Major International Business Headlines Brief::: 29 September 2020

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Major International Business Headlines Brief::: 29 September 2020

 


 

 


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

 


 

 


 

 

ü  BTS to become multi-millionaires after label goes public

ü  Covid: Public spending rise could last longer

ü  Bank deputy governor warns against negative interest rates

ü  Covid: Adults without A-levels to be offered free college courses

ü  Asda: UK billionaire brothers edge ahead in race to buy supermarket

ü  US squeezes China's biggest chip-maker SMIC

ü  Uber spared from London ban despite 'historical failings'

ü  William Hill: Caesars Palace-owner in 'advanced' talks over £2.9bn offer

ü  UK seeks to boost job training to help workforce recover from COVID-19

ü  Asian markets hunker down ahead of U.S. presidential debate

ü  Card Factory posts first-half loss, says not possible to give outlook

ü  UK watchdog sets Wednesday deadline for agreement on business insurance claims

ü  Musk plans IPO for SpaceX's Starlink business

ü  Walmart looking at up to $25 billion investment in Tata Group's 'super app' - Mint

ü  Sanctions-hit Huawei ramps up investment in Chinese tech sector

ü  Pandemic spurs Africa's mobile telcos to ramp up banking bid

 

 

 

 

 

 

 

 

 


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

 


 

BTS to become multi-millionaires after label goes public

All seven members of South Korean K-pop group BTS are set to become multi-millionaires, when their label Big Hit Entertainment goes public in October.

 

Soaring demand for shares in Big Hit has given it a market valuation of £3.2bn ($4.1bn), with shares priced at the top of the expected price range.

 

Big Hit boss Bang Si-hyuk, who owns 43% of the management label, will become a billionaire.

 

In August, he gave each BTS member 68,385 shares, worth £6.2m in total.

 

Currently priced at between 105,000-135,000 won (£70.03-£88.70) per share, Big Hit expects to raise about £638.3m with the sale of 7.13 million new shares when it is listed on Korea's Stock Exchange, the KOSPI, on 15 October.

 

BTS set a new record on Monday when it took just hours for underwriters to find investors to take a stake in the firm when order books opened, with demand 1,000 times higher than the available stock.

 

According to CNBC, die-hard BTS fans in South Korea are hoping to buy at least one share in the management label to support their favourite members.

 

What is even more striking is that this is South Korea's largest IPO in three years.

 

It's a sign that BTS' popularity has not waned, despite the group being forced to cancel their world tour due to the coronavirus pandemic, and the risk that some of the members may soon have to do two years of compulsory military service.

 

In 2019, BTS generated 97% of Big Hit's sales last year, and 88% this year.

 

BTS has repeatedly broken records in their seven-year history. In August, its single Dynamite became the most viewed YouTube video in 24 hours, amassing 101.1 million views in a day.

 

The K-pop band also became the first Korean artists to top the Billboard Hot 100 chart with that single, drawing praise from South Korea's President Moon Jae-in, who said were writing a "new chapter in K-pop history".

 

And an online concert held in June set another Guinness World record for the most viewed music concert live stream, with 756,000 fans joining from over 100 countries.

 

The group is made up of Kim Tae-hyung (known as V), Jung Ho-seok (J-Hope, Kim Nam-joon (RM), Kim Seok-kin (Jin), Park Ji-min, Jeon Jung-kook and Min Yoon-gi (Suga).

 

They have credited much of their success to their loyal international fan base, known as ARMY, who have helped make BTS the most tweeted-about music group from March to September this year.

 

Fans are now eagerly awaiting the upcoming release of BE, BTS' second album of the year, on 20 November.--BBC

 

 

 

Covid: Public spending rise could last longer

The government must choose this autumn between more austerity and permanently higher spending, experts warn.

 

Although the Autumn Budget has been cancelled, the Treasury is still set to publish a Spending Review containing government expenditure plans.

 

Because of Covid-19, public spending is likely to rise to the highest share of national income in more than a decade, says the Institute for Fiscal Studies.

 

If not, another bout of austerity will hit many public services, it warns.

 

A Treasury spokesperson said: "The Spending Review will proceed this autumn, as planned. The chancellor has already confirmed that departmental spending will increase above inflation - both for day-to-day spending and longer-term investment."

 

The IFS forecasts come in a newly published advance chapter of its Green Budget 2020, which will be released in full next month.

 

"Plans will depend crucially on how much of the additional £70bn of public service spending - that's an increase of 20% on original plans - allocated this year to deal with the Covid-19 pandemic will need to be repeated in future years," the IFS said.

 

"Even if only a quarter of it is needed, for example to maintain purchases of personal protective equipment (PPE) and to keep a track-and-trace system going, then overall spending would have to rise well ahead of the plans set out in the last Budget, or another bout of austerity will be visited upon many public services."

 

Spending squeezed

The think tank said there would be other financial pressures, including on working-age social security spending and adult social care, while the economy was likely to be smaller than expected for a long period.

 

"The next set of spending decisions is likely therefore to result in public spending settling at a higher share of national income than it was after 10 years of Labour government back in 2007-08," it added.

 

The IFS said the UK had been through the longest sustained squeeze in public spending on record, but despite this, on the eve of the pandemic, public spending was at 39.8% of national income, much the same as it was in 2007−08.

 

Measures in Mr Sunak's Budget announced in March would have increased public spending by 10.7% over the next four years, but those plans had already been rendered obsolete by the coronavirus crisis, the think tank said.

 

Ben Zaranko, a research economist at IFS and the author of the research, said the pandemic and the looming end of the Brexit transition period made it an "extraordinarily difficult time" for the chancellor to be formulating public spending plans.

 

Some programmes brought in to fight the pandemic could "swallow up huge amounts of money" and leave some public services facing another round of budget cuts.

 

"Avoiding that scenario would require the chancellor to find billions of extra funding, paid for at some point through higher taxes," he added.

 

Governments normally set spending priorities for several years ahead, but given "the huge amount of economic uncertainty", the IFS said Chancellor Rishi Sunak would be "ill-advised" to embark on a multi-year Spending Review.

 

"Instead, it would be sensible to limit this year's Spending Review to a single year (2021−22), and delay decisions on spending in future years until a point when some of the uncertainty over Covid-19, Brexit and the future of the economy has dissipated," it added.—BBC

 

 

Bank deputy governor warns against negative interest rates

A Bank of England (BoE) deputy governor has spoken out against setting negative interest rates, which would bring the cost of borrowing below zero.

 

"At present, negative policy rates would be less effective as a tool to stimulate the economy," Sir Dave Ramsden told the Society of Professional Economists (SPE).

 

The Bank has so far responded to the pandemic by cutting rates to just 0.1%.

 

But some policymakers want it to do more.

 

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

 

But with interest rates already low, it's not clear how much negative rates would help spur new activity.

 

Negative interest rates: Bank of England policymaker defends plan

Could you have to pay your bank to save money?

And such a move raises the risk for banks, which make money by charging interest on loans and are typically hurt by lower rates.

 

Reducing rates now would also come just as banks face a higher risk of losses due to the pandemic, which has strained the ability of many of their customers to keep up with repayments on loans.

 

Sir Dave said the Bank of England needed to consider the potential impact on banks further before acting on negative rates.

 

"If you've got negative rates in the toolbox, I feel duty bound, given my duties at the bank, that you've then got to explore in more detail the operational considerations which would go with implementing negative rates," Sir Dave, a member of the BoE's Monetary Policy Committee (MPC) and Deputy Governor for Markets and Banking, told SPE.

 

"You don't want to be in the position where you've said you think you could use them, then say at some point in the future, the committee concludes actually we should use them, then you go back and look in the toolbox, and find that actually you can't use them for an operational reason."

 

Analysis by Szu Ping Chan, Business Reporter, BBC News

With interest rates already close to zero, the Bank of England has been looking for creative ways to keep the economy afloat.

 

Only a handful of central banks have joined the negative interest rates club, including Japan, Sweden, Switzerland and the European Central Bank.

 

Countries like Switzerland deployed negative rates to try to stop investors from ploughing money into the country, which was pushing up the strength of its currency.

 

But a blueprint for the UK wouldn't be as simple as copy and paste.

 

Savers who don't fancy being charged to put their money in the bank will just take their business elsewhere. Britain's banks are also being hit by loan losses as borrowers struggle to keep up with repayments. Squeezing their profits could push them into deeper trouble.

 

In any case, negative rates aren't around the corner. The Bank of England is using the next three months to look at how they could be implemented, before deciding whether they want to open the toolbox to use them.

 

Sir Dave added that the MPC was "not about to use [negative interest rates] imminently", and that it would "take time" to engage with the banks.

 

"We're continuing with a quantitative easing programme - no one is voting at present for negative rates," said Sir Dave.

 

"I see the effective lower bound [for interest rates] still at 0.1%, which is where Bank rate is at present. It is useful to stress that.

 

Sir Dave is one of few members of the Bank's nine-member Monetary Policy Committee to share his view of negative interest rates since the bank said it was considering such a step last month.

 

His warning marks a contrast to recent comments by Silvana Tenreyro, an external member of the committee, who told the Sunday Telegraph that evidence from other European countries and Japan suggested that negative interest rates had succeeded in cutting borrowing costs.

 

The evidence also showed that banks would cope with the extra pressure on their finances, despite the coronavirus pandemic, she added.--BBC

 

 

 

Covid: Adults without A-levels to be offered free college courses

Adults in England without an A-level or equivalent qualification will be offered a fully funded college course, the government has announced.

 

The offer will be available from April and applies to courses offering "skills valued by employers".

 

In a speech on Tuesday, the PM will say the government cannot "save every job" amid the coronavirus pandemic, but wants to help people find new work.

 

Labour said the plans would not reverse the impact of "a decade of cuts".

 

The government decision comes amid fears that unemployment is set to grow sharply.

 

The Office for Budget Responsibility has said the unemployment rate could peak at between 9.7% to 13.2% in the next few years. The most recent rate - for May to July - is 4.1%.

 

In his speech, Boris Johnson will say: "As the chancellor has said, we cannot, alas, save every job - what we can do is give people the skills to find and create new and better jobs.

 

"We're transforming the foundations of the skills system so that everyone has the chance to train and retrain."

 

It comes as:

 

The number of people worldwide who have died from Covid-19 passes one million, researchers say, with many regions still reporting surging numbers of new infections.

 

It will be illegal from midnight for people in large parts of north-east England to mix with other households indoors, as part of tougher coronavirus restrictions announced by Health Secretary Matt Hancock.

 

Conservative backbenchers demanding votes in Parliament before any further coronavirus restrictions are introduced in England say they are hopeful an agreement can be reached with the government. Some MPs were invited to meet Matt Hancock on Tuesday, and said last night that progress was being made.

 

Education Secretary Gavin Williamson is due to make a statement in the House of Commons later as thousands of students have been told to self-isolate following a surge in cases at universities.

 

Retail union Usdaw says shop workers are being put at greater risk of violence, verbal abuse and coronavirus infection as a result of pubs shutting at 10pm.

 

The offer of courses to adults without an A-level will be paid for through the National Skills Fund topped up with £2.5bn, the government said.

 

A full list of available courses will be announced next month.

 

The government added it wanted to make higher education loans more flexible, with the aim of letting people "space out" their learning throughout their lives rather than in three- or four-year blocks, enabling more part-time study.

 

It said the changes would be backed by investment in college buildings and facilities, including more than £1.5bn in capital funding.

 

Further details will be set out in an education white paper later in the year.

 

In other plans, small businesses will be offered financial incentives to take on apprentices and £8m will be spent on skills "boot camps" in West Yorkshire, south-west England, Derbyshire and Nottinghamshire to cover sectors like construction and engineering.

 

This follows pilots in Greater Manchester and the West Midlands that focused on digital skills.

 

And the government's online Skills Toolkit, a collection of training resources launched in the spring to help people acquire jobs skills ahead of businesses reopening, will be expanded to include 62 additional courses.

 

Responding to the government's measures, Labour's shadow education secretary Kate Green said: "A week ago Labour called for a National Retraining Strategy fit for the crisis Britain faces, but what the government proposes is simply a mix of reheated old policies and funding that won't be available until April.

 

"By then many workers could have been out of work for nearly a year, and the Tories still think that they will need to take out loans to get the training they will need to get back in work."

 

She added the plans would not give workers "the skills and support they need in the months ahead".

 

CBI director general Dame Carolyn Fairbairn said the "significant" unemployment coronavirus is leaving in its wake "only accelerates the need for people to develop new skills and adapt to new ways of working".

 

"The lifetime skills guarantee and flexible loans to support bitesize learning are a strong start but to really shift gears, this must be backed up by meaningful progress on evolving the apprenticeship levy into a flexible skills levy," she added.

 

The apprenticeship levy - introduced in 2017 - takes 0.5% of the salary bill from major employers that have an annual pay bill over £3m, with the intention of using the money to improve skills and provide training.--BBC

 

 

 

Asda: UK billionaire brothers edge ahead in race to buy supermarket

Asda could return to UK ownership for the first time in 20 years after a group comprising the billionaire Issa brothers and TDR Capital emerged as frontrunners to buy the supermarket.

 

It is understood the Blackburn-based brothers and the private equity firm have been named as preferred bidders.

 

Asda has been owned by US giant Walmart since 1999.

 

Walmart is selling a majority stake in Asda after a merger with Sainsbury's was blocked on competition grounds.

 

A deal with the consortium could value Asda at £6.5bn according to Sky News, which first reported the story, although it has not been finalised.

 

The US private equity firm Apollo Global Management also remains in the race.

 

Petrol billionaires

Asda already has a relationship with Mohsin and Zuber Issa through EG Group, their petrol forecourt business.

 

The supermarket recently announced its expansion into convenience stores and will initially trial "Asda On the Move" at three of EG Group's fuel station forecourts in Ashby, Leamore and Primley in the Midlands.

 

Initially called Euro Garages, the Issa brothers founded EG in 2001, expanding it from a single site in Bury, Greater Manchester to owning almost 6,000 sites across 10 countries.

 

In 2019 the business reported revenues of more than €20bn (£17.9bn). TDR Capital now owns half of the group, with Zuber Issa owning 25% and Mohsin Issa the remaining 25%.

 

Walmart, which would continue to hold a minority stake in Asda after any deal, declined to comment on the sale process.

 

TDR and Apollo Global Management also declined to comment, while EG could not be reached for comment.--BBC

 

 

 

US squeezes China's biggest chip-maker SMIC

The US Department of Commerce has written to American suppliers of China's biggest chip manufacturer, warning them of "unprecedented risks" that their products could be used by the Chinese military.

 

The letter reminds the firms they must apply for licences to ship controlled items to Shanghai-based SMIC.

But it does not appear that Washington has decided whether or not to add the firm to a trade blacklist.

SMIC has denied any military links.

 

And it said it had not received any formal notice of new restrictions from the US.

But the latest action caused Semiconductor Manufacturing International Corporation's shares to drop about 7% in Hong Kong trade.

 

The fall followed a steeper decline earlier this month when the Pentagon first revealed it had proposed tougher restrictions against the business, including adding it to the government's Entity List.

 

That would prevent any company selling goods or services to SMIC that involved US intellectual property without first getting special permission.

 

Such a step has already been taken against SMIC's biggest client - Huawei - which has caused major disruption to the telecoms kit-maker's business.

 

Chinese state media had previously reported that SMIC was among many companies that had requested a US licence to continue supplying Huawei.

 

But one industry analyst suggested the latest move indicated the US was increasingly focused on SMIC itself.

"Denial of US semiconductor manufacturing equipment would put SMIC at a severe disadvantage, because most of that technology comes from American sources," explained Jim Tully.

 

"China could aim to become self-sufficient in these technologies over the longer term, but it seems to me that it would take 10-plus years to do so.

"And in the short term, the equipment and related software SMIC already uses still needs ongoing support and maintenance from its producers."

This has led to speculation that SMIC's survival may now be at stake.

 

Blocked sale

SMIC was founded in 2000, and has since become the most prominent chip-making foundry in mainland China.

Until recently, it was viewed as being a beneficiary of rising US-China tension because it was expected to benefit from Beijing's drive to make the country's tech sector self-sufficient.

 

The firm has raised close to $10bn (£7.7bn) this year via a share sale and other means to expand its operations.

In addition to Huawei, SMIC's clients include lesser-known Chinese chip designers including Gigadevice and Unisoc, as well as international companies including Qualcomm and Broadcom.

 

However, its most advanced products are said to lag two generations behind what rival manufacturers - including Taiwan Semiconductor Manufacturing Company (TSMC) and South Korea's Samsung - are capable of, because SMIC cannot currently make transistors as small as they can. This means its products are not suitable to be the state-of-the-art processors in the latest smartphones or other advanced gadgets.

The reason for this is in part due to existing restrictions Washington has imposed on the firm.

 

At present, the only way to make the most advanced logic chips is to use equipment made by a Dutch company, ASML.

ASML lab

 

 

SMIC ordered a $150m lithography machine - which uses lasers focused by giant mirrors to print miniscule patterns on silicon - from ASML in 2018. But Reuters reported the White House convinced the Dutch government to block the export on security grounds.

 

A spokesman for ASML declined to comment when asked by the BBC whether the deal was still in limbo.

 

Adding SMIC to the US Entity List would prevent the Chinese firm sourcing hardware, software and chemical materials from other suppliers.

 

For now, the company is hoping to avoid that outcome by clearly denying it supplies products to the People's Liberation Army.

 

"Any assumption of the company's ties with the Chinese military are untrue statements and false accusations," it has said.

 

But this has been called into question by others.

 

One Chinese state-owned newspaper has claimed the case illustrates the need for a "new long march" in order to "control all research and production chains of the semiconductor industry".

Bloomberg has reported that Beijing plans to unveil new policies to support the sector in October.--BBC

 

 

 

Uber spared from London ban despite 'historical failings'

Uber has secured its right to continue operating in London after a judge upheld its appeal against Transport for London (TfL).

 

The ride-hailing giant has been granted a new licence to work in the capital, nearly a year after TfL rejected its application over safety concerns.

 

It ends uncertainty for the 45,000 drivers who use the taxi app in London.

 

Westminster Magistrates' Court said Uber was now a "fit and proper" operator "despite historical failings".

 

One of the main concerns raised by TfL was a flaw in Uber's system that allowed unauthorised people to upload their photographs to legitimate drivers' accounts, which then allowed them to pick up passengers.

 

Westminster Magistrates' Court heard that 24 drivers shared their accounts with 20 others which led to 14,788 rides.

 

Uber's regional general manager for Northern and Eastern Europe, Jamie Heywood, said: "It was not what we would do now. It was inadequate, we could have done better."

 

Mayor of London Sadiq Khan said TfL was "absolutely right" not to renew Uber licence last year but acknowledged the company had "made improvements".

 

However, he added: "I can assure Londoners that TfL will continue to closely monitor Uber and will not hesitate to take swift action should they fail to meet the strict standards required to protect passengers."

 

Deputy chief magistrate Tan Ikram said he took Uber's "track-record of regulation breaches" into account but said it had made efforts to address failings and had improved standards.

 

"Despite their historical failings, I find them, now, to be a fit and proper person to hold a London PHV [private hire vehicle] operator's licence," he said.

 

The judge said Uber "does not have a perfect record but it has been an improving picture".

 

"The test as to whether [Uber] are a 'fit and proper person' does not require perfection. I am satisfied that they are doing what a reasonable business in their sector could be expected to do, perhaps even more."

 

The new licence will run for 18 months and comes with a number of conditions, allowing TfL to closely monitor Uber's adherence to the regulations.

 

Uber's Mr Heywood said: "This decision is a recognition of Uber's commitment to safety and we will continue to work constructively with TfL."

 

With 45,000 drivers on its books in London, Uber is a force to be reckoned with. But the body in charge of licensing in London has gone out of its way to take Uber on.

 

Transport for London (TfL) did manage to draw attention to a previous flaw in Uber's system which allowed unauthorised drivers to ferry people around. TfL piled on the pressure and, according to a judge, Uber's safety record has improved.

 

But when it refused to renew Uber's license, TfL knew that a judge would have the ultimate call. And at no point did anyone have to tell Uber's users in London that they couldn't order a cab.

 

Talking tough on Uber is one thing. But banishing it from a key European capital would carry significant consequences.

 

TfL originally refused to renew Uber's licence in September 2017. The company then won a 15-month licence by a judge in June 2018 after taking the case to court.

 

Uber was granted a two-month extension to its licence in September last year, but in November TfL decided not to grant it a new licence. At the time, TfL said it had "identified a pattern of failures by the company including several breaches that placed passengers and their safety at risk".

 

Uber appealed against the decision and was allowed to keep operating throughout the process.

 

Business campaign group London First said Monday's decision was "good news for millions of Londoners and visitors who rely on Uber to get around the capital".

 

However, the Licensed Taxi Drivers' Association said it was a "disaster for London".

 

"Uber has demonstrated time and time again that it simply can't be trusted to put the safety of Londoners, its drivers and other road users above profit," it said. "Sadly, it seems that Uber is too big to regulate effectively but too big to fail."

 

Workers' rights

Uber is still awaiting a separate UK court ruling over whether its drivers should be classed as workers or self-employed.

 

The case, brought by two former drivers, could see Uber forced to compensate drivers across the UK for missed holiday pay, paid rest breaks and the national minimum wage.

 

Uber, however, says the "vast majority" of its drivers like being freelance.

 

The courts ruled in favour of the drivers in 2016 and Uber lost an appeal in 2018. A judgement on the firm's final appeal to the Supreme Court is expected soon.--BBC

 

 

 

William Hill: Caesars Palace-owner in 'advanced' talks over £2.9bn offer

Caesars Entertainment, the Las Vegas casino-owner, says it is in advanced takeover talks with William Hill over a possible £2.9bn bid for the bookmaker.

 

The US firm said William Hill's board had indicated it is minded to recommend its cash offer of 272p a share.

 

William Hill has also received a takeover approach from US private equity firm Apollo.

 

But Caesars said if William Hill chose Apollo, it would jeopardise a joint venture between the companies.

 

Caesars owns a 20% stake in William Hill's US operations, which also have exclusive rights to operate sports betting under the Caesars brand.

 

The US firm, which owns Caesar's Palace in Las Vegas, is particularly interested in William Hill's US bookmaking business which currently has 170 retail sites in 13 different states.

 

Caesars chief executive Tom Reeg said: "The opportunity to combine our land based-casinos, sports betting and online gaming in the US is a truly exciting prospect.

 

"William Hill's sports betting expertise will complement Caesars' current offering, enabling the combined group to better serve our customers in the fast growing US sports betting and online market."

 

On Friday, William Hill confirmed that it had received two takeover approaches, which sent its share price soaring by 42% to 312p.

 

Caesars said its offer was nearly 58% higher than William Hill's share price on the day before the US company made its first approach on 2 September.

 

It added it was also above the betting company's share price on Thursday last week, before its disclosure of the two approaches caused its share price to surge.

 

But David Cumming, chief investment officer for equities at Aviva Investors, said offers for William Hill could outstrip the 312p level its shares ended at on Friday.

 

He told the BBC's Today programme: "The view is - and we do hold some William Hill so it [has] some interest here - the 40% rise on Friday, given comparative valuations in the US, it is possible that the bid comes in at a higher level than the closing price we saw then so there still might be some upside."

 

Apollo - which is also one of two firms in the final running to buy UK supermarket Asda - is yet to publish details of its possible offer for William Hill.

 

However, Mr Cumming said he thought Caesars was the most likely victor "because it already owns 20% of William Hill's US business and so it should have some synergies".--BBC

 

 

 

UK seeks to boost job training to help workforce recover from COVID-19

LONDON (Reuters) - Britain will launch training options for adults to learn new skills in an effort to boost productivity and help the country recover from the coronavirus crisis, Prime Minister Boris Johnson will announce on Tuesday.

 

The unemployment rate, already at over 4%, is expected to rise further as a job subsidy scheme put in place early in the pandemic expires next month to be replaced by a scaled-back job support programme.

 

“We cannot, alas, save every job. What we can do is give people the skills to find and create new and better jobs,” Johnson will say in a speech, according to excerpts sent by his office.

 

“We’re transforming the foundations of the skills system so that everyone has the chance to train and retrain.”

 

The measures will include funding to allow adults without qualifications to take certain college courses without paying fees, as well as flexible loans allowing people to space out their study and transfer credits between colleges.

 

The government will also seek to boost the number of apprenticeships, with more funding for small and medium firms taking on apprentices, and will extend a pilot programme known as digital skill boot camps to new locations.

 

The number of people doing vocational training has been falling over the past two decades, the government said, adding that 10% of adults in Britain held a higher technical qualification as their highest qualification, compared with 20% in Germany and 34% in Canada.

 

British businesses have complained for a long time of a shortage of skills in the workforce, and the country’s productivity has persistently been lower than in some comparable economies.

 

 

 

Asian markets hunker down ahead of U.S. presidential debate

(Reuters) - Asian markets hunkered down on Tuesday ahead of the first U.S. presidential debate later in the global day, with investors also remaining cautious over the global economy’s prospects as coronavirus deaths surpassed the 1-million mark worldwide.

 

U.S shares were set to open higher with E-mini futures for the S&P 500 up 0.43%, while London’s FTSE futures were up 0.22% and eurostoxx 50 futures were up 0.34%.

 

“Globally, a loss of momentum and the renewed rise in COVID-19 infection rates points to the need for additional fiscal and monetary support. That policy outlook is continuing to provide a supportive backdrop to equities despite recent volatility,” ANZ Bank analysts wrote in a note.

 

Japan’s benchmark Nikkei average edged up 0.22% into positive territory while China’s blue-chip CSI 300 index climed 0.51%.

 

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.31% to 554.56.

 

Hong Kong’s Hang Seng index however was down 0.24%, wiping out morning gains.

 

Australia’s S&P/ASX 200 index also fell back to trade flat after earlier touching its highest level in three weeks. New Zealand’s S&P/NZX 50 index lost 0.51%.

 

Asian markets have been buoyed by positive signs around China’s economic recovery, although the coronavirus pandemic continues to wreak economic havoc globally and raise concern about high valuations.

 

But trade in Asia was subdued ahead of China’s Golden Week holiday, from Oct.1-8, and other national holidays in the region.

 

The first U.S. presidential debate is scheduled later in the global day (Wednesday 0100 GMT), otherwise investors’ focus was locked on U.S. lawmakers efforts to cobble together additional economic stimulus.

 

U.S. House of Representatives Speaker Nancy Pelosi was set to hold further talks with Treasury Secretary Steven Mnuchin on Tuesday morning in Washington.

 

U.S. consumer confidence and home price data is also due later. Upcoming U.S. economic data should help show how well the country is positioned to rebound from pandemic lockdowns, and how necessary more stimulus will be.

 

Wall Street showed strong gains on Monday, particularly in hard-hit sectors like hotels, banks and airlines.

 

But there was also cause for caution, as Europe is experiencing a rise in new COVID-19 infections and some U.S. states continue to grapple with high case numbers.

 

Safe-haven spot gold was flat at around $1881 a an ounce. U.S. gold futures gained 0.21% to $1,876.7 an ounce.

 

U.S. Brent crude slipped 16 cents to $42.27 a barrel while U.S. light crude was down 21 cents at $40.39 on demand worries.

 

The U.S. dollar dropped from a two-month high against a basket of currencies Monday, with the dollar index falling 0.3%, its biggest daily percentage drop in roughly three weeks.

 

Bonds were broadly steady. The yield on benchmark 10-year U.S. government debt fell further to 0.625%.

 

 

 

Card Factory posts first-half loss, says not possible to give outlook

(Reuters) - Britain's Card Factory CARDC.L swung to a first-half loss on Tuesday and said it was not possible to provide a forecast for the rest of the year as its retail stores could be affected by a new wave of the coronavirus pandemic.

 

The cards and gifts retailer posted a pretax loss of 22.2 million pounds for the six months ended July 31, compared to a profit of 24.3 million pounds a year earlier, but said it has had an encouraging start to the second half of the year following reopening of its stores.

 

 

 

 

UK watchdog sets Wednesday deadline for agreement on business insurance claims

LONDON (Reuters) - Britain’s Financial Conduct Authority said on Tuesday it has filed an appeal in a test case as a precaution against insurers not agreeing by Wednesday to pay out on business interruption claims made during the pandemic.

 

The FCA said it continues to “work closely and at speed” with the eight insurers and two intervenors that participated in the test case to reach an agreement in principle on a range of issues to avoid an appeal.

 

An agreement is needed by close of business on Wednesday, and seven insurer parties have made similar precautionary appeals, the FCA said.

 

 

 

 

Musk plans IPO for SpaceX's Starlink business

(Reuters) - Tesla Inc Chief Executive Officer Elon Musk plans to list SpaceX’s space internet venture, Starlink, several years in the future when revenue growth is smooth and predictable.

 

"Public market does *not* like erratic cash flow haha," the billionaire entrepreneur tweeted here on Monday.

 

Musk said last year that Starlink was an important new revenue stream for his California-based Space Exploration Technologies, or SpaceX.

 

SpaceX President Gwynne Shotwell in February floated the idea of spinning Starlink off for an IPO in the coming years.

 

SpaceX is racing to build out its Starlink satellite constellation to offer broadband internet commercially by the end of 2020.

 

Musk, in his tweet, also said he is a “huge fan” of small retail investors and will ensure they get top priority.

 

 

 

Walmart looking at up to $25 billion investment in Tata Group's 'super app' - Mint

BENGALURU (Reuters) - Walmart Inc WMT.N is in talks with Tata Group [TATAS.UL] for a potential investment of up to $25 billion in the Indian salt-to-software conglomerate's new "super app", the Mint newspaper reported on Tuesday, citing people familiar with the matter.

 

According to ongoing discussions between the two companies, the super app could be launched as a joint venture between Tata and Walmart, leveraging on the synergies between Tata's e-commerce business and Flipkart, Walmart's e-commerce unit, according to the report. (bit.ly/2EKxZuQ)

 

The news comes as Reliance Industries Ltd RELI.NS, controlled by Asia's richest man Mukesh Ambani, raised over $20 billion from investors including Facebook FB.O, Alphabet's GOOGL.O Google, KKR & Co KKR.N and Silver Lake Partners by selling stakes in its digital business Jio Platforms.

 

Separately, Bloomberg News reported Tata Group is in discussions with potential investors about stakes in its new digital platform. 

 

The Walmart investment could touch $20 billion to $25 billion eventually for a large stake in the proposed super app that will be hosted under a Tata Sons unit, according to the Mint report.

 

The super app, which is scheduled to be launched in India in December or January, will bring together Tata’s consumer business under one channel offering a wide range of products in the retail space, Mint said.

 

Tata’s consumer businesses include watch and jewellery brand Titan and fashion retail chain Trent.

 

Shares of Tata Consultancy Services TCS.NS, Tata Motors TAMO.NS and Tata Steel TISC.NS gained more than 1% each, with TCS the top boost to the Nifty 50 index.

 

If the Walmart deal goes through, it will top its investment in Flipkart, for which the U.S.-based company paid $16 billion for a 66% stake.

 

Mint said Walmart had hired Goldman Sachs as the banker for the proposed deal. Tata Group, Walmart and Goldman Sachs did not immediately respond to Reuters requests for comment.

 

 

 

Sanctions-hit Huawei ramps up investment in Chinese tech sector

SHANGHAI (Reuters) - Huawei Technologies has built up stakes in Chinese semiconductor companies and other tech businesses as the world’s largest telecoms equipment maker bolsters its supply chain in the face of pressure from the United States.

 

Habo Investments, set up by Huawei in April 2019, has closed 17 deals for stakes in Chinese tech companies since August last year, public records show.

 

The investment arm was established in response to what Huawei’s rotating chairman, Guo Ping, last week described as “suppression” by the United States after escalating restrictions that have cut off Huawei’s supplies of many overseas chips and effectively barred it from building its own.

 

“Since Huawei is only one company, we use investment and technology to help our supply chain partners become mature,” he said.

 

The company has emerged as a focal point in deteriorating U.S.-China relations with President Donald Trump’s administration alleging that its equipment could be used by Beijing for spying, which the Chinese company has denied repeatedly.

 

Huawei’s investment push also coincides with ramped-up government efforts to boost China’s semiconductor sector, which still lags behind leading chip producers including the United States, South Korea and Taiwan.

 

CHASING CHIPS

While the investments might help Huawei in the future, analysts say they have done little so far to address the supply chain gaps that are undermining its once-booming smartphone business and could eventually threaten its core network equipment operations.

 

“It will take a long time,” said one Chinese chip investor. “But they don’t have many good options, so they must turn to investing outside.”

 

Huawei declined to comment on the investment division’s operations.

 

Most of Habo Investment’s deals have been in chip-related Chinese start-ups, a few of which have become part of Huawei’s supply chain.

 

Vertilite, which was founded in 2015 and received an investment from Huawei this year, makes VCSEL sensors that support facial-recognition technology in cameras.

 

The company did not respond immediately to a request for comment, but one Vertilite investor said its sensors are used in a number of Huawei handsets.

 

 

However, many of the businesses Huawei has backed are at an early stage in their development.

 

“Most of these companies are small, niche players who are good at what they do, but they are not necessarily globally competitive,” said Ivan Platonov, who tracks China’s chip sector at research company EqualOcean.

 

Shoulder Electronics, for example, makes RF filters that enable wireless communications but has yet to achieve compatibility for advanced 5G phones.

 

A spokesman for the company, which received investment from Habo in January, could not be reached outside business hours on Monday.

 

3Peak, which also received investment from Habo this year, makes analogue-to-digital converters (ADC) used in wireless network base stations.

 

U.S. players dominate that market segment and 3Peak generated only 300 million yuan ($43.99 million) in revenue last year, according to a prospectus it issued before listing on Shanghai’s STAR market.

 

3Peak did not respond immediately to an emailed request for comment.

 

Habo’s portfolio also includes companies outside Huawei’s core telecoms operations. Several investments in chips, raw materials and battery technology companies point to ambitions in self-driving cars.

 

Late last month it also closed an investment in Open Source China, a Shenzhen-based business behind Gitee, a Chinese rival to U.S. coding platform GitHub.

 

Gitee did not respond immediately to an emailed request for comment.

 

Habo typically acquires stakes of 5-10%, filings show, though valuations have not been disclosed.

 

CHANGE OF PACE

The recent investments mark a change in pace and tactics for Huawei, ramping up the frequency of such deals and refocusing on domestic businesses rather than overseas companies.

 

In 2013, for example, Huawei acquired Ghent-based photonics company Calopia. The following year it purchased Neul, a British maker of chips for the internet-of-things sector.

 

“Huawei likes to do its own R&D. So investment or acquisition was done only as a last resort, and that was why it tended to be towards U.S. or European technology companies,” said one former Huawei staffer who helped to scout acquisition targets.

 

($1 = 6.8203 Chinese yuan renminbi)

 

 

 

 

Pandemic spurs Africa's mobile telcos to ramp up banking bid

JOHANNESBURG/ABIDJAN (Reuters) - When COVID-19 hit Ivory Coast, Bonaventure Kra, who works at an import-export business, began to worry. Handling hard cash all day was a risk. Queuing in crowded bank branches exposed him to infection.

 

 

People are pictured at a bank of the French mobile operator Orange in Abidjan, Ivory Coast, September 18, 2020. Picture taken September 18, 2020. REUTERS/Macline Hien

Then, in the midst of the pandemic, French telecommunications giant Orange ORAN.PA launched an entirely digital bank - its first full banking venture in Africa.

 

“Going back to cash would be like travelling back in time,” Kra said in the country’s commercial capital, Abidjan. “I intend to use it permanently.”

 

Africa’s mobile phone operators are ramping up plans to bring banking to millions of Africans, in some cases for the first time, after the coronavirus crisis caused a surge in use of digital financial services.

 

Orange, MTN MTNJ.J, Telkom TKGJ.J and Vodacom VODJ.J are lowering fees, rolling out new lending services ahead of schedule, and expanding mobile payment networks with the aim of finally denting the so-far unshakeable dominance of cash.

 

“It’s one of those industries that we consider to be ripe for disruption,” Sibusiso Ngwenya, financial services managing executive at South Africa’s Telkom, told Reuters.

 

With their revenue under threat as governments cap data prices and customers abandon voice phone services for free messaging apps, telcos have sought to leverage their reach into remote villages and urban shanty towns in a pivot to banking.

 

The global health crisis has been an unexpected catalyst, with some African governments releasing COVID-19 stimulus grants via mobile money platforms and central banks easing regulations, including limits on mobile transactions.

 

Orange added over five million new customers for its mobile money services in April and May alone. MTN hit one million South African users in June, when it had expected half of this, and recorded a 28% jump in mobile money transactions per minute across all its African markets in the first half of the year.

 

TAKING ON THE CASH KING

Cash is still king in Africa.

 

It accounts for around 99% of transactions in Nigeria, the continent’s most populous country, and dominates even in South Africa (90-95%) where banking penetration is relatively high, according to a 2017 estimate from consulting firm McKinsey.

 

World Bank figures indicate just under 43% of sub-Saharan Africans over the age of 15 had a bank account in 2017. The region’s total population stood around 1.1 billion last year.

 

That compared with 55% in Latin America and the Caribbean, almost 70% in South Asia and around 74% in East Asia and the Pacific.

 

That presents a huge opportunity, said Francois Jurd de Girancourt, head of McKinsey’s financial institutions practice Africa. Prior to the crisis, it rated the continent as the world’s No.2 market in terms of growth and profitability potential with banking revenues set to hit $129 billion by 2023.

 

Telcos are well-positioned to secure a piece of that pie.

 

By last year, sub-Saharan Africa boasted 469 million mobile money accounts - more than any other region in the world - according to industry body GSMA.

 

Mobile phone penetration outstrips access to banks. Operators’ distribution models are low-cost. And telcos possess a wealth of customer data they can use to assess lending risk, a big advantage in a region where most markets lack credit bureaus.

 

Vodacom, the African unit of Britain's Vodafone VOD.L, is now moving to expand lending, insurance and payment businesses currently available only in South Africa to other markets.

 

It has advanced by months launches of initiatives like overdrafts for the mobile money agents that work on its behalf, helping customers open accounts and withdraw and deposit cash.

 

It has also accelerated plans for cash advances to merchants at registered pay points, its financial services CEO Mariam Cassim told Reuters.

 

Orange has Mali, Burkina Faso, and Senegal in its sights as expansion markets for Orange Bank Africa, with the timetable dependent upon local regulatory approval.

 

Both MTN and Telkom, meanwhile, are preparing to offer micro-loans in South Africa, the companies said.

 

MTN, Africa’s largest operator, will roll out a mobile money offering for businesses, which is currently being piloted in Rwanda, to other markets by the end of the year. It will also pilot an initiative to digitise cash-heavy small businesses in South Africa, namely small shops known as spazas and often located in townships, executives told Reuters.

 

And after growing the number of vendors accepting payment via its platform by 100,000 in the first half of the year, it has now doubled an end-2021 target to 1 million.

 

“We are ... using the opportunity that the crisis is offering us to really accelerate,” said Serigne Dioum, who heads MTN’s mobile financial services division.

 

‘NO LOSERS’

 

Mobile operators still have a long way to go to overtake traditional lenders.

 

Banking revenue pools in sub-Saharan Africa stood around $70 billion in 2019, according to a McKinsey estimate, while the main mobile operators earned less than $3 billion from financial services.

 

Some regulators remain wary of mobile money, and many informal businesses still don’t accept digital payments.

 

Such factors mean mobile money adoption varies wildly across the continent. Cash use actually rose in some countries during the pandemic.

 

M-Pesa, run by Vodacom unit Safaricom SCOM.NR, dominates the financial system in Kenya. But both MTN and M-Pesa have in the past been forced to drop mobile money initiatives in South Africa after struggling to attract customers.

 

“You need a massive market share to be making a lot of money just from payments,” said McKinsey’s Jurd de Girancourt, adding that telcos will need customers to use other services too.

 

“It’s fine if you are M-Pesa. But we’re probably not going to see that,” he said.

 

Big banks, historically deterred by low incomes and poor infrastructure, are also fighting back and pushing into underserved segments.

 

They are agreeing partnerships with fintech firms, building their own networks of agents to distribute banking services and launching rival offerings.

 

They also partner with telcos, marrying their vast balance sheets with the mobile firms’ wide customer bases.

 

South African lender Absa ABGJ.J is set to launch partnerships with mobile operators in Tanzania and Uganda, its head of retail banking in Africa Vimal Kumar told Reuters.

 

Absa is also expanding its Kenyan digital offering to cover full-service banking with roll-outs in Zambia, Botswana and Mauritius set for later this year and the rest of its markets in 2021.

 

“There is no loser,” Kumar said. “The opportunity is so large that no one player is going to be able to dominate.”

 

 

 

 


 


 


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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