to pay a bonus to its staff was in the aftermath of World War Two.

 

Chairwoman Dame Sharon White said: "We came through then to be even stronger
and we will do so again."

 

She added: "I know this will come as a blow to partners who have worked so
hard this year. The decision in no way detracts from the commitment and
dedication that you have shown."

 

The payment of bonuses will only resume once annual profits rise to above
£150m and debt falls, she said.

 

The retailer said store closures during lockdown and customers buying less
profitable items, such as toilet paper or laptops, had hit trade.

 

It estimated that in its first half, John Lewis shops saw a £200m drop in
sales, while the wider group saw additional coronavirus-related costs total
about £50m.

 

But in a statement, it said that its Waitrose supermarkets had seen "a
return to the weekly shop", with like-for-like sales up 10% year-on-year.

 

A 'whopping' loss

John Lewis has had a whopping half-year loss. But it was mainly down to some
big one off costs, including a £470m impairment charge against the value of
its department stores, reflecting the fact that they don't play as big a
role as they used to.

 

Stores have a halo effect in boosting online sales. Many shoppers browse
before going home and ordering online. Before the crisis, John Lewis thought
its department stores helped generate around £6 of every £10 spent online.
John Lewis now thinks that figure is nearer £3.

 

Eight John Lewis stores have closed, costing the business another £105m.

 

These results lay bare the impact of the pandemic. But the the company says
this is better than what it expected in April. John Lewis makes most of its
profits in the second half of the year. Christmas is key. With the outcome
still very uncertain, it now thinks the most likely outcome is a "small loss
or small profit" for the full year.

 

Changing shopping habits

Dame Sharon said the pandemic had brought forward changes in consumer
shopping habits "which might have taken five years into five months".

 

At John Lewis stores, online sales surged by 73% in the six months to 25
July, "helping to offset the impact of shop closures". They now account for
more than 60% of sales overall for the department store chain, up from 40%
before the pandemic hit.

 

The group added that a shift towards increased home working had affected
people's purchases, with increased sales of tablets and TVs, while sales of
trousers had declined.

 

The chain also said that Waitrose was now delivering about 170,000 weekly
food orders - up from 60,000 pre-lockdown - and the demand had risen since
its partnership with online grocer Ocado ended in August.

 

Having struggled to manage competition from online rivals and slower
consumer spending, the group has, however, recently announced plans to shut
stores.

 

In July, it said it would close eight John Lewis stores, in a move which put
1,300 jobs at risk. And this week it announced it would close four of its
Waitrose supermarkets, with the loss of 124 jobs.

 

It also recently said it was reviewing its famous "never knowingly
undersold" price pledge, which has been in place since 1925. The commitment
never applied to sales from internet-only retailers, which have lower costs
and often undercut the High Street on price.

 

Looking ahead, Dame Sharon said that the outlook for the second half was
"clearly uncertain", given the wider coronavirus crisis.

 

She also emphasised that the Christmas trading period would be "particularly
important to profits" for the group.

 

On Thursday, John Lewis also confirmed that it had opened its Christmas shop
early this year. Sales of Christmas trees and baubles were both "markedly"
up on last year, it said.--bbc

 

 

 

Ghana economy contracts for the first time in nearly four decades

(Reuters) - Ghana's economy contracted for the first time in almost four
decades in the second quarter, by an annual 3.2%, hit by the fallout of the
coronavirus pandemic, the statistics office said on Wednesday.

 

The gold-, oil-, and cocoa-producing West African nation imposed a
three-week lockdown at the start of the pandemic in March, leading to the
shutdown of numerous businesses, government statistician Samuel Kobina Annim
told a news conference.

 

"Even after the restrictions have been lifted, many businesses across
sectors have continued to close down," Kobina Annim said.

 

-nasdaq

 

 

 

Apple will launch its online store in India on September 23

Apple  will launch its online store in India on September 23, bringing a
range of services directly to customers in the world’s second largest
smartphone market for the first time in over 20 years since it began
operations in the country.

 

The company, which currently relies on third-party online and offline
retailers to sell its products in India, said its online store will offer
AppleCare+, which extends the warranty on its hardware products by up to two
years, as well as a trade-in program to let customers access discounts on
purchase of new iPhones by returning previous models. These programs were
previously not available in India. Customers will also be able to buy Macs
with custom configuration. 

 

“We know our users are relying on technology to stay connected, engage in
learning, and tap into their creativity, and by bringing the Apple Store
online to India, we are offering our customers the very best of Apple at
this important time,” said Deirdre O’Brien, Apple’s senior vice president of
Retail + People, in a statement.

 

TechCrunch reported in January that the iPhone-maker was planning to launch
its online store in India in Q3 this year. A month later, Apple CEO Tim Cook
confirmed the development, adding that Apple will also launch its first
physical store in the country next year.

 

On its website, Apple says it also plans to offer financing options to
customers in India, and students will receive additional discounts on Apple
products and accessories. Starting next month, it will also let customers
check out free online sessions on music and photography from professional
creatives. And if they wish, they can engrave emoji or text on their AirPods
in several Indian languages.

 

The launch of the online store will mark a new chapter in Apple’s business
in India, where about 99% of the market is commanded by Android
smartphones. The iPhone-maker has become visibly more aggressive in India in
recent years. In July, the company’s contract manufacturing partner
(Foxconn) began assembling the iPhone 11 in India. This was the first time
the company was locally assembling a current-generation iPhone model in the
country.

 

Assembling handsets in India enables smartphone vendors — including Apple —
to avoid roughly 20% import duty that the Indian government levies on
imported electronics products. Lowering the cost of its products is crucial
for Apple in India, which already sells several of its services including
Apple Music and TV+ at record-low price in the country.

 

The starting price of iPhone 11 Pro Max is $1,487 in India, compared to
$1,099 in the U.S. The AirPods Pro, which sells at $249 in the U.S., was
made available in India at $341 at the time of launch.techcrunch

 

 

 

 

CaixaBank and Bankia to merge, creating Spain’s largest bank

The boards of Spain’s CaixaBank and state-owned Bankia have approved a
merger plan between the two lenders, which will create the biggest bank in
the country by market share in retail operations.

 

The deal terms will see CaixaBank offer 0.6845 of its shares for every
Bankia share, according to a release published Friday. The newly created
lender, which will keep the CaixaBank brand, will have assets of more than
664 billion euros ($786.7 billion), the companies said.

 

The merger plan still needs to be approved at the General Shareholders’
Meetings of both companies and by the competition authorities. The banks
said they expect this process to be concluded during the first quarter of
2021.

 

“With this operation, we will become the leading Spanish bank at a time when
it is more necessary than ever to create entities with a significant size,
thus contributing to supporting the needs of families and companies, and to
reinforcing the strength of the financial system,” Bankia Executive Chairman
Jose Ignacio Goirigolzarri said in a statement.

 

Goirigolzarri will be the executive chairman of the new company, and current
CaixaBank CEO Gonzalo Gortázar will be the CEO.

 

European lenders have been under significant pressure in the wake of the
global financial crisis and the subsequent ultra-loose monetary policy. In
addition, the shock created by the coronavirus pandemic earlier this year
has exacerbated their issues and consolidation could be a solution to cut
costs and make the business more profitable.

 

“CaixaBank’s and Bankia’s solid equity position will provide the capacity to
absorb restructuring costs and valuation adjustments, with the combined
entity achieving a CET1 ratio of 11.6%,” the banks said in a statement. 

 

The closely-watched CET1 ratio is a measure of capital strength, introduced
following the global financial crisis. cnbc

 

 

 

China’s yuan is rallying sharply against the dollar — and analysts say
there’s room to run

SINGAPORE — The Chinese yuan strengthened sharply against the U.S. dollar
this week, following gains seen in recent months as the country’s economy
recovers and the greenback weakens.

 

The offshore yuan has jumped more than 1% since last Friday, from levels
above 6.83 to as much as 6.74 on Friday. The currency hit its strongest
level against the dollar since May 2019. The onshore yuan also gained more
than 1% over the same period. Overall, both the onshore and the offshore
yuan have spiked more than 5% against the greenback since May.

 

Analysts say recent strength in the yuan is due to a weakening dollar, which
has slumped significantly this year, as well as China’s economic recovery
after the worst of the coronavirus hit.

 

In fact, there’s more room for the currency to gain against the greenback,
they say.

 

“As the dollar has entered this dollar depreciation, this weaker dollar
environment, the (yuan) has somewhat lagged,” said JPMorgan Private Bank’s
Alex Wolf.

 

“When we’re looking at the (yuan), we actually haven’t seen a move up that
much until recently,” Wolf, head of investment strategy for Asia at the
firm, told CNBC’s “Squawk Box Asia” on Friday. He added that the Chinese
currency likely has “more catch-up to go.”

 

In a note on Thursday, research firm Capital Economics’ Julian
Evans-Pritchard pointed to China’s “rapid containment” of Covid-19, which
means it is now the “bright spot” in the global economy and will remain so
next year.

 

“Crucially for the renminbi, this strong economic recovery has partly been
due to a jump in net trade,” he wrote, referring to the yuan’s other name.
“The country’s exports have defied the slump in global growth thanks to
surging demand for face masks and other goods linked to COVID-19.”
Meanwhile, its import bill is being suppressed by lower commodity prices and
a slump in outbound tourism, Evans-Pritchard added.

 

As a result, he said the country is set to run the “largest annual current
account surplus relative to its GDP in a decade, and one of the largest ever
of any country relative to global GDP.”

 

That will over time lead to more yuan appreciation, unless there is official
intervention, Evans-Pritchard said. Typically, a strong surplus supports a
country’s currency because it means the nation is less dependent on foreign
currencies.

 

“With China on course for a more pronounced recovery than elsewhere, its
external position the strongest in a decade, and onshore yields unusually
attractive by global standards, there is still room for further gains,” he
concluded.

 

Evans-Pritchard called the record spreads between Chinese and U.S. treasury
yields the “most bullish signal” for the yuan.

 

While the Fed has cut rates and indicated they will stay near zero for
years, China’s central bank has reversed the bulk of the decline in
short-term rates, he said. That means that Chinese treasury yields would be
“far above yields in other major markets.”

 

That could draw investors to Chinese government bonds, leading to an inflow
into the yuan — hence boding well for the exchange rate.

 

All in, analysts are bullish on the yuan’s outlook in the near term.

 

On Thursday, Goldman Sachs told CNBC that it expects the yuan to strengthen
to 6.5 per dollar over the next 12 months.

 

Capital Economics predicts that the People’s Bank of China will allow the
currency to appreciate further as the economy recovers, and expects that the
currency will strengthen to 6.60 by year-end, and 6.30 by the end of
2021.-cnbc

 

 

 

 

Dollar set for weekly loss as economic confidence sags

TOKYO (Reuters) - The dollar held tight ranges on Friday but was set for a
weekly loss against major counterparts after downbeat data cast a shadow
over the economic outlook, while positive comments from New Zealand’s
finance minister helped prop up the kiwi.

 

The dollar =USD gave up gains made after the Federal Reserve upgraded its
2020 economic forecast this week to trade in negative territory on Thursday.
It was last quoted at 92.923 against a basket of major currencies, on track
for a 0.3% weekly loss.

 

U.S. data on Thursday showed jobless claims remained elevated at 860,000,
while housing starts and the Philadelphia Fed business index fell.

 

The Fed said on Wednesday it expected the U.S. economy to shrink by far less
than previously forecast in 2020 and promised to keep rates ultra-low for a
prolonged period.

 

The dollar was little changed against the yen at 104.81 JPY=, after hitting
a seven-week high at 104.52 on Thursday. For the week, the dollar fell more
than 1.2% against the Japanese currency, set for the biggest fall since
mid-June.

 

Against the euro, the yen hovered near the 1-1/2 month high of 123.29
touched overnight, changing hands at 124.18 EURJPY=.

 

“The dollar/yen dropped overnight almost too much, although it’s been
falling since Monday,” said Masafumi Yamamoto, chief currency strategist at
Mizuho Securities.

 

He said losses in U.S. stock futures NQc1EScv1 were also contributing to a
weaker dollar.

 

Markets held tight ranges in Asia although the New Zealand dollar hit a
two-week high of $0.6785 NZD=D3 after Finance Minister Grant Robertson
sounded positive about the economy's recovery prospects in television
interviews. Economic improvement may stave off the negative rates that all
four New Zealand banks are expecting to see in 2021. Adding to broader risk
aversion, U.S. stocks fell on Thursday as technology-related shares slid for
a second day, and as economic data weighed on the wider market.

 

“For the dollar to regain its upward trend, it’s necessary for the market to
make sure that the U.S. stocks take a pause from a correction in stock
prices,” Yamamoto said.

 

Sterling bought $1.2959 GDP=, having lost around one cent on Thursday after
the Bank of England said it was looking more closely at how it might
implement negative interest rates amid rising coronavirus infection cases,
higher unemployment and a possible new Brexit shock.

 

But the pound later erased losses after the Financial Times reported that
European Commission President Ursula Von der Leyen said she was convinced a
trade deal with Britain was still possible.

 

The euro, meanwhile, was little changed at 1.1849 per dollar on Friday EUR=.
The euro zone PMI data next week will be a key focus, with some analysts
saying a strong PMI could take the common currency back to the 1.19 level
versus the dollar.

 

The Australian dollar changed hands at $0.7310 AUD=D3, while the Swiss franc
was last quoted at 0.9086 against the greenback CHF=EBS.

 

The offshore yuan CNH=D3 was trading at 6.7521 per dollar after hitting a
high of 6.7332, set for an eighth straight week of gains.

 

The yuan has risen more than 6% from lows against the dollar in late May as
China’s economy recovered from the coronavirus crisis, although its rapid
rise has raised some concerns.

 

 

 

 

ByteDance plans TikTok IPO to win U.S. deal as deadline looms: sources

(Reuters) - China’s ByteDance is planning a U.S. initial public offering of
TikTok Global, the new company that will operate the popular short video
app, should its proposed deal be cleared by the U.S. government, people
familiar with the matter said on Thursday.

 

ByteDance is racing to clinch an agreement with the White House that will
stave off a U.S. ban on TikTok that President Donald Trump has threatened
could happen as early as next week.

 

Trump ordered ByteDance last month to divest TikTok amid U.S. concerns that
the personal data of as many as 100 million Americans who use the app could
be passed on to China’s Communist Party government.

 

On Wednesday, he reiterated he was opposed to ByteDance retaining majority
ownership of TikTok.

 

The White House and ByteDance have agreed to a term sheet on some aspects of
a deal, although Trump has not yet approved it, one of the sources said. Top
ByteDance U.S. investors, Oracle Corp and potentially Walmart Inc would hold
at least a 60% stake in TikTok’s U.S. operations, the source said.

 

White House Chief of Staff Mark Meadows said the situation was still fluid.

 

“There’s no definite proposal that the president’s being asked to consider
or reject at this point,” Meadows told reporters.

 

The new company, dubbed TikTok Global, will have a majority of American
directors, a U.S. chief executive and a security expert on the board, the
source added. Oracle has agreed to eventually own a 20% stake in the
company, according to the source. If Walmart also successfully negotiates
acquiring a stake, its CEO, Doug McMillon, would get a seat on TikTok
Global’s board, the source said.

 

Trump said that his administration talked with Walmart and Oracle on
Thursday but “nothing much has changed” regarding a deal.

 

He added, without giving details, “I guess Microsoft is still involved.”
Microsoft said on Sunday its offer for TikTok was rejected. Microsoft did
not immediately respond to a request for comment on Thursday.

 

“We’ll make a decision soon,” Trump said.

 

An IPO of TikTok would be one of the technology sector’s biggest-ever stock
market debuts, given that the app was recently valued by ByteDance investors
at more than $50 billion. It would further reduce ByteDance’s stake in the
company to appease U.S. officials who want to see the Chinese firm loosen
its grip on the video app.

 

The filing of the IPO would be on a U.S. stock exchange and could come in
about a year, the sources said.

 

 

There is no certainty over whether Trump will sign off on the agreement. It
was also not immediately clear what assets TikTok Global would own beyond
the app’s assets in the United States. ByteDance has offered to create
25,000 new U.S. jobs with TikTok headquartered in the United States as it
seeks to win Trump’s blessing for a deal, Reuters has reported.

 

It was also not clear whether ByteDance could present the deal to China as
keeping majority ownership of TikTok. Chinese officials have said they do
not want ByteDance to agree to a forced sale, and the company’s proposal to
the White House this week called for it to retain majority ownership of
TikTok.

 

The board of TikTok Global would include a national security director, who
will be approved by the U.S. and chair a security committee overseeing the
protection of user data, according to a person familiar with the matter.

 

The term sheet will grant Oracle the right to inspect TikTok’s source code
and includes numerous provisions to ensure data security and requirement
that all U.S. users data remains in the United States housed by Oracle, the
source said.

 

 

It is not clear what Oracle or Walmart will pay for a stake. Oracle, Walmart
and Treasury did not immediately comment.

 

Meadows said on Thursday that the administration is still looking at details
of the deal and whether it meets national security thresholds. Meadows said
if TikTok remains predominantly Chinese-run under the Oracle deal, that
would not meet Trump’s objectives.

 

CHINA APPROVAL

ByteDance said on Thursday it would need China to approve the proposed deal
with the White House, indicating how its bid to stave off a ban in the
United States could be further complicated.

 

As many as 40% of Americans back Trump’s threat to ban TikTok if it is not
sold to a U.S. buyer, a Reuters/Ipsos national poll found last month. Among
Republicans - Trump’s party - 69% said they supported the order, though only
32% expressed familiarity with the app.

 

The White House has stepped up efforts to purge what it deems “untrusted”
Chinese apps from U.S. digital networks. Beyond TikTok, Trump has also
issued an order prohibiting transactions with Tencent Holding Ltd’s
messenger app WeChat.

 

Earlier this year, Chinese gaming company Beijing Kunlun Tech Co Ltd sold
gay dating app Grindr, bought in 2016, for $620 million after CFIUS ordered
its divestment.

 

ByteDance acquired Shanghai-based video app Musical.ly - whose user base was
largely American - for $1 billion in 2017 without seeking CFIUS approval,
relaunching it as TikTok the following year. Reuters reported last year that
CFIUS was investigating TikTok.

 

 

 

 

Stocks rally but lacklustre without fresh stimulus

SINGAPORE (Reuters) - Asian stocks inched up on Friday but lingering
disappointment that central banks merely affirmed their monetary support
this week, while not promising new stimulus, kept a lid on gains.

 

Oil rose after OPEC flagged a crackdown on members that did not cut output,
and the dollar was back to the bottom of its recent range following its
brief journey higher after Wednesday’s Federal Reserve meeting.

 

The Fed promised to keep rates low for a long time, but gave no new hints
about any further monetary support.

 

Hints did come from the Bank of England and the Bank of Japan on Thursday,
but action was not forthcoming either.

 

U.S. stock futures wobbled either side of steady through the Asia session
and S&P 500 futures were last up 0.04% while Nasdaq 100 futures were up
0.5%. EuroSTOXX 50 futures were down 0.1% and FTSE Futures fell 0.2%.

 

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4% to head
for its first weekly gain in three weeks.

 

Japan’s Nikkei ended Friday down 0.2% for the week, while markets in South
Korea and Australia scraped small weekly gains.

 

The Shanghai Composite was the only market to make noteworthy gains, with
financials leading a 1.8% rise.

 

“The bigger picture issue is that markets, particularly growth and tech
stocks, have run very hard into the end of August, which has left them
somewhat vulnerable,” said AMP Capital chief economist Shane Oliver.

 

“There’s uncertainty ahead of the U.S. elections...China-U.S. tensions keep
creeping in and on top of that there’s now uncertainty about how the
recovery will proceed from here, in the absence of more stimulus in the
U.S.”

 

Data on Thursday showed the recovery in the U.S. labour market is stalling.
Consumer confidence data is due later on Friday.

 

“Directionless trading in most asset classes suggests fatigue in the risk
rally,” said strategist Terence Wu of Singapore’s OCBC Bank.

 

“The market will be craving for the next round of stimulus injection to
sustain the feel-good, risk-on factor...the question is when and under what
circumstances will the next injection arrive?”

 

YUAN, YEN STAND OUT

The currency market’s standout movers this week have been the yuan and yen,
notwithstanding volatile trade in sterling as it has been buffeted by Brexit
turmoil and the Bank of England saying it would consider negative interest
rates.

 

In afternoon trade in Asia, the yuan was up 1.2% for the week at 6.7514 per
dollar and on track for its longest weekly winning streak since early 2018
as bond inflows into China’s capital-controlled economy buoy the currency.

 

“We see no signals from the (People’s Bank of China’s) daily yuan fixing
that suggest authorities are concerned about recent trends,” said Nomura
analysts in a note.

 

“We remain short USD/CNH through both cash and options.”

 

The yen was also solidly bought leading into a long weekend in Japan.
Shrugging off a dovish-sounding Bank of Japan it is set for its best week
since January with a 1.3% gain and last sat just shy of a seven-week high at
104.81 per dollar.

 

In commodity markets, oil held sharp gains after OPEC and its allies said
the group will take action on members that are not complying with deep
output cuts. [O/R]

 

Brent crude futures were last 0.6% firmer at $43.55 a barrel and U.S. crude
futures rose 0.5% to $41.19 a barrel.

 

U.S. Treasuries picked up where they left off, with yields on 10-year U.S.
government debt at 0.6822% after concerns about possible inflation rises in
the future helped reverse a bond rally in overnight trade.

 

Later on Friday, U.S. consumer confidence data is due and Fed board member
James Bullard is to make a speech on the challenges of the COVID-19
recovery, both at 1400 GMT.

 

 

 

 

Ericsson to buy wireless networking firm Cradlepoint in $1.1 billion deal

STOCKHOLM (Reuters) - Ericsson ERICb.ST has agreed to buy U.S.-based
wireless networking company Cradlepoint in a $1.1 billion deal, the Swedish
telecoms gear maker said on Friday.

 

The deal, Ericsson’s largest in more than a decade, would give it access to
tools that can connect devices using Internet of Things over a 4G or a 5G
network.

 

The transaction, expected to close before the end of this year, will hurt
Ericsson’s operating margins by about 1% in 2021 and 2022, and contribute to
operating cash flow starting in 2022.

 

Ericsson said its 2022 group financial targets remained unchanged.

 

Cradlepoint, which will become a subsidiary of Ericsson, was founded in
2006, has more than 650 employees, and provides subscription-based wireless
networking software and hardware to businesses.

 

It had sales of 1.2 billion crowns ($137 million) in 2019, with a gross
margin of 61%.

 

 

 

 

Oil rises as Goldman predicts deficit, new storm builds in Gulf

TOKYO (Reuters) - Oil prices rose for a fourth straight day on Friday as
Goldman Sachs estimated the market is in deficit and a new storm started
building in the Gulf of Mexico, putting crude on track for a weekly gain of
about 10%.

 

 

Brent crude LCOc1 was up 27 cents, or 0.6%, at $43.57 a barrel by 0510 GMT,
while U.S. oil futures CLc1 gained 23 cents, or 0.6%, to $41.20 a barrel.

 

Both contracts dipped at the start of the day but have risen sharply this
week after Hurricane Sally cut U.S. production and OPEC and its allies laid
out steps to address market weakness.

 

Goldman Sachs said in a new report that recent storage on oil tankers of
crude for future delivery was “driven by transient inventory allocation
dynamics” rather than a rise in global stocks that would suggest the market
is oversupplied.

 

“We estimate that the oil market remains in deficit with speculative
positioning now at too low levels,” Goldman Sachs analysts said.

 

The investment bank predicted the market would be in a deficit of 3 million
barrels per day (bpd) by the fourth quarter and reiterated its target for
Brent to reach $49 by the end of the year and $65 by the third quarter of
next year.

 

Meanwhile, a tropical depression formed in the western part of the Gulf of
Mexico and could become a hurricane in the next few days, potentially
threatening more U.S. oil facilities.

 

The Saudi Arabian energy minister also fired a shot at traders warning them
not to bet against the oil market and pledging those who gamble on oil
prices would be hurt “like hell.”

 

Prince Abdulaziz bin Salman, OPEC’s most influential minister, made the
comments after a virtual meeting of a key panel of OPEC and allies, led by
Russia.

 

The Organization of the Petroleum Exporting Countries (OPEC) and other
producers, making up the so-called OPEC+ group, are cutting 7.7 million bpd
of output to support prices.

 

OPEC+ said on Thursday the group will take action on members that are not
complying with deep output cuts to support the market following a
coronavirus-led slump in fuel demand.

 

In the Gulf of Mexico, U.S. offshore drillers and exporters began a clearup
on Thursday after Hurricane Sally weakened to a depression and started
rebooting idle rigs following their closure for five days.

 

 

 

 

 

 

 

 

 

 

 


 


 


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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<mailto:info at bulls.co.zw> info at bulls.co.zw Tel: +263 4 2927658 Cell: +263 77
344 1674

 


 

 

 

 

 

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