Major International Business Headlines Brief::: 23 September 2020

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Major International Business Headlines Brief::: 23 September 2020

 


 

 


 <mailto:info at bulls.co.zw> 

 


 

 


 

 

ü  Bank of England boss calls for furlough 'rethink'

ü  Whitbread to cut 6,000 jobs as hotel demand slumps

ü  Could churches double up as bank branches in cash-stricken areas?

ü  Musk: Cheaper Tesla ready 'in about three years'

ü  Nike expects permanent shift to online sales

ü  Kingfisher to hand back £23m of UK furlough cash

ü  Microsoft And Shell Announce New Partnership To Use Artificial
Intelligence And Tech To Reduce Carbon Emissions

ü  $5 billion fintech firm TransferWise posts fourth straight year of
profitability

ü  Angola negotiates $6.2 billion debt relief from creditors: IMF

ü  Ghana plans $500 million London listing of gold royalty fund: sources

ü  Gold miners insist they won’t splurge despite price surge

ü  Asian stocks struggle as investors focus on U.S. dollar

ü  Citi closes market making business in retail options: FT

ü  KKR to invest $755 million in retail arm of Reliance

ü  Amazon launches climate-friendly program to help shop for sustainable
products

ü  A little help from our friends: banks team up as FX trading gets tougher

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 


Bank of England boss calls for furlough 'rethink'

The governor of the Bank of England has called for the government to "stop
and rethink" the furlough scheme.

 

The Job Retention Scheme is due to finish at the end of next month.

 

But speaking on a webinar hosted by the British Chambers of Commerce, Andrew
Bailey suggested specific sectors may benefit from further help.

 

There are fears unemployment could spike when the furlough scheme ends, as
firms struggle to retain workers.

 

In August, Mr Bailey told the BBC he backed ending the scheme, saying
workers should be helped to move on rather than stay in unproductive jobs.

 

Whitbread to cut 6,000 jobs as hotel demand slumps

But on Tuesday, he suggested he was now open-minded about further
intervention.

 

He said the furlough scheme "has been successful" and that he supported the
chancellor's decisions, not wanting to "tie his hands".

 

But he added: "We have moved from a world of generalised employment
protections, to specific and focused areas."

 

Mr Bailey noted that at the peak of the crisis, about 30% of private sector
employers were using the furlough scheme, but it was now used most heavily
by industries such as hospitality, retail and culture.

 

"[Furlough] has helped manage the shock, to firms and to labour [but now]
the use of it, as far as we can tell, is more concentrated," he said.

 

"I think it is therefore sensible to stop and rethink the approach going
forward, without any commitment to what that might be."

 

Earlier in the day, Whitbread, which owns Premier Inn and Beefeater,
announced plans to cut 6,000 staff just days after the furlough scheme is
due to end in October. Meanwhile, Wetherspoon said it would shed up to 450
workers at pubs in airports.

 

And Mr Bailey's comments were made just hours before the Prime Minister
Boris Johnson took to his feet in the Commons to reinstate guidance that
office workers stay at home and confirm that pubs and restaurants will be
forced to close at 22:00 from Thursday.

 

UK Hospitality said the move was "effectively a lockdown" for city centre
bars and restaurants.

 

"This is a huge, huge blow to hospitality and it will be potentially fatal
for many businesses," it said.

 

Mr Bailey's comments echo the opinion of Labour leader Sir Keir Starmer, who
has called on the government not to remove all support in one go.--bbc

 

 

 

 

Whitbread to cut 6,000 jobs as hotel demand slumps

Whitbread, which owns Premier Inn and Beefeater, has warned that 6,000 staff
could lose their jobs.

 

The company blamed the cuts on a slump in hotel guest numbers since
lockdown.

 

It comes as the government's furlough scheme, which still pays 27,000
Whitbread staff, ends next month.

 

Meanwhile, pub chain JD Wetherspoon has warned its 1,000 staff who work at
airport venues that almost half of them could lose their jobs because of the
dramatic fall in travel and tourism.

 

The company told staff that up to 450 people working at pubs in Gatwick,
Heathrow, Stansted, Birmingham, Edinburgh and Glasgow airports could be made
redundant."The decision is mainly a result of a downturn in trade in these
pubs, linked with the large reduction in passenger numbers using the
airports," said Wetherspoon's chief executive John Hutson, who added that
"no firm decisions have been made".

 

Eat Out to Help Out

The reduction in travellers and those sharing a meal out has also hurt
Whitbread. It said hotel stays in August had halved and diner numbers fell
by more than a third, though said it had been helped by the Eat Out to Help
Out scheme.

 

The company could also be affected by new rules forcing restaurants to shut
at 22:00. From Thursday, hospitality venues will have to close earlier to
help curb the spread of the coronavirus.

 

Added to this, Cabinet Office Minister Michael Gove has told people in
England to now work from home "if they can" - a move that trade body UK
Hospitality said was "effectively a lockdown" for city centre bars and
restaurants.

 

"This is a huge, huge blow to hospitality and it will be potentially fatal
for many businesses," it said.

 

Whitbread said it expected demand to remain lower across the business well
into 2021 and possibly even 2022.

 

'Difficult decisions'

Whitbread boss Alison Brittain said the company was hoping to avoid
compulsory redundancies.

 

She said: "With demand for travel remaining subdued, we are now having to
make some very difficult decisions, and it is with great regret that today
we are announcing our intention to enter into a consultation process that
could result in up to 6,000 redundancies in the UK, of which it is hoped
that a significant proportion can be achieved voluntarily."

 

Around three quarters of Whitbread's 35,000 staff are still paid in part
through the government's furlough scheme.

 

That scheme, called officially the Coronavirus Job Retention Scheme (CJRS)
was introduced in March. It paid 80% of the wages of workers placed on
leave, up to a maximum of £2,500 a month.

 

Since July, furloughed workers have been able to return to work part-time
with the government paying for any remaining hours not worked.

 

A further change was brought in at the beginning of this month when
employers were asked to pay 10% of the wages of those on furlough, plus
their National Insurance and pension contributions.

 

In October, the government will pay 60% of wages up to a cap of £1,875. The
employers' share of the bill will then go up to 20% of wages.

 

And the scheme will cease altogether at the end of next month, shortly
before the Whitbread's 45-day consultation period will be completed for
workers put on notice of redundancy.

 

The firm said it had taken the decision in the face of subdued demand,
noting that it would stop receiving help with staff wages at the end of next
month.

 

Whitbread said it had lost more than three quarters of its sales in the
first half the year when hotels and restaurants were forced to close because
of the virus.

 

Sales in hotels were 78% lower in the first half of the year, compared to
2019, while food and drink sales were down by 77%.

 

"The Premier Inn owner has had one of the toughest first halves out there,"
said Hargreaves Lansdown analyst Emilie Stevens.

 

She said the proposed job losses were a sign that coronavirus had "changed
Whitbread's world for good".

 

"Without full hotels the group isn't profitable, so a lower and more
flexible cost base is essential," she said.

 

'Short-lived boost'

Since reopening, Whitbread said demand for hotel rooms had been "strong" in
tourist hotspots but London and other metropolitan areas had been less
popular.

 

But Ms Stevens said: "Unfortunately this boost is likely to be short-lived
and focus now turns to business travel."

 

"We know city demand remains subdued and with more and more businesses
announcing permanent work from home plans, we wonder if the return of
business travellers is more 'if' than 'when'."

 

The expected job losses, which account for around a fifth of Whitbread's
workforce, follow cuts to the company's head office staff, which affected
around 150 people.

 

Whitbread is not the first hospitality business that has been forced to lay
off staff because to the pandemic. In June, The Restaurant Group - which
owns Frankie and Benny's - announced plans to cut up to 3,000 workers, while
Upper Crust-owner SSP has said that up to 5,000 could be let go and Pizza
Express warned 1,100 people could lose their jobs.

 

Last month, hotel group LGH - which manages 55 properties, including some
Crowne Plaza, Holiday Inn and Hallmark hotels - said that around 1,500 staff
were at risk of redundancy.

 

By late morning trading, shares in Whitbread had lost around 2% of their
value.—bbc

 

 

 

Could churches double up as bank branches in cash-stricken areas?

A financial hub in a Methodist church and drop-and-go deposit points for
small firms are among ideas being tested in cash-stricken communities.

 

Local people will also have access to cashback from convenience stores -
even if they do no shopping.

 

Eight trials have been confirmed as part of a project to help solve problems
with access to cash.

 

The closure of bank branches and cash machines has led to losses for local
firms and has concerned consumers.

 

The plan for trials was drawn up in light of a major report warning that the
country is "sleepwalking" into becoming a cashless society.

 

It concluded that eight million people in the UK rely on notes and coins,
ranging from those without a bank account to people who are not comfortable
with digital payments.

 

The eight trial areas, including remote communities such as the village of
Botton, North Yorkshire, will test a range of ideas including pop-up Post
Offices in small shops, and banking hubs in retail spaces.

 

Fifteen shops in four areas will trial the purchase-free cashback plan.
Retailers will be remunerated for providing the service by payment services
company PayPoint.

 

Coronavirus 'will hasten the decline of cash'

A new rural bank branch opening! What's going on?

"It is critical that we find ways to protect the viability of cash, for
consumers and communities alike," said Natalie Ceeney, who wrote the access
to cash report and is overseeing the projects. 

 

"These pilots are designed to find sustainable ways to keep cash viable
locally, which, if successful, can then be rolled out more widely."

 

Reports on the progress, or otherwise, of the projects will be published in
summer next year.

 

Ms Ceeney said that access to cash machines was not the only answer,
particularly for businesses that needed to quickly deposit their takings.
She said firm shouldn't have to shut their doors during the day to drive to
the nearest bank miles away in another town.

 

Not long ago there were two banks with branches in Ampthill. Then there was
one. Now there is none. Currently just one cash machine is left to serve a
population of more than 8,000.

 

Resident Brandon Wilson, 20, told the BBC in June that using cash helped him
stick more rigidly to his spending plans to ensure he did not spend beyond
his means.

 

"In general I try and budget my daily routine and having the physical money
there means it is harder to spend than just placing a piece of card on to a
machine," he said.

 

The town where 8,000 people share a cash machine

Other project areas chosen for the trials include the remote Lulworth Camp,
a military barracks in Dorset miles away from the nearest cash machine.

 

Small towns with thousands of residents which have seen bank branches or
cash dispensers disappear are also included, such as Ampthill, along with
Rochford, in Essex, Denny near Falkirk, and Cambuslang in Lanarkshire.

 

Burslem, in Staffordshire, is also on the list, as is Hay-on-Wye, which has
a large number of bookshops and other small businesses but no bank branch to
deposit notes and coins.

 

Millisle, in Northern Ireland, has recently been added as the eighth area to
take part in the pilots.

 

Eric Leenders, from UK Finance, which represents the UK banks, said the
sector was committed to access to cash remaining "free and widely accessible
to those who need it".

 

Martin McTague, from the Federation of Small Businesses, said: "While
contactless undoubtedly marks the safest way to pay in the current climate,
we have to ensure that coronavirus doesn't cause us to sleepwalk into a
cashless society we're not ready for yet."--bbc

 

 

 

 

Musk: Cheaper Tesla ready 'in about three years'

Tesla founder Elon Musk has announced technology that he says will make
Tesla batteries cheaper and more powerful.

At a live presentation that Mr Musk labelled 'Battery Day' he also teased
the possibility of a $25,000 (£19,600), fully-autonomous Tesla "in about
three years time".

"This has always been our dream to make an affordable electric car," he
said.

 

But the news didn't excite investors and $50bn was wiped off its stock
market value.

The main announcement was Tesla's new larger cylindrical cells. It was
claimed the new batteries will provide five times more energy, six times
more power and 16% greater driving range.

 

But the technology announced is likely to take years to implement.

Tesla's approach includes integrating the battery so that it forms part of
the structure of the vehicle, thereby reducing the effective weight of the
battery.

Mr Musk said that full production is about three years away.

 

 

The speech took place in front of 240 shareholders - each sitting in a Tesla
Model 3.

Central to cheaper Teslas are innovations in the way the company designs
batteries - radically improving their efficiency.

Prof Stanley Whittingham - who was awarded the Nobel Prize in Chemistry last
year for his work on lithium-ion batteries - told the BBC that "tackling all
the opportunities is high risk, but high pay-off".

 

"Many of us have suggested the same steps are necessary, but Tesla has the
investment and will to make it happen. Not sure anyone else is willing to do
this," he said.

Mr Musk also announced that as well as purchasing batteries from Panasonic
and LG Chem - Tesla itself would begin to make them.

In April last year, Musk himself revealed problems with sourcing Panasonic
batteries used in its Model 3 Tesla.

One expert said scaling up would be "challenging".

 

"Even with really experienced car manufacturers, we tend to see a very high
scrap rate of production in the first couple of years," said Casper Rawles,
head of price assessments at Benchmark Mineral Intelligence.

Mr Rawles also warned that so much of the content of the battery is
expensive metals - "You can only reduce the cost down to a point".

 

Four consecutive quarters of growth have helped Tesla's share price soar and
it is now the most valuable car company in the world.

Tesla CEO Elon Musk has announced technology that he says will make Tesla
batteries cheaper.

 

 

This is despite criticisms of Elon Musk that some of his technological
advances have been exaggerated.

Earlier this month, customer group Consumer Reports released a damning
report about Tesla's automated driving services. The research concluded that
"for now, full self-driving capability
 remains a misnomer".

 

And in July, Mr Musk said Tesla would be able to make its vehicles
completely autonomous by the end of this year. The statement was met with
scepticism by industry insiders.

 

Tesla's boss however announced that a "beta" version of the full Autopilot
software would be available "in a month or so".

Musk is no stranger to glitzy and sometimes bizarre public demonstrations.

Earlier this month he unveiled a pig with a coin-sized computer chip in its
brain to demonstrate his ambitious plans to create a working
brain-to-machine interface.-bbc

 

 

 

Nike expects permanent shift to online sales

Sportswear firm Nike has seen a huge rise in online sales as it bounces back
from a coronavirus slump.

 

The US company saw digital sales rocket 82% during the June to August
quarter, offsetting falling revenue in its stores.

 

On Tuesday, Nike posted revenue of $10.6bn (£8.3bn) as many of its key
markets recovered including China.

 

For its previous quarter revenues were down by more than a third as it
tackled store closures and lockdowns globally.

 

Nike chief executive John Donahoe said the shift to online sales could be a
permanent trend.

 

"We know that digital is the new normal. The consumer today is digitally
grounded and simply will not revert back," Mr Donahoe said.

 

 

Sales are growing in its major markets including China, Japan, South Korea
and the UK, while its core North American market is declining.

 

Nike's shares rose more than 10% in late trading in the US, as the results
were better than Wall Street had expected.

 

Nike has been using its website and shopping apps to release limited edition
footwear.

 

The sportswear giant has been transforming itself to sell directly to
customers over the past few years, reducing its store presence and retail
partners.

 

While many gyms have been closed during the pandemic, sportswear makers have
reported strong demand for more casual attire as more people work and
exercise at home.

 

Rival Adidas said last month that it was seeing improving sales trends while
yoga pants maker Lululemon posted a 157% jump in its online business.

 

Like many other retailers, Nike is still limiting the number of people who
can come into its stores at once to try to help curb the spread of the
virus.

 

But when people do visit, they're coming with the intent to buy, Nike
said.--bbc

 

 

 

Kingfisher to hand back £23m of UK furlough cash

B&Q owner Kingfisher is to hand back £23m in UK furlough cash after a
do-it-yourself boom due to coronavirus.

 

Second-quarter home improvement sales rose as more people worked from home
and looked at fresh ways to use space during the pandemic, Kingfisher said.

 

People in England have been told to work from home if possible after a
period of more relaxed restrictions.

 

UK firms have voluntarily returned more than £215m to the government in
furlough scheme payments.

 

The coronavirus crisis has badly hit many parts of the economy, but some
firms are seeing benefits.

 

Pre-tax profits for the company as a whole jumped more than 62% to £98m in
the half year, after a strong second quarter.

 

"The crisis has prompted more people to rediscover their homes and find
pleasure in making them better," said Kingfisher chief executive Thierry
Garnier. "It is creating new home improvement needs, as people seek new ways
to use space or adjust to working from home."

 

The crisis also boosted shopping online. Kingfisher's e-commerce sales rose
164% in the first half of the year and now represent 19% of total sales, up
from 7% in the same period last year.

 

Bust then boom

After Covid-19 hit Kingfisher sales in the first quarter, second-quarter
sales made a strong recovery, the company said.

 

The group owns B&Q and Screwfix in Britain and Castorama and Brico Depot in
France and other markets.

 

It said half of its staff were on job retention schemes in the UK, France,
Spain and Romania in April, but that had dropped to about 10% by the end of
May as Kingfisher reopened stores.

 

Apart from staff who were vulnerable, all employees had returned to work by
1 July, Kingfisher said.

 

Over the six months to 31 July, the group claimed £55m in state aid in its
different markets, including the £23m it intends to repay in the UK.

 

However, a spokesman for the group said the situation in France was "very
different" and that profit had been hit by an extended period of lockdown.

 

Furlough money

UK firms have voluntarily returned millions of pounds to the government in
furlough scheme payments they did not need or took in error.

 

More than 80,400 employers have returned cash they were given to help cover
workers' salaries, according to HMRC figures.

 

But the money that has been returned is a tiny part of the £35.4bn claimed
under the scheme up until 16 August.

 

Officials believe £3.5bn may have been paid out in error or to fraudsters.

 

Under the Coronavirus Job Retention Scheme (CJRS) - or furlough scheme -
workers placed on leave have received 80% of their pay, up to a maximum of
£2,500 a month.

 

At first, this was all paid for by the government, but firms are now having
to make a contribution to wages as well.—bbc

 

 

 

Microsoft And Shell Announce New Partnership To Use Artificial Intelligence
And Tech To Reduce Carbon Emissions

Tackling carbon emissions is one of the biggest challenges faced by the
world today. For big business, this means making a strategic and managed
move towards increasing the use of renewable energy sources, as well as
creating efficiencies across all aspects of their operations.

 

It’s a difficult task to manage alone, even for an enterprise on the scale
of tech giant Microsoft or energy titan Shell. But working together creates
new possibilities that go further than what it is likely they could
accomplish individually. Beyond meeting their own zero-carbon commitments,
there's the opportunity to help other companies within their vast ecosystems
of customers and suppliers to meet their environmental and safety goals,
too.

 

This was the topic of a conversation I had this week with Judson Althoff,
Microsoft’s executive vice president for worldwide commercial business, and
Huibert Vigeveno, downstream director at Shell.

 

We spoke to mark the announcement of a major partnership between the two
companies, with the aim of combining Shell’s expertise in clean and
efficient energy creation with Microsoft’s expertise in cutting-edge
technology, such as artificial intelligence (AI), cloud computing, and the
internet of things (IoT).

 

This has resulted in a number of initiatives to reduce carbon footprints -
including helping Microsoft to meet its commitment to becoming carbon
neutral by 2025, as well as to develop safer and cleaner working
environments.

 

Althoff told me, "When we made those commitments, it was pretty clear that
we wouldn't be able to do it by ourselves, and quite frankly, we were
reliant on technology that didn't exist at the time.

 

“What we’re excited about with this announcement is that the tech and
innovation partnership with Shell will help us get there.”

 

Projects so far launched have involved Microsoft AI specialists teaming with
Shell data scientists to probe areas of operation where cooperation is
likely to have the deepest impact. This has led to the development of 47
separate applications designed to reduce the carbon footprint of the
business of energy production. The data storage and compute workload is
handled through Microsoft’s Azure platform, so insights and efficiencies
gained in one area of operation can be put to work to benefit any other
area. This has included building “digital twin” functionality to create a
simulated, virtual model of the entire energy generation process. As well as
optimizing their own operations, the solutions will also be offered as a
service to any other organization they work with that might benefit from
them.

 

Althoff describes the concept of building the digital twin in terms of
putting a “sensor fabric” across all areas of Shell’s operations – a fabric
that has so far collected over 10 billion rows of measurements and
observations. One operation approached in this manner was Shell’s production
and distribution of liquified natural gas. Real-time models are created that
allow AI algorithms to accurately compute the most efficient adjustments
that can be made to operating parameters in order to reduce the amount of
CO2 emitted during the process. This allows research and experimentation
that would take years to be carried out at a vastly accelerated pace in the
digital world.

 

Another application monitors and records the corrosion rate of protective
equipment used by workers involved with hazardous environments and
materials, allowing them to be replaced in an efficient manner and improving
on-site safety. As with the applications driving efficiency in liquified
natural gas production, this leverages machine learning and cognitive
computing technology.

 

As Vigeveno put it to me, "I think it's fair to say that both of our
organizations have very bold climate ambitions. We both want to be net-zero,
but collectively we believe we can really play a role in the energy
transition. 

 

"This is not something you can do alone, but you really need to do with
partners and going sector by sector. So, this [partnership] will not just
bring value to our own organizations but to our customers around the world.”

 

Even within their own operations, though, the scope for driving positive
change is immense, with Shell operating 45,000 retail points across the
world servicing 30 million customers each day, and Microsoft's Windows 10
software installed on over a billion devices.

 

But it is by expanding the use of these applications to suppliers,
customers, and other partners that the biggest benefits are likely to be
seen.

 

Vigeveno told me, "The ambition at both of our companies is really to help
the world decarbonize, and we both realize that it's really the
decarbonization of our customers that will let us fulfill those ambitions."

 

The aim is to roll out the technology on a sector-by-sector basis,
recognizing that while it may serve customers in industries from aviation to
zoos, the needs of specific industries will be very different, as will the
opportunities for creating change, efficiency, and safety improvements.

 

Clearly, Shell has been a technology-driven company from day one.
Breakthroughs in exploration and drilling were the foundation of its
business over a hundred years back. But partnering with a business whose
whole core function is the provision of technology, like Microsoft, gives it
access to expertise and world-class infrastructure across all fields of
information technology. Its ability to leverage AI, cloud computing, and the
sensor-rich environment created by IoT, in particular, is of huge value to
the energy giant.

 

Likewise, Microsoft will help meet its own emission targets as well as lower
the operating costs of its global network of data centers and processing
facilities, by collaborating with Shell on implementing renewables other
efficiency-driving changes into its operations.-forbes.com

 

 

 

$5 billion fintech firm TransferWise posts fourth straight year of
profitability

LONDON — TransferWise, one of Europe’s most valuable private financial
technology firms, just posted its fourth consecutive year of profitability.

 

The online money transfer service said Wednesday that its net profit more
than doubled to £21.3 million ($27.1 million) in the fiscal year ending
March 2020. Annual revenues came in at £302.6 million, TransferWise said, up
almost 70% from the previous year.

 

TransferWise’s annual accounts have been in the black since 2017, a rare
display of sustainable growth in the fintech sector. Other start-ups in the
space have reported deepening losses due to spending on new product features
and overseas expansions.

 

Matt Briers, TransferWise’s chief financial officer, said the company prides
itself on being transparent about the fees it charges on transactions.
So-called neobanks like Monzo and Revolut have struggled to break even with
their zero-fee checking accounts, and have looked to premium accounts as a
potential avenue to reach profitability.

 

 

TransferWise said it processed a total of £42 billion in cross-border
payments across the year, as well as an additional £25 billion in domestic
payments. Breaking down revenue by different regions, the London-based firm
said Europe accounted for over half of its income while the U.S. made up 26%
and Asia-Pacific 22%.

 

It’s important to note that TransferWise’s annual numbers exclude much of
this year’s performance, and therefore wouldn’t truly convey the impact on
its business of the coronavirus pandemic. However, Briers told CNBC that the
crisis has been “financially positive” for the firm due to the shift to
online services.

 

“When you look through all of the noise, actually what we see is more people
joining TransferWise,” Briers said in an interview this week, adding that
10,000 businesses now sign up to its platform every month. “The macro shift
from old world tech to new world tech has been accelerated.”

 

No rush to IPO

Founded in 2011, TransferWise has gained a following thanks to its slick
online platform and lower foreign exchange fees than banks. The company has
since expanded its offering over the years to include business accounts and
multi-currency debit cards, and is now also looking to add an investments
feature.

 

The company was valued at $5 billion in its most recent investment round, a
secondary share sale, which saw investors buy equity from employees and
early backers. This approach forgoes the process of seeking fresh cash and
liquidity in an initial public offering, or IPO, and provides existing
investors an alternative way to offload some of their holdings.

 

Briers said TransferWise “could list right away,” adding “the resilience and
robustness of the business is probably higher than that of a public
company.” But, he added: “There’s a lot of work involved in running a public
company that doesn’t, at the minute, help our customers.”-cnbc

 

 

 

Angola negotiates $6.2 billion debt relief from creditors: IMF

LONDON/JOHANNESBURG (Reuters) – Angola will receive $6.2 billion in debt
relief over the next three years thanks to agreements lined up with three of
its major creditors, the International Monetary Fund (IMF) said in a report
released on Monday.

 

On Friday, Angola said it was close to striking debt agreements with a
number of Chinese banks and government agencies.

 

The African oil exporter has buckled under a rising debt burden following a
sharp decline in crude prices and amid the economic fallout from the
coronavirus pandemic.

 

“Although debt is sustainable, significant vulnerabilities remain,” the IMF
said in its report. “Debt dynamics are highly sensitive to further oil-price
volatility.”

 

In a letter included in the report, the Angolan government, which has
already sought relief from official bilateral creditors under an initiative
backed by the Group of 20 (G20) wealthy economies, acknowledged its
precarious position.

 

“To the extent that unforeseen risks to achieving the medium-term debt
target materialise, we will act to mitigate those risks, including by
seeking additional debt relief from a wider group of creditors,” it said.

 

Private sector participation in debt relief has become a hotly debated issue
ahead of a decision by the G20 on whether to extend debt payment holidays
beyond 2020.

 

While the World Bank has pushed for private creditors to shoulder some of
the burden of debt relief, investors as well as some governments have argued
this would endanger their access to international capital markets.

 

Asked about the prospect of compulsory private creditor involvement on
Friday, Angola’s Secretary of State for Budget and Investment Aia-Eza Silva
told Reuters: “Our main focus now is to deal with the main creditors, our
big (bilateral) creditors, and this is where we are putting our emphasis
now.” Meanwhile a 5% plunge in oil prices has added to the pressure on
Angola’s dollar bonds XS1318576086=TE, which dropped more than 4 cents in
the dollar to trade at just over 86 cents, their lowest level since mid-July
according to Tradeweb data.

 

CHINESE DEBT

Angola owes more than $20 billion to a number of Chinese entities, including
$14.5 billion to the China Development Bank (CDB) [CHDB.UL], and nearly $5
billion to the Export-Import Bank of China (EximBank) 2544.HK. It has also
borrowed from China’s largest lender, ICBC.

 

While the IMF declined to name the creditors involved in the debt
reprofiling deals, two private analysts following the negotiations said two
of them were the CDB and EximBank.

 

Luanda struck a deal with one of its largest creditors, identified by the
analysts as the CDB, in June, the IMF said. That agreement grants a
three-year deferral of principal payments on three loans, with the largest
one to be repaid over seven years thereafter.

 

An agreement with a second large creditor, identified by the analysts as
EximBank, is being worked out with a similar reprofiling of principal
payments, the IMF said in the report.

 

“The authorities have secured concrete and credible financing assurances
from these creditors,” it said.

 

Meanwhile, discussions with a third creditor were ongoing, according to the
report.

 

The Fund estimated that Angola’s debt-to-GDP ratio would steadily decline
from just over 120% predicted for the end of the year to 37.8% by the end of
2030.-cnbcafrica

 

 

Ghana plans $500 million London listing of gold royalty fund: sources

LONDON/JOHANNESBURG (Reuters) – Ghana, Africa’s largest gold producer, is
planning an up to $500 million listing of its gold royalty fund in London in
October, though the deal could still run into political opposition, three
sources familiar with the matter told Reuters.

 

Agyapa Royalties, a government-backed fund that holds equity interests
including mining royalties in the state’s gold assets, has hired Bank of
America BAC.N and JPMorgan JPM.N to pursue an initial public offering (IPO)
on the London Stock Exchange this year, the sources said.

 

Royalties are payments that give the owner the right to receive a percentage
of production from a mining operation, or retain a stake in them.

 

Ghana wants to take advantage of the precious metal’s strong performance
this year to raise $400 million-$500 million from the IPO, the sources said.
The fund’s shares will also be listed on the Ghanaian Stock Exchange.

 

Yet, the listing could be derailed or pushed back because of resistance from
Ghana’s main opposition party ahead of a December general election, the
sources said.

 

“It’s genuinely 50-50 at the moment, but if the local politics works out,
the deal is ready to go this year,” said one of the sources.

 

Ghana’s finance ministry was not immediately reachable due to a public
holiday. JP Morgan declined to comment while Bank of America did not
immediately respond to a request for comment.

 

If it goes ahead, the listing would benefit from a surge in gold prices as
the COVID-19 pandemic pushed investors into safe-haven investments.

 

While the spot gold price has come off a record high hit in August, it is
still up a whopping 27% so far this year at $1,931 an ounce XAU=.

 

Canadian companies Yamana Gold and Wheaton Precious Metals have both
signalled their intention to add a London listing this year.

 

For London investors, it is an opportunity to increase gold exposure and
potentially fill the gap left by South Africa’s Randgold, which delisted in
2018.

 

The deal would also come at a time when the market for IPOs has come roaring
back after a dismal first half of the year, with The Hut Group THG.L sealing
a 5.4 billion pound ($6.99 billion) float last week.-cnbc

 

 

Gold miners insist they won’t splurge despite price surge

(Reuters) – The world’s top gold miners sought to reassure investors on
Monday that they’re not going on a spending spree despite surging gold
prices boosting their shares and free cash flow.

 

 

Miners are opting to give more cash back to shareholders rather than
plotting takeovers which the market may disapprove of with the COVID-19
pandemic far from over.

 

“We don’t need to, and will not be, chasing volume,” Newmont Chief Executive
Tom Palmer told the Gold Forum Americas conference. “In this current gold
price environment we are actively assessing an increase to our sustainable
dividend.”

 

Newmont’s annual dividend of $1 per share was based on a gold price of
$1,200 per ounce. Gold was last trading at $1,887 per ounce.

 

Kinross reinstated its dividend last week, at 12 cents per share annualized,
for the first time since 2013. “We think it’s a good starting point,” CEO
Paul Rollinson said at the conference.

 

Newcrest Mining targets a dividend payout of at least 10% to 30% of free
cash flow.

 

“Having a lot of gold won’t create value unless you can achieve strong
margins from its extraction,” said Newcrest CEO Sandeep Biswas.

 

Barrick Gold CEO Mark Bristow said the industry needs further consolidation
but sought to reassure investors he saw no imminent deals.

 

“Wherever we see opportunities to add to our Tier 1 portfolio, we’ll be
right there in front of the queue,” he said, but added: “The most important
thing is exploration and organic growth.”

 

Barrick will publish a formal dividend policy early next year.

 

Sibanye-Stillwater would like to increase exposure to gold but it’s a
“difficult time to do anything,” Chief Executive Neal Froneman said.

 

“We don’t anticipate major M&A announcements,” Credit Suisse analyst Fahad
Tariq said on Friday. Site visits remain difficult and companies are wary of
repeating past mistakes, he said.-cnbc

 

Asian stocks struggle as investors focus on U.S. dollar

SINGAPORE/NEW YORK (Reuters) - Asia’s stock markets struggled for gains on
Wednesday and the U.S. dollar rose to a two-month high as persistent worries
about the global economic recovery had investors preferring safety.

 

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3% for its
first gain this week, but the mood was hardly bullish.

 

Japan’s Nikkei returned from a two-day holiday to slip 0.4%. Markets
elsewhere offered only a lacklustre follow up to Wall Street’s rebound, with
Hong Kong and Shanghai steady.

 

Australia’s ASX 200 gained 2.6%, Aussie bonds rallied and the Aussie dollar
slipped on growing expectations that the central bank eases policy again
next month.

 

The standout mover was the gaining dollar, which briefly sent spot gold to a
six-week low of $1,881.65 an ounce.

 

“There looks to be a squeeze on dollar shorts,” said Westpac FX analyst Sean
Callow, with positions stretched and no new stimulus from the Federal
Reserve to keep it under pressure.

 

The greenback begun gaining after hawkish remarks from a senior U.S. Federal
Reserve official overnight and extended in Asia amid a general tone of risk
aversion - adding 0.2% against a basket of currencies to its highest since
July.

 

Chicago Fed President Charles Evans, due to become a voter on the Federal
Open Market Committee in 2021, said on Tuesday the Fed still needed to
discuss its new inflation approach but it “could start raising rates before
we start averaging 2%.”

 

That crimped inflation expectations, lifted U.S. real yields and set the
dollar rising.

 

“Attempts to fade dollar bounces seemed to be weakening,” said OCBC Bank FX
strategist Terence Wu. “We put that down to a lack of fresh dollar downside
drivers.”

 

The euro was forced below $1.17 in Asia and last traded at $1.1683 and
traders say more downside risk is possible if rising coronavirus infections
in Europe weigh on preliminary purchasing managers’ index figures due at
0800 GMT.

 

EASY DOWN UNDER

The recovery of U.S. stocks on Tuesday, like the slump through September,
lacked an immediate trigger and comes with plenty of geopolitical and
economic risks to the recovery.

 

China-U.S. tensions are simmering, Britain has re-imposed some curbs on
restaurants to try and head off a second wave of coronavirus infections and
the U.S. election campaign seems to be distracting Congress from passing
major aid bills.

 

In Asia, a Tuesday speech from a senior central banker in Australia, which
flagged more monetary support, seems to have refocused investor attention on
the long-term economic malaise that job losses and consumption cuts could
cause.

 

“In the (central) bank’s current figuring, restoration of the full
employment rate ... is in the far distant future,” Westpac economist Bill
Evans said in a note.

 

“That means that policy needs to be very stimulatory,” he said, forecasting
an interest rate cut in Australia next month.

 

The Australian dollar fell 0.5% to a six-week low of $0.7116 on Wednesday
and longer-tenor yields sank in anticipation that central bank bond buying
might be extended.

 

Elsewhere in Asia, the Malaysian ringgit fell sharply amid fresh political
turmoil as opposition leader Anwar Ibrahim claimed he now has enough support
to oust the government and command a majority in parliament as leader
himself.

 

Oil prices continued to retreat from last week’s gains, slipping in Asia
after an industry group reported a surprise rise in U.S. crude inventories,
adding to worries about demand.

 

Brent crude futures were last down 0.7% at $41.42 a barrel and U.S. crude
futures slipped 0.9% to $39.43.

 

U.S. bonds were steady, with the yield on benchmark 10-year U.S. debt up
less than one basis point at 0.6724%.

 

 

 

 

Citi closes market making business in retail options: FT

(Reuters) - Citigroup Inc C.N has closed its market making business in
retail options that serves retail broker-dealers, the Financial Times
reported on Wednesday, citing three people with knowledge of the decision.

 

The bank closed the business at the start of last month, the FT said, adding
that Citi maintained its market making operations for institutional
investors and high-net-worth customers.

 

Citi pulled out as it was unable to compete in a technology arms race to be
among the fastest and most reliable venues on Wall Street, according to the
report.

 

Citi did not immediately respond to a Reuters request for comment.

 

 

 

KKR to invest $755 million in retail arm of Reliance

NEW DELHI (Reuters) - Private equity firm KKR & Co Inc will invest $755
million in the retail unit of Reliance Industries Ltd, the Indian
conglomerate said on Wednesday, bringing the total funding in Reliance
Retail to $1.78 billion within a month.

 

 

Reliance Industries, controlled by Asia’s richest man Mukesh Ambani, is
lining up investors in its retail unit after the conglomerate raised just
over $20 billion this year from global investors, including Facebook Inc, by
selling stakes in its Jio Platforms digital business.

 

The Mumbai-headquartered Reliance has approached investors in Jio Platforms
about buying stakes in its retail arm, Reuters had reported. While Silver
Lake, another one of Jio Platforms’ backers, said earlier this month it will
invest $1.02 billion in Reliance Retail.

 

KKR’s investment for a 1.28% stake in Reliance Retail values the company at
4.21 trillion rupees ($57 billion), Reliance said in a statement.

 

“Retail, whether online or offline, is a very capital-intensive business, so
for Reliance making sure that their retail venture has a funding pipeline of
its own is important,” said Devangshu Dutta, the chief executive of retail
consultancy Third Eyesight.

 

KKR, which announced its biggest investment in Asia with a $1.5 billion
stake buy in Jio Platforms in May, said it was deepening its relationship
with Reliance.

 

Reliance Retail is “empowering merchants of all sizes and fundamentally
changing the retail experience for Indian consumers,” KKR co-founder Henry
Kravis said in the statement.

 

Reliance, already India’s biggest retailer with roughly 12,000 stores,
forged a $3.38 billion deal last month to acquire rival Future Group’s
retail business.

 

The Indian conglomerate is also attempting to expand its so-called new
commerce venture, which ties neighborhood stores to Reliance for online
deliveries of groceries, apparel and electronics in a space currently
dominated by Walmart Inc’s Flipkart and Amazon.com Inc’s Indian arm.

 

“Anyone taking on the deep-pocketed Amazon and Walmart has to make sure they
are equally well-capitalized,” Dutta said.

 

($1 = 73.5700 Indian rupees)

 

 

 

Amazon launches climate-friendly program to help shop for sustainable
products

(Reuters) - Amazon.com Inc, the world’s biggest online retailer, announced
the launch of a climate-friendly program on Wednesday to help customers shop
for sustainable products, as part of its commitment to be net carbon neutral
by 2040.

 

Customers will now see more than 25,000 products ranging from grocery,
household, fashion, beauty and personal electronics with a ‘Climate Pledge
Friendly’ label, Amazon said in a statement.

 

“With 18 external certification programs and our own Compact by Design
certification, we’re incentivizing selling partners to create sustainable
products that help protect the planet for future generations,” Chief
Executive Officer Jeff Bezos said.

 

Amazon, which delivers about 10 billion items a year and has a massive
transportation and data center footprint, had faced protests from
environmental activists and was under pressure from its employees to take
action on climate change.

 

The company had said in June it would launch the Climate Pledge Fund, a $2
billion venture capital fund that will invest in companies across industries
to help reduce the impact of climate change and support sustainable
development.

 

Last year, Bezos had pledged to make Amazon net carbon neutral by 2040 - the
first major corporation to announce such a goal - and to buy 100,000
electric delivery vehicles from U.S. vehicle design and manufacturing
startup Rivian Automotive LLC.

 

 

 

A little help from our friends: banks team up as FX trading gets tougher

LONDON (Reuters) - Faced with the costs of competing in a world of
electronic and algorithmic trading, many banks are outsourcing parts of
their foreign exchange businesses, a trend that may cement big lenders’
dominance of global currency trading.

 

Loose, informal relationships where smaller players rely on bigger peers for
the best prices and liquidity have long existed in the $6.6 trillion-a-day
FX market. But as high-tech trading supercharges competition for the fastest
speeds and tightest prices, more formal tie-ups are becoming common.

 

Given the importance of forex to corporate clients, few banks would opt to
drastically reduce FX operations, the way they could with equities trading,
for example. They are choosing instead to pull back from areas where they
cannot compete but still want to sell to their customers.

 

“UK and European banks have had to focus on areas of strength and an
inevitable consequence of this is to look for partnerships. Naturally it
makes sense to sub-contract some,” said Simon Manwaring, who heads currency
trading at NatWest Markets.

 

This can involve accessing liquidity provided by multiple other banks, or
more formal agreements to rely on a specific institution for certain
currencies, or during a specific time of the trading day.

 

While outsourcing constitutes a small part of NatWest’s trading volume,
Manwaring said it makes sense for currencies or time zones where the bank
has little geographic presence.

 

The opacity of FX markets makes it impossible to measure the scale the
practice, which is often called white labelling because the end client
always trades with and has exposure to their own bank.

 

But what is clear is the growing concentration of trading, with the FX
market share of the five top banks rising to 41% in the first half of 2020,
versus 37% in 2016, data from Coalition shows.

 

 

Sweden’s SEB looks to other banks to supply liquidity in emerging market
currencies, certain FX option products and to help execute computer-run algo
trading, its global head of FX, Svante Hedin told Reuters, adding that the
progression of technology had accelerated outsourcing.

 

Other factors behind the shift include shrinking profit margins and
regulations like Europe’s Mifid II, which require banks and investors secure
the best execution prices for clients.

 

Measuring prices paid on FX deals through third-party transaction analysis
is far easier now than five years ago, market participants note.

 

BATTLING THE BANKS

The big lenders dismiss fears that outsourcing will further tighten their
grip, noting that their dominance and creditworthiness allow them to offer
clients the best prices in the safest way.

 

There are also real hurdles to clear. Industry insiders say conversations
often lead nowhere, while formal agreements between two institutions are
particularly tough as banks and clients baulk at exclusive arrangements that
restrict their ability to trade with others.

 

Newer electronic market-making outfits such as Citadel Securities and XTX
Markets are in the meantime battling with the banks, although their role is
largely limited to spot trading.

 

Kevin Kimmel, Global Head of eFX at Citadel Securities, said market-makers
had to show “exceptional execution quality” so that banks -- who will still
have the reputational risk of offering uncompetitive prices -- felt
comfortable offering those prices to clients.

 

The newer entrants compete directly with banks on multi-dealer trading
platforms, as well as offering outsourcing tie-ups so banks can use their
liquidity.

 

Citadel Securities has increased the number of white labelling partnerships
it has with banks this year, according to a source familiar with the matter,
while XTX recently launched an FX execution algorithm marketed to investors,
banks and trading platforms.

 

So what’s next? Despite the recent growth, outsourcing in FX remains
limited. But Vincent Bonamy, head of global intermediary services at HSBC,
believes more and wider agreements are on the cards.

 

“The interesting part of this is the potential expansion into broader
outsourcing among different players in the market,” he said. “It’s not only
about distribution but (also) FX settlement and execution potentially.”

 

 

 

 

 

 

 

 

 

 


 


 


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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