Major International Business Headlines Brief::: 22 September 2020

[Bulls n Bears]

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Major International Business Headlines Brief::: 22 September 2020

 


 

 


 <mailto:info at bulls.co.zw> 

 


 

 


 

 

ü  Asian stock markets continue the global fallout

ü  GE: Industrial giant will stop building coal-fired power plants

ü  TikTok deal under new threat as Trump insists on total US control

ü  Covid: Pubs and restaurants in England to have 10pm closing times

ü  Fears of second lockdown wipe £50bn off UK stocks

ü  Airbus looks to the future with hydrogen planes

ü  Microsoft buys Fallout creator Bethesda for $7.5bn

ü  HSBC and StanChart sell-off worsens as virus concerns hit markets

ü  New data shows how much money domestic workers earn in South Africa

ü  South Africa is getting a new airline – and the founder wants you to name it

ü  How Africa’s largest economy can protect the future of its promising tech sector

ü  Company acquires Vodacom’s businesses in Nigeria, others

ü  Competition Tribunal Eases Merger Conditions For Telkom Kenya And Airtel

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 


Asian stock markets continue the global fallout

Stock markets in Asia suffered on Tuesday from the fallout from UK and US investors worried about a rise in coronavirus cases.

 

The biggest falls in the region were recorded in Australia, where shares hit a three-month low.

 

Investors have also been rattled by dimming hopes for more financial support for the US economy.

 

Stock markets fell across South Korea, Hong Kong and China, while Japan was closed for a public holiday.

 

On Monday, UK and US stock markets suffered heavy losses over fears that a renewed rise in coronavirus cases will blight economic prospects.

 

More than £50bn was wiped off UK shares, and caused similar falls across European and US stock markets.

 

The negative sentiment spread into Asia, which has previously been the focus of optimism from China's continued economic recovery.

 

Australian shares were dragged to their lowest level since mid-June, under pressure by its mining and energy stocks.

 

Major mining firms BHP Group and Rio Tinto both fell around 2%.

 

Multiple tensions

"The biggest issue for local markets is how the battle for tech sector super dominance plays out between the US and China, which is getting viewed through the lens of the ByteDance /Oracle -Walmart deal," said Stephen Innes, a market strategist at Sydney-based financial firm AxiCorp.

 

"Election risk is also coming to the fore with the first US election debate on the 29th, which is compounding things," he added.

 

In Europe, banking shares were affected by an extra set of concerns as allegations of money-laundering surfaced in leaked files.

 

HSBC, the bank at the centre of the scandal, saw its share price fall 5.3% in London, but the revelations dragged down the entire sector, with other big banks dropping by a similar amount.

 

HSBC's shares have hit a 25-year low and they continued to slide in Hong Kong on Tuesday falling another 3%.--bbc

 

 

GE: Industrial giant will stop building coal-fired power plants

In a dramatic reversal, one of the world's biggest makers of coal-fired power plants is to exit the market and focus on greener alternatives.

 

US industrial giant General Electric said it would shut or sell sites as it prioritised its renewable energy and power generation businesses.

 

It comes ahead of a US Presidential election in which the candidates hold starkly different views on coal.

 

NGO the Natural Resources Defense Council said the move was "about time".

 

GE has said in the past it would focus less on fossil fuels, reflecting the growing acceptance of cleaner energy sources in US power grids.

 

But just five years ago, it struck its biggest ever deal - paying almost £10bn for a business that produced coal-fuelled turbines.

 

'Attractive economics'

In a statement, the firm suggested the decision had been motivated by economics.

 

Russell Stokes, GE's senior vice president, said: "With the continued transformation of GE, we are focused on power generation businesses that have attractive economics and a growth trajectory.

 

"As we pursue this exit from the new build coal power market, we will continue to support our customers, helping them to keep their existing plants running in a cost-effective and efficient way with best-in-class technology and service expertise."

 

Could the coronavirus crisis finally finish off coal?

US President Donald Trump has championed "beautiful, clean coal" at a time when other developed countries are turning away from polluting fossil fuels.

 

In a bid to revive the struggling US industry, Mr Trump has rolled back Obama-era standards on coal emissions. But it has not stopped the decline as cheaper alternatives such as natural gas, solar and wind gain market share.

 

GE said it would continue to service existing coal power plants, but warned jobs could be lost as a result of its decision.

 

The firm is already cutting up to 13,000 job cuts at GE Aviation, which makes jet engines, due to the pandemic.

 

In a tweet, the Natural Resources Defense Council said: "Communities and organizers have been calling on GE to get out of coal for years. This is an important and long overdue step in the right direction to protect communities' health and the environment."—bbc

 

 

TikTok deal under new threat as Trump insists on total US control

President Donald Trump has cast fresh doubt over the future of TikTok in the US unless Oracle and Walmart have "total control" of the company.

TikTok escaped a US ban on Sunday, after striking a deal with the American companies.

 

China-based owner Bytedance earlier said it would retain an 80% stake in the new company, TikTok Global.

But President Trump said: "They will have nothing to do with it. And if they do, we just won't make the deal."

 

'Controlling interest'

He had threatened to ban the app on security grounds unless a sale was agreed with a US company by the middle of September.

The two main US investors, Oracle and Walmart, have said they will be taking a combined 20% stake in TikTok Global.

But Mr Trump, naming the two companies, said: "They are going to have total control of it.

 

"They are going to own the controlling interest.

"And then I guess they are going public and they are buying out the rest of it, they are buying out a lot.

"If we find that they don't have total control, then we are not going to approve the deal."

 

'False rumours'

Mr Trump had previously publicly given the proposed deal his blessing - but there have also been conflicting messages from the companies involved.

Oracle has confirmed its planned 20% bid with Walmart - but has also issued a statement from its executive vice-president, saying: "Americans will be the majority.

"And ByteDance will have no ownership in TikTok Global."

 

Bytedance, meanwhile, wrote on its Chinese language website it wanted to offer an "explanation of some false rumours".

As well as saying it would keep an 80% stake in TikTok Global, it said there was no plan to transfer ownership of the valuable algorithms that power TikTok.

 

It also said it had not heard about a $5bn (£4bn) contribution to a new education fund, requested by President Trump at a rally in North Carolina.

Mr Trump said at the weekend that he had asked the companies involved to put up the money "so we can educate people as to the real history of our country".

Why does Oracle's billionaire founder want TikTok?

 

Trump: Oracle's TikTok deal 'has my blessing'

TikTok said the $5bn figure was "a forecast of the corporate income tax and other operating taxes that TikTok will need to pay for its business development in the next few years" and said it had not been finalised.

 

It added, in a statement made on social media: "We would like to clarify that this is the first time that we have heard the news about a $5bn education fund".

"China has been determined to emphasise in recent months that the country still has full control of TikTok, amid nervousness at home over the company potentially being divested," said the BBC's China Media Analyst Kerry Allen.

 

"When Oracle agreed a deal with ByteDance last week so that TikTok could remain active in the States, Chinese media emphasised that the deal was "co-operative", with both parties playing an equal part, rather than Oracle bailing out the Chinese tech giant."

 

But China may yet decide that it does not approve of the deal, said Dr Richard Windsor, founder of research firm Radio Free Mobile.

That's because while Bytedance may retain TikTok's algorithm, it will still run on US Oracle's infrastructure.

 

"If one flips the deal on its head and imagines a situation where a world-leading piece of US software was going to be run on Chinese servers where a Chinese company had full access to it, one can start to see why China might object," he said.—bbc

 

 

 

Covid: Pubs and restaurants in England to have 10pm closing times

All pubs, bars, restaurants and other hospitality venues in England must have a 22:00 closing time from Thursday, to help curb the spread of coronavirus.

 

The sector will also be restricted by law to table service only.

 

The measures will be set out by the prime minister in the Commons before he addresses the nation in a live broadcast at 20:00 BST on Tuesday.

 

It comes as the UK's Covid-19 alert level moved to 4, meaning transmission is "high or rising exponentially".

 

Boris Johnson is also expected to stress the need for people to follow social distancing guidelines, wear face coverings and wash their hands regularly.

 

And, according to newspaper reports, he will urge people to work from home where it does not negatively impact businesses.

 

The government's chief scientific adviser Sir Patrick Vallance has warned there could be 50,000 new coronavirus cases a day by mid-October without further action - which, he said, could lead to more than 200 deaths per day by mid-November.

 

On Monday, a further 4,368 daily cases and 11 deaths were reported in the UK.

 

Further restrictions will also be announced in Scotland on Tuesday, while restrictions on households mixing indoors will be extended to all of Northern Ireland.

 

Also from 18:00 on Tuesday, four more counties in south Wales will face new measures, including a 23:00 curfew for pubs and bars.

 

What difference will it make?

People are understandably asking what difference closing at 22:00 makes. Coupled with the table service law, it will be little more than a marginal gain.

 

But what ministers hope is that the move, along with the rule of six, will act as a warning to the public that efforts to curb the virus need to be redoubled.

 

What remains to be seen is whether any other restrictions will accompany this move.

 

It seems inevitable that the virus will continue to spread - that's what respiratory viruses do during winter, especially one for which there is limited immunity and no vaccine.

 

But how quickly and widely - no one knows.

 

The risk of trying to suppress the virus is the government will soon find itself having to make another decision about further steps.

 

How far are ministers prepared to go? Every restriction that is taken has a negative consequence to society.

 

But the nature of the virus means lives will undoubtedly be lost the more it spreads. Balancing those two harms will define the next six months.

 

The cabinet will meet on Tuesday morning and Boris Johnson will also chair a Cobra emergency meeting - which will be attended by the first ministers of Scotland, Wales and Northern Ireland.

 

Speaking about the new closing times, a No 10 spokesperson said: "We know this won't be easy, but we must take further action to control the resurgence in cases of the virus and protect the NHS."

 

Tighter restrictions on pub and restaurant opening times are already in place in parts of north-east and north-west England, and Wales.

 

Liberal Democrat leader Sir Ed Davey described the new rules as "a step backwards", as he urged the government to fix the test and trace system and help the hospitality sector.

 

"After people have already been through so much hardship, we cannot allow thousands of jobs to disappear overnight," he said.

 

There were also calls for support from within the hospitality sector.

 

Kate Nicholls, chief executive of trade body UKHospitality, said the new rules should be "applied with flexibility", and that a 22:00 closing time was "bad for business and bad for controlling the virus".

 

She added: "Table service has been widely adopted in some parts of the sector since reopening, but it is not necessary across all businesses, such as coffee shops."

 

Meanwhile, Michael Kill, chief executive of the Night-Time Industries Association, warned the move would result in a "surge of unregulated events and house parties".

 

If Boris Johnson had decreed a year ago that he was going to call last orders on the pub at 22:00, the ravens might have left the Tower.

 

But given the terrible warnings from the government's top scientists on Monday, the kind of strict measures that ministers had been discussing - and the extent of restrictions that many people are already living with in some of our towns and cities - you might wonder if what the prime minister has ended up deciding is less stringent than it might have been.

 

As we have talked about many times, Downing Street is all too aware of the economic havoc the restrictions around the pandemic have caused.

 

Logically, therefore, it has always only wanted to take action when it has felt absolutely urgent. It is also the case that, as we enter a second surge, more is understood about the virus itself.

 

That means the government ought to be able to take a more sophisticated approach to managing the spread, rather than blunt, blunderbuss nationwide measures.

 

At least for now, the prime minister has concluded there is a narrow, but real chance to put the brakes on the outbreak before taking more draconian steps.

 

It comes as Christopher Snowdon, head of lifestyle economics at free-market think tank the Institute of Economic Affairs, said the latest restrictions seemed "to have emerged from a random policy generator" as he called on the government to publish the evidence upon which it was based.

 

"While mandatory table service has been part of the successful Swedish approach and may have merit, the new closing time will be devastating to a hospitality sector that was already suffering after the first lockdown," he said.

 

New measures will also come into force in Lancashire, Merseyside, parts of the Midlands and West Yorkshire from Tuesday.

 

Other areas of England, Scotland and Wales are already under local lockdown, with restrictions including a ban on mixing with other households.

 

The prime minister's announcement on closing times comes after a series of meetings over the weekend, including with the government's chief medical adviser Prof Chris Whitty, Chancellor Rishi Sunak and Health Secretary Matt Hancock.-bbc

 

 

 

Fears of second lockdown wipe £50bn off UK stocks

Fears that a renewed rise in coronavirus cases will blight economic prospects have wiped more than £50bn off UK shares, and caused similar falls across European and US stock markets.

 

London's FTSE 100 share index closed down 3.4%, with airlines, travel firms, hotel groups and pubs leading the rout.

 

Worst hit was British Airways owner IAG, down 12%.

 

Markets in Paris, Frankfurt and Madrid also dived, while the US Dow Jones index lost 1.8% after paring losses.

 

It comes amid fears that major economies could see second lockdowns as they struggle to regain control of the virus.

 

 

Banking shares were affected by an extra set of concerns as allegations of money-laundering surfaced in leaked secret files.

 

HSBC, the bank at the centre of the scandal, saw its share price fall 5.3% in London, but the revelations dragged down the entire sector, with other big banks dropping by a similar amount.

 

On Wall Street, JP Morgan Chase and Bank of New York Mellon saw their share prices fall 3% and 4% respectively in response to the reports.

 

 

The downward trend affected all but a handful of stocks on the UK's 100-share index. Only online delivery service Just Eat and supermarkets Tesco, Morrisons and Sainsbury's made it into positive territory.

 

The FTSE 250 index, seen as a better reflection of the health of the UK economy, closed nearly 4% lower.

 

One of its biggest fallers was pub and restaurant owner Mitchells & Butlers, which dropped more than 15% as concerns grow that the hospitality industry would have most to lose from a fresh lockdown.

 

The pound also lost ground against the dollar, falling 1% to $1.2790. It fell 0.4% against the euro to €1.0897.

 

Why does all this matter to me?

Many people are more affected by stock market falls than they might think.

 

There are millions of people with a pension - either private or through work - who will see their savings (in what is known as a defined contribution pension) invested by pension schemes. The value of their savings pot is influenced by the performance of these investments.

 

Pension savers mostly let experts choose where to invest this money to help it grow and a proportion will be in shares.

 

Widespread falls in share prices are likely to be bad news for these investments, although pension investors stress these are long-term investments and are designed to ride out bouts of weakness.

 

Why should I care if share prices fall?

There has certainly been an element of European unity on the markets today, with the FTSE 100 index in London, the Cac 40 in Paris, the Dax in Frankfurt and the Ibex in Madrid all suffering similar falls.

 

The reason behind the gloom seems pretty clear. With the number of Covid-19 cases multiplying rapidly here and in many European countries, there's a real prospect of new restrictions on daily life. In some regions - such as Madrid, for example - they're already in place.

 

The fear is that although these measures are unlikely to be as severe as the lockdowns in spring, they will nonetheless weigh on economic activity and could stifle the post-lockdown recovery.

 

Shares are down across the board, but inevitably, the companies which rely on people being able to get out and about and mingle are among the worst affected.

 

Airlines, tourism firms and hospitality businesses have already had a dreadful year - and investors know they can ill afford further setbacks.

 

'Bitter pill'

Coronavirus cases have been surging in many European countries, as governments strive to avoid another round of national lockdowns.

 

In the UK, top scientists are warning that the country is at a "critical point" in the pandemic and "heading in the wrong direction".

 

Prime Minister Boris Johnson is understood to be considering a two-week mini-lockdown in England - being referred to as a "circuit-breaker" - in an effort to stem widespread growth of the virus.

 

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: ''The FTSE 100 is worst hit among its European peers with a storm of pessimistic news swirling, affecting sectors across the board."

 

She added that concerns for the travel industry had had a "domino effect", with aircraft engine manufacturer Rolls Royce hit, as investors saw no end to the falling demand for new planes.

 

At the same time, the prospect of evening coronavirus curfews, after a summer of recovering sales, was "a bitter pill to swallow" for the hospitality industry,

 

If you add the prospect of a no-deal Brexit into the murky mix, there is little surprise so many investors seem to have caught a severe case of the jitters today.''-bbc

 

 

 

Airbus looks to the future with hydrogen planes

Aerospace giant Airbus has unveiled plans for what it hailed as the first commercial zero-emission aircraft.

 

It said its hydrogen-fuelled passenger planes could be in service by 2035.

 

Airbus chief executive Guillaume Faury said the three ZEROe concept designs marked "a historic moment" for commercial aviation sector".

 

The use of hydrogen had "the potential to significantly reduce aviation's climate impact", he added.

 

However, analysts point out that it is not the first time that hydrogen has been touted as the saviour of modern air travel.

 

The history of the fuel in aviation goes back to the days of airships in the early 20th Century, but the Hindenburg disaster in 1937 brought that era to an end.

 

More recently, from 2000 to 2002, Airbus was involved in the EU-funded Cryoplane project, which studied the feasibility of a liquid hydrogen-fuelled aircraft.

 

After that, the idea fell out of favour again - until now.

 

'Decisive action'

Unveiling its latest blueprints, Airbus said its turbofan design could carry up to 200 passengers more than 2,000 miles, while a turboprop concept would have a 50% lower capacity and range.

 

A third, "blended-wing body" aircraft was the most eye-catching of the three designs.

 

All three planes would be powered by gas-turbine engines modified to burn liquid hydrogen, and through hydrogen fuel cells to create electrical power.

 

However, Airbus admitted that for the idea to work, airports would have to invest large sums of money in refuelling infrastructure.

 

"The transition to hydrogen, as the primary power source for these concept planes, will require decisive action from the entire aviation ecosystem," said Mr Faury.

 

"Together with the support from government and industrial partners, we can rise up to this challenge to scale up renewable energy and hydrogen for the sustainable future of the aviation industry."

 

The new Airbus designs are the fruit of a joint research project that Airbus launched with EasyJet last year to consider hybrid and electric aircraft.

 

The airline's chief executive, Johan Lundgren, said: "EasyJet remains absolutely committed to more sustainable flying and we know that technology is where the answer lies for the industry." --bbc

 

 

 

Microsoft buys Fallout creator Bethesda for $7.5bn

Xbox-owner Microsoft has acquired the games company behind blockbuster titles including Doom, Fallout, Skyrim and Wolfenstein.

 

It is paying $7.5bn (£5.85bn) for Bethesda's parent ZeniMax Media.

 

Xbox has said that the publisher's franchises would be added to its Game Pass subscription package for consoles and PCs.

 

This could help make the forthcoming Xbox Series X more attractive than the PlayStation 5 to some players.

 

Both machines are due to launch in November.

 

Game Pass already gives players access to more than 200 games. Microsoft includes first-party titles at point of launch to those signed up to its "ultimate" package without further cost.

 

By contrast, Sony has opted to charge players up to £70 for its own major releases and does not intend to include new titles in its PlayStation Plus Collection service.

 

It is not yet clear how the takeover affects Bethesda's plans to create The Elder Scrolls 6, Starfield and other unfinished games as cross-platform titles.

 

In a statement, Xbox chief Phil Spencer said the two firms "shared similar visions for the opportunities for creators and their games to reach more players in more ways".

 

Pete Hynes, senior vice president at Bethesda Softworks, said the deal offered "access to resources that will make us a better publisher and developer".

 

"We're still working on the same games we were yesterday, made by the same studios we've worked with for years, and those games will be published by us," he wrote in a blog.

 

In addition to the games titles, Microsoft will now also own the id Tech games engine, developed by Bethesda's sister firm id Software.

 

Doom Eternal, which was released this year and received praise for the quality of its graphics, was built using the most recent version of id Tech.

 

Piers Harding-Rolls, research director from Ampere Analysis, described the deal as "a major coup".

 

"Microsoft has often been criticised for its lack of heavy-hitting first-party games franchises when compared to Sony and Nintendo. This deal catapults Microsoft's games portfolio into a much stronger position," he told the BBC.

 

Legendary games developer John Carmack - who pioneered some of the technologies behind the original Doom, Wolfenstein and Quake games - has also suggested the acquisition could bring him back to some of those franchises.

 

Until recently, he had served as the chief technology officer of Facebook's Oculus virtual reality division.

 

His return would build further excitement for future Xbox games, and thus benefit the brand.-bbc

 

 

 

 

HSBC and StanChart sell-off worsens as virus concerns hit markets

A sell-off in shares of HSBC and Standard Chartered deepened as concerns that new waves of coronavirus could stall a global economic recovery hit stocks across Asia-Pacific.

 

Hong Kong-listed shares in HSBC fell 2.9 per cent while those in Standard Chartered were off 2 per cent, taking losses for each of the Asia-focused lenders to more than 8 per cent over two days. The pair were among those named in media reports on Monday that alleged international banks had flagged $2tn in suspicious transfers to US anti-money laundering authorities.

 

HSBC’s Hong Kong-listed stock has more than halved this year, falling to lows not seen since prior to the city’s transition from UK to Chinese rule in 1997, as Covid-19, falling interest rates and tensions between the US and China have hit its business.

 

Over the weekend, Chinese state-run tabloid the Global Times said the London-headquartered bank was a candidate for inclusion in Beijing’s first “unreliable entities” list. The as-yet unreleased list is set to target companies deemed to have harmed Beijing’s interests.

 

Hong Kong’s benchmark Hang Seng index was down 0.4 per cent, while China’s CSI 300 of Shanghai- and Shenzhen-listed shares edged down 0.1 per cent on Tuesday. Australia’s S&P/ASX 200 dropped 0.5 per cent. Markets in Japan were closed for a public holiday.

 

The losses in Asia followed a rough session on Wall Street in which the S&P 500 shed 1.2 per cent on worries over the outlook for a global economic recovery. That came on the heels of a 3.4 per cent loss for London’s FTSE 100.

 

Futures tipped the S&P 500 to fall 0.2 per cent when US markets begin trading later on Tuesday. The FTSE 100 was expected to drop 0.3 per cent.

 

Markets were “far from confident” in the US Federal Reserve’s ability to generate 2 per cent inflation, said Robert Rennie, head of global market strategy at Westpac. He added that “multiple political flashpoints” in the US, including a fight over a new Supreme Court nomination, had lowered the odds of more fiscal stimulus ahead of November’s presidential election.

 

Jay Powell, the Fed chair, will tell Congress on Tuesday that businesses hit by the coronavirus pandemic may need “direct fiscal support” as lawmakers in Washington struggle to agree on a stimulus package.

 

Mr Rennie said investors were also becoming nervous about a week-long holiday in China that begins on October 1 and its impact on global commodities demand. Markets are showing “signs of softening within a number of key commodities”, he added.

 

Oil prices steadied in Asian trading on Tuesday, following a sell-off a day earlier prompted by concerns over the outlook for global demand. Brent crude, the international benchmark, rose 0.1 per cent to $41.48 a barrel.-ft

 

 

 

New data shows how much money domestic workers earn in South Africa

SweepSouth, a digital-booking cleaning service, has published a new report showing how much domestic workers in South Africa earn right now.

 

The report is compiled from almost 5,000 responses, overwhelmingly from women (97%) with an even split between South Africans (48%) and Zimbabweans (49%).

 

The data shows not only a dramatic drop in earnings due to the pandemic, but a continued trend prior to the lockdown of domestic workers not earning enough to cover their most basic needs, the group said.

 

While most workers were earning greater than R2,500 (63%) before lockdown, only a small minority (14%) were earning above R4,000 which is generally considered to be a living wage.

 

“The establishment of a national minimum wage was a notable achievement, but it is clear that this is becoming increasingly inadequate to cover even the bare minimum of household expenditure. This has forced many families to take on debt which often spirals out of control.

 

“With the onset of the Covid-19 pandemic and subsequent lockdown, the majority of workers fell below the R2,500 threshold (74%). Given that their costs have shown no sign of decreasing, this has placed phenomenal pressure on already struggling households.”

 

The poll data shows that:

 

The average SweepSouth  domestic worker earns R3,359

The average non-SweepSouth domestic worker earns R2,814

Minimum wage is R2,740 (R15 an hour).

 

 

SweepSouth pointed to a significant rise in  ‘underemployment’. In 2019, 73% of respondents worked less than 8 hours a day. This has increased to 80% in 2020.

 

This may show a tendency of middle-class households to reduce work hours to increase affordability, however a reduced duration has very little impact on the fixed costs a worker incurs to perform their job on a given day.

 

The rising cost of living 

 

While an increasing number of domestic workers are facing unemployment and stagnant wages, SweepSouth’s data shows a sharp rise (44%) in the cost of living for domestic workers during the Covid-19 pandemic when compared to 2019.

 

This is in sharp contrast to the annual consumer price inflation figures reported by Stats SA for June 2020 of 2.2%, the group said.

 

The Pietermaritzburg Economic Justice & Dignity Group’s (PEJD) Household Affordability Index found a significantly larger rise in core expenses of 7.8% in July 2020, but this still falls short of this report’s findings.

 

 

Total average monthly basic expenses stood at R4,225 per month (34% 2019: R3,137 per month). This is slightly lower than the the expected R4,423 to cover basic necessities for a household of 4 as reported in the PEJD Household Affordability Index.

 

“Bucking the annual trend of inflation are data and airtime expenses. The decrease in data costs is likely related to increased government regulation in the sector following a December 2019 Competition Commission ruling.

 

“This shows the significant power government has to reduce costs for the poor and working class,” SweepSouth said.-businesstech

 

 

 

South Africa is getting a new airline – and the founder wants you to name it

Kulula-founder Gidon Novick will launch a new airline later in 2020 and has invited South Africans to name the new carrier.

 

The airline, which has drawn inspiration from Uber, is a partnership between Novick and Global Aviation, a leading operator of Airbus A320 aircraft. The airline’s first flight between Johannesburg and Cape Town, the 12th busiest route in the world, is planned for December 2020.

 

“The pandemic has created a unique opportunity to start an airline that is not only dramatically more efficient but also inventive and creative by tapping into the unique talent that our country offers,” said Novick.

 

He added founding team combines industry experience with fresh thinkers from the technology and hospitality sectors.

 

“Similar to the way Uber has transformed the point-to-point mobility, there is a huge opportunity for the airline industry to rethink its relationship with passengers and be more ‘customer obsessed’.

 

“This can be achieved by bringing together industry experts, technology and a fresh perspective and strategic approaches from other sectors.” says Jonathan Ayache, an ex-Uber Africa executive who is also involved in the project.

 

Like Uber 

 

Novick told MyBroadband that he is upbeat about the opportunity which the pandemic brings to re-look at traditional business models and find how things can be done differently.

 

He said the pandemic has created the prospect of affordably acquiring the key inputs to start an airline – aircraft, facilities, and skilled employees. A key focus for Novick is on efficiency and cutting costs, which include leasing aircraft at dramatically reduced rates.

 

He added that there are high-quality maintenance facilities available which are far cheaper than what they were a few months ago. Through experience he found that airlines get less efficient the larger they get, so starting off small gives a new airline a big advantage.

 

Another focus for Novick is flexibility. “With the market uncertainty, a flexible model which can adjust to market demand is critical,” he said.

 

He told MyBroadband technology will play a very important role to increase efficiency. “Technology has the ability to facilitate a seamless, efficient, and engaging relationship with our future customers,” Novick said.

 

The new airline will be fully funded through private capital with no debt. He said his business experience showed him the incredible damage debt can do to a business, especially in a volatile industry like air travel.

 

“Staying away from debt is absolutely key to the success of launching a new low-cost airline,” he said. To keep costs down they will launch with used aircraft which are either purchased outright or leased.

 

These will mainly be narrow-body, single-aisle aircraft with around 180 seats, like the Boeing 737 or Airbus A320. He explained local airfares are much lower than in many developed countries which require a local airline to adjust their business model. This includes using older aircraft.

 

Naming the new airline 

 

Novick has invited all South Africans ‘to put their creativity to the test’ and suggest a name for the new carrier.

 

Without being too prescriptive the new team are looking for a name that is unique, aspirational, and cool. Ideally it should be easy to say and memorable.

 

Entries can be posted on the website brandnewairline.co.za and the winner will be announced within the next two weeks. Novick said that the person who names the airline will win a year’s free travel pass.businesstech

 

 

 

How Africa’s largest economy can protect the future of its promising tech sector

About 21.7 million Nigerians are unemployed—it’s a figure that is higher than the population in 35 of Africa’s 54 countries. That number will likely rise given Nigeria has also just suffered its worst quarterly economic contraction in over a decade due to the Covid-19 pandemic.

 

The lingering slump in the global oil trade has proven particularly costly, and dashes any hopes of a quick economic turnaround.

 

To its credit, Nigeria’s government has pushed social intervention programs amid pandemic, from cash relief for its poor to a $126 million credit facility for small and medium businesses. But so far, those plans have left out a promising, fast-growing business sector: tech startups.

 

 

Last year alone, Nigerian startups received nearly half of the total startup funding in Africa but with the record-breaking pace of investment inflows forecast to slow, coupled with the current negative macroeconomic factors, local startups are increasingly in need of tailored support.

 

In a new white paper Endeavor, the global entrepreneurship network, proposes what those government support programs should be, starting with a $50 million credit facility that allows startups access 75% of their six-month runway costs at a 5% interest rate. (Nigeria’s average lending rate in 2019 was over 15%, based on IMF data.)

 

The goal of the facility, the paper recommends, should be to keep startups afloat amid dire circumstances: a survey by the UK-Nigeria Tech Hub in May showed that 79% of local startups had less than six months of cash runway. Endeavor also recommends provisions for partial debt forgiveness if the funds are applied to employee salaries to slow the job churn that’s taking hold in the industry. Even larger, established startups like Jumia, IrokoTV, and Andela have jointly laid off hundreds of staff to manage costs in recent months.

 

 

As such, any funds should be applied to “protecting jobs and preserving capacity” of local startups, says Eloho Omame, managing director for Endeavor’s Nigeria division.

 

 

But the government could also look to make good on promises of an investment fund for startups in the long-term. Rather than disburse them through a government agency or organization however, Endeavor recommends investing the funds “in the most efficient way” through experienced local venture capital firms.

 

 

So far, in the absence of targeted government support, help is coming from within the ecosystem as venture capital firms are collaborating to offer equity-free, emergency grants as cash lifelines to local startups. Ultimately however, the onus will be on the government to live up to its promises of boosting its $2 billion tech ecosystem, Omame says. “If this segment is strategically important, then we cannot afford to move as nonchalantly as we seem to be.”qz.com

 

 

 

Company acquires Vodacom’s businesses in Nigeria, others

Artificial intelligence service provider, inq. Holdings Limited, has acquired Vodacom Business Africa’s operations in Nigeria, Zambia and Cote d’Ivoire. It plans further acquisition in Cameroon subject to regulatory approvals.

 

Managing Director, inq. Holdings Limited, Mr. Valentine Chime said the 100 per cent acquisition of the Vodacom Business Africa’s operations in the three countries was in pursuit of the company’s dream of building pan-African network that will help in creating better future through digital solutions.

 

Domiciled in Mauritius, inq. Holdings Limited is a subsidiary of Convergence Partners Communications Infrastructure Fund, a fund dedicated solely to communications infrastructure and related services and technologies across Sub-Saharan Africa (SSA).

 

Formerly known as Synergy Communications, the latest acquisition has grown inq.’s regional footprint with operations in 12 cities in seven countries across Africa. It has existing operations in Botswana, Malawi and South Africa with an additional investment in Mozambique.

 

“Under the inq. banner the company will embark on the next phase of building a unified Pan-African cloud and digital service provider, bringing to market a very relevant suite of next generation technology solutions in the fields of Edge AI, SD-WAN/NFV and Cloud,”Chime said.

 

According to him, with operations in major African cities of Lagos, Abuja, Port Harcourt, Kano, Gaborone, Lusaka, Ndola, Blantyre, Lilongwe, Mzuzu, Abidjan and Johannesburg, the inq. team prides itself on global best practice methodologies customised to local customs in each of the 16 cities, covering different sectors including banking, oil and gas, fast moving consumer goods, mining, health, real estate, information technologies, public sector and logistics.

 

“Covid-19 has accelerated digital transformation, and inq. is perfectly positioned to deliver intelligent connectivity through seamless delivery of cloud and digital services and  technologies to our clients. We are about simpler, seamless solutions,” Chime said.-thenationonlineng

 

 

 

Competition Tribunal Eases Merger Conditions For Telkom Kenya And Airtel

For the first time in Kenya, the Competition Tribunal has made a ruling which reversed or amended merger conditions that had been imposed by the Competition Authority of Kenya as part of its approval to a transaction, in an application filed by Anjarwalla and Khanna (A&K) on behalf of Telkom Kenya and Airtel.

 

In October 2019, the Authority conditionally approved a merger application submitted by Telkom and Airtel, imposing various conditions, including a requirement for the spectrum in the 900MHz and 1800MHz acquired by the merged business from Telkom to revert back to the Government of Kenya; a blanket prohibition from selling or transferring any of the parties operating licences and spectrum licenses; and a blanket prohibition for the merged entity from entering into any form of sale agreement within the next five years, which would have had the effect of restricting the merged business from even selling shares to raise further capital or any commercial sale of normal assets in the ordinary course of business.

 

Following a merger review application filed before the Tribunal by A&K on behalf of the parties, Telkom and Airtel successfully challenged 6 out of 7 conditions, with the Tribunal finding it necessary to either overturn or amend 6 of the conditions that had been imposed by the Authority.

 

The Tribunal ruled that the Authority's conditions relating to spectrum and licenses did not address any competition law concerns and were an unreasonable and unjustified curtailment of the merged entity's right to property. The Tribunal also held that instead of a blanket ban against entering into any form of sale agreement, the merged entity could dispose up to 40 percent of its shareholding at any time during a five year period. Further, the ruling upheld that the merged entity was not to be restricted from disposing of its assets and shares in the ordinary course of business.

 

This is an important decision in many respects and marks the first merger review application ever filed before the Tribunal against a decision of the Authority since its establishment, and the decision has already attracted significant attention. Click here to read more about the landmark ruling from recent press coverage.

 

A&K is honoured to have acted for the applicants in this matter.-mondaq

 

 

 

 

 

 


 


 


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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