The Daily Economic and Business News Update 29-11-12

8/11/2019 The Daily Economic and Business News Update 29-11-12

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Business and General Economic News

1. Treasury in September 2012 made payments amounting to close to $11,5 million to various

international institutions it owes, including the International Monetary Fund (IMF). Statisticscontained in the consolidated statement of financial performance for September show that the

government made a payment to IMF of $2,5 million. China Export-Import Bank was paid $6,7

million, Africa Export-Import Bank was paid $2 million and $143 000 to the Arab Bank for

Economic Development in Africa. (News Day)

2. Zimbabwe plans to amend its Banking Act after repeated attempts to sell Treasury bills failed

to attract bids at rates acceptable to the central bank and Finance ministry, Finance minister

Tendai Biti has said. Ive written foreign banks off, theyre not worth their salt, Biti said.

That iswhy we are amending the Banking Act. He declined to elaborate on the changes he

plans to make, though he said in his November 15 Budget speech that the government would

step in to regulate banks after the misadventures with T-bills. (News day)

3. Zimbabwes policy to control interest rates and bank charges will result in increased financial

exclusion as most banks will snub smaller depositors, said Kingdom Bank Limited (Kingdom)

a major player in the countrys financial sector.A fortnight ago, Finance minister Tendai Biti

barred banks from levying charges on deposits of $800 and below while he also ordered the

institutions to pay a minimum 4% per annum interest on deposits of $1 000 and more held for

at least 30 days. (Daily News)

4.

Farmers who defaulted on loans from local banks risk going out of business due to the

punitive penalty interest rate regimes used by some financial institutions. Some maize and

wheat farmers who failed to repay loans taken in the 2010/11 agricultural season said

unfavourable weather affected their yields, but banks have declined requests for a new


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repayment plan. Instead, banks are attaching assets which farmers had used as security,

leaving them with no collateral for further borrowings. (Business Herald)

5. The Zimbabwe Manpower Development Fund has over the past 18 months spent US$50

million on training apprentices and workers in formal employment, Zimdef Chief Executive, Mr

Frederick Mandizvidza has said. In a speech read on his behalf by Zimdef principal director for

finance and administration, Nicholas Mapute, at a Business Ethics Symposium held in Harare

recently, Mr Mandizvidza said US$9 million had been used for training 3 800 apprentices

countrywide. (Business Herald)

6. Members of Parliament are pushing for the enactment of a new law compelling mining

companies to comply with a supply-based empowerment model, it has been learnt. In its post

budget analysis, the Parliamentary Portfolio Committee on Mines and Energy said the

government should craft legislation that favours local suppliers. This comes as most

companies have submitted their plans to comply with the countrys equity laws compelling

foreign-owned companies to sell 51% to locals. (News Day)

7. Government should promote exports of finished products by offering incentives in order to

reduce the countrys trade deficit, an official said. Parliamentary Portfolio Committee on

Budget, Finance and Investment Promotion chairperson Mr Paddy Zhanda said this in

Parliament during debate on the 2013 National Budget. Mr Zhanda said his committee was

concerned with the high trade deficit and was urging the Government to explore ways of

curtail it. The countrys trade deficit continues to widen, even the committee feels that we

need to incentivise our exporters in one way or the other to encourage them to export their

goods, particularly those that deal with finished products, he said. (Business Herald)


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8. Individuals and companies selling bulk water from bowsers and in bottles should obtain

permits from the Zimbabwe National Water Authority (Zinwa) to ensure the health of citizens

is protected, a Cabinet Minister said. Water Resources, Development and Management

Minister Sipepa Nkomo said the companies should comply with regulations and standards that

Zinwa stipulates. This enables monitoring the quality of the water being sold to consumers to

ensure the health of the people, he said. Minister Nkomo said registration would enable

Zinwa to monitor the ground water levels to ensure that water was being abstracted at a

sustainable rate. (ZBC News)

9. One of the sectors, which tend to respond instantly to economic dynamics, is without doubt

the financial service sector. It seems the old adage that, banks take the umbrella when it is

raining and lends it when it is calm, seems to be holding water. Banks by nature thrive on

confidence and trust ahead of economic facts and figures. An average of 25 banks, in a US$5

billion economy with a US$10,7 billion external debt, and 85% unemployment makes an

interesting subject for debate. Developments in Africa are somehow unimpressive. Global FDI

flows which declined sharply from its peak of US$2,3 trillion in 2007 to US$1,39 trillion in

2009, recovered by about 3 percent to US$1,43 trillion in 2010. (Business Herald)

10.MWANA Africa Plc has announced further significant intersections of high grade nickel

sulphides at Bindura Nickel Corporation subsidiary Trojan Mine after an underground drilling

programme at the mine. This is the second tranche of drilling results from Trojan since the

successful recapitalisation and restructuring of BNC was completed in September 2012,

Mwana Africa said. Key nickel intersections include 10,7m at 11,02% Ni from 368,7m (BH 35-

0-70), 18,41m at 7,42% Ni from 284m (BH 35-0-82), 35,75m at 9,44% Ni from 177m (BH 35-

0-83), 24m at 1,96% Ni from 182m (BH 350- 85), 18,4m at 1,22% Ni from 137,6m (BH 35-

0-86). (Business Herald)


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11.Diamond producer Marange Resources (Marange) plans to ramp up its production by two-fold

next year as international demand for the precious mineral continues to soar. The company

100 percent owned by the Zimbabwe Mining Development Corporation (ZMDC) said it has

grown its production from a mere 10 tonnes per hour dense medium separation plant capacity

to the current 115 tonnes within two years. Obed Dube, Marange chief executive, said the

company now has the capacity to boost production after acquiring state-of-the-art diamond

recovery equipment. He refused to disclose the amount invested. (Daily News)

12.National carrier Air Zimbabwe has stepped up efforts to regain its status as a safe and reliable

airline with the successful reintroduction of the Harare-Johannesburg flight. Since the return

of Air Zimbabwe, travellers have been the biggest winners as they are paying very affordable

rates and enjoy a bigger baggage allowance. The return fare to Johannesburg has been

slashed to US$317 return and the baggage allowance is 40kg giving travellers an opportunity

to shop and ferry their goods at a reasonable cost. Other airlines that were capitalising on the

absence of Air Zim over the years were charging up to US$600 for the same trip. (Business

Herald)

13.

National carrier Air Zimbabwe has stepped up efforts to regain its status as a safe and reliable

airline with the successful reintroduction of the Harare-Johannesburg flight. Since the return

of Air Zimbabwe, travellers have been the biggest winners as they are paying very affordable

rates and enjoy a bigger baggage allowance. The return fare to Johannesburg has been

slashed to US$317 return and the baggage allowance is 40kg giving travellers an opportunity

to shop and ferry their goods at a reasonable cost. Other airlines that were capitalising on the

absence of Air Zim over the years were charging up to US$600 for the same trip. (Business

Herald)

14.Justice Minister, Patrick Chinamasa has discounted the economic benefits of South Africas

retail giant Pick n Pays investment in the countrys retail sector, which he said must be

reserved for locals.Addressing delegates at a national economic empowerment conference in


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Harare yesterday, Chinamasa said the participation of foreign-owned retail chains on the

domestic market would not grow the economy on the back of a ballooning import bill. Experts

say Zimbabwe needs more foreign direct investment to ease the liquidity constraints besetting

the economy. Pick n Pay opened its first branch in the country in June after injecting $1, 5

million. (News Day)

15.Zimbabwe Council for Tourism (ZCT) says its members are working hard to show off the best

of Zimbabwe during the United Nations World Tourism Organisation General Assembly

meeting set for August 2013.

President of the apex body Glenn Stutchbury said their members

were gearing to showcase the country to the worlds travel industry leaders, policymakers and

media. ZCT brings together seven different associations within the tourism sector. (News Day)

16.Government's revised Distressed Industries and Marginalised Areas Fund (Dimaf) will also bail

out companies under judicial management, the Fund advisor Eric Bloch said. This follows

consultations between government and banks involved as the companies, which were

described as dead by Finance minister Tendai Biti, were not considered as beneficiaries of

the bailout package. CABS is one of the institutions involved in disbursing the $40 million

Fund. Having discussed these things with Cabs managing director and with ministers

Welshman Ncube and Biti, I believe we are going to see a different Dimaf in the coming six

weeks, Bloch, who is also a leading independent economist.(Daily News)

Regional News

1. South Africa's Bidvest Group has offered to buy the remaining 72% stake in Amalgamated

Appliance Holdings it does not already own, in a $61 million cash deal. Bidvest, a sprawling

conglomerate with interests in everything from catering to car sales, has offered 3.50 rand a

share for the distributor and retailer of household appliances, the two companies said in a

statement. The offer represents a 10% premium to Amalgamated Appliance's closing price on

Tuesday. (Reuters)


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2. The rand declined for the first time in five days after South African Reserve Bank Governor Gill

Marcus said economic growth is likely to remain low. Bond prices dropped for the first time in

three days. The currency of Africas biggest economy depreciated 0.4% to 8.8677 per dollar at

4:08 p.m. in Johannesburg. Yields on benchmark 10.5% rand bonds due December 2026 rose

two basis points to 7.58%. (Bloomberg)

3. Mining and resources stocks lost ground due to lower commodity prices on Wednesday 28

November dragging the JSE lower in line with global markets as a lack of progress on the US

fiscal cliff issue and concerns about the long-term Greek debt problem weighed on globalinvestor sentiment. At 17:00 the All Share [JSE:J203] index was down 0.97% to 37 438.41

points with the Top 40 - (Tradeable) [JSE:J200] index dropping 1.06%. The platinum and

bullion indices gave up 2.85% and 2.63% respectively. (Fin24)

4. The trade and industry department on Wednesday withdrew proposed changes to the broad-

based black economic empowerment (BBBEE) codes on socio-economic development. "The

decision comes after several stakeholders expressed concern that Statement 500 has been

interpreted to mean that charities will be adversely affected," the department said in a

statement. The department said it had previously indicated it would correct any unintended

interpretation after the consultation period ended on December 5. (Fin24)

5. The South African manufacturing sector is in a crisis which requires changes in the country's

policies, the Manufacturing Circle said. "The sector has lost 300 000 jobs since 2010. The

recession has been biting; we have also had a recession in the construction sector which has

hit us severely, and then the flood of imports," chairperson Stewart Jennings said in

Johannesburg. (Fin24)

6. South Africas Reserve Bank Governor, Gill Marcus has defended the independence of the


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institution, telling trade unionists firmly that nationalising the Bank would be a mistake she

would "not be party" to. The National Union of Metalworkers of South Africa (Numsa) has

been pushing for the nationalisation of the Bank on the basis that it made "pro-business"

decisions that were contrary to the interests of the working class. (BD Live)

7. The Manufacturing Circle, an industry representative body, is urging the African National

Congress (ANC) to take steps to slow an influx of cheap Asian imports which its members say

is putting them out of business. It also wants the ANC to adopt measures at its Mangaung

electoral conference next month to stem the volatility of the rand and keep it within a range

that will make local exports competitive. (BD Live)

8. Kenya's inflation rate is expected to edge down this month but it may be close to bottoming

out after an 11-month dive that has allowed the central bank to slash interest rates. All but

one of the 11 analysts polled by Reuters predicted the year-on-year inflation rate would fall to

a consensus forecast of 3.95% in November from 4.14% last month, laying the ground for

another 100-150 basis point cut in official borrowing costs in January. The forecasts for

inflation, due for release on Friday, ranged from 3.0% to 4.25%. (Reuters)

9. The Kenyan shilling held steady on Wednesday 28 November but its outlook remained bearish

due to importer demand for dollars amid a wide current account deficit, while Safaricom

weighed on shares further. At the 1300 GMT market close, leading commercial banks posted

the shilling at 85.90/86.00 per dollar, unchanged from the previous day's close. "We could

take out 86.00 and head to 86.50 against the dollar," said Christopher Muiga, a senior trader

at Kenya Commercial Bank. "Demand will definitely outweigh supply and the current account

deficit keeps growing and this will definitely lead to a weaker currency." (Reuters)

10.

Nigerias privatization of state- owned companies faced uncertainty after the head of the

Bureau of Public Enterprises was fired with key sales yet to be concluded, analysts from


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Financial Derivatives Co. and Standard Bank Group Ltd. said. Bolanle Onagoruwa was asked to

quit with immediate effect yesterday and hand over to her deputy, according to a statement

released by Vice President Namadi Sambos office in Abuja, the capital. No reason was given

for the decision. Chukwuma Nwoko, a spokesman for the agency, also known as BPE, said

today it was a presidential directive that had to be obeyed and declined to comment further.

(Bloomberg)

11.

The Ghana Revenue Authority (GRA) from January 2015 will not have the sole mandate to

determine the tax returns of businesses in the country. Businesses will be expected to asses

themselves and declare their returns. This move according to the GRA, aimed at checking

inadequacies in the present tax regime. Taxpayers will soon be given the responsibility toaccurately compute and report their tax liability to the Ghana Revenue Authority, under the

self-assessment regime. (GhanaWeb)

12.Vodafone Ghanas controversial capped fixed broadband packages begin today for all new

customers, but would start on December 16, 2012 for existing customers. This means all new

customers who sign on to Vodafones browser, streamer or downloader fixed broadband

packages from today would have respective caps at the increased prices. Browsers would pay

GHC65 for a maximum 15GB, Streamers would pay GHC100 for 25GB and Downloaders would

pay GHC200 for 60GB for one month. (GhanaWeb)

13.The Reserve Bank of Malawi (RBM) is equipping commercial bank staff responsible for credit

and operational risk management on how to quantify credit and operational risks according to

the Basel II minimum capital requirement. Speaking during the opening ceremony of a

weeklong workshop in Mangochi on Monday, RBM Director for Bank Supervision, Noel

Mkulichi, said credit and operational risks are major risks which exist inherently in all banking

institutions. (Daily Times)

14.The Mozambican government has called on building companies to invest in housing aimed at


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the lower middle class. The call came from the Minister of Public Works and Housing, Cadmiel

Muthemba, during a conference and exhibition, entitled Mozambuild, which opened in

Maputo on Tuesday. Muthemba stressed that the Mozambican population is overwhelmingly

young, and that young people face serious problems in buying or renting their first home.

(The Club Of Mozambique)

15.The Mozambican authorities have approved private sector projects budgeted at 1.2 billion US

dollars to be implemented in the Nacala Corridor, in the north of the country, according to

Danilo Nala, general director of the Office for the Accelerated Development Economic Zones

(GAZEDA), cited in Wednesdays issue of the Maputo daily Noticias.At the same time, 500

million dollars have been mobilized for the public sector, including the rehabilitation of theNacala dam, and of the citys water supply system, its electricity supply and its

telecommunications, creating 7,000 jobs. (The Club Of Mozambique)

16.The Fund for the Pro-Savana Development Initiative has approved its first package of

financing for companies operating in the agro-business value chain in the broad Nacala

Corridor in northern Mozambique. Pro-Savana is a triangular development programme

between the Mozambican Ministry of Agriculture, the Brazilian Cooperation Agency (ABC), and

the Japanese International Cooperation Agency (JICA) aimed at the agricultural and rural

development of areas along what is known as the Nacala Corridor (which runs from the port

of Nacala across broad expanses of Nampula and Niassa provinces to landlocked Malawi).

(The Club Of Mozambique)

17.Mozambican President Armando Guebuza took the example of the Cahora Bassa dam, in the

western province of Tete, to show how natural resources should benefit the entire country,and not just those who live where the resources are found. Speaking in the town of Songo,

during celebrations of the fifth anniversary of the passage of Hidroelectrica de Cahora Bassa,

the company that runs the dam, into majority Mozambican ownership, Guebuza said that

Mozambican control of the dam had led to a great increase in the number of Mozambicans,


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throughout the country, who are benefitting from the power it produces. (The Club Of

Mozambique)

18.The World Bank approved a $500m loan to Tunisia to help it recover from the Arab Spring

uprising that toppled the former regime, with another $700m loan coming from other donors.

The loan, the World Bank's second since the revolution, aims to support Tunisia's economic

recovery by providing funds to improve the business and financial sectors and reform social

services, which are vital for reducing inequality. The World Bank said the European Union and

the African Development Bank are giving a further $700m to support Tunisia's transition.

(Fin24)

International News

1. BP has been temporarily suspended from new contracts with the US government, the

Environmental Protection Agency (EPA) has said. While it is unclear how long the ban will last,

it follows BP's record fine earlier this month over the 2010 oil spill in the Gulf of Mexico. The

EPA said it was taking action due to BP's "lack of business integrity" over its handling of the

blowout. But BP said it had spent $14bn (8.8bn) on its response to the spill. (BBC News)

2. The world's second-biggest mining group, Rio Tinto, has announced plans to slash its costs by

$5bn (3.2bn) over the next two years. The cuts come as slowing global demand and a fall in

commodity prices have hurt profits at mining firms. There have been concerns that demand

for commodities may dip further in wake of economic problems in the US and Europe and

slowing growth in China. Other miners, including BHP Billiton, have also announced cost-

cutting plans. (BBC News)

3.

Billionaire investor Warren Buffett believes the US fiscal cliff may be solved by January rather

than December. Congress has until 31 December to cut a deal to stop existing economic

stimulus measures terminating and huge automatic spending cuts coming into effect. While Mr

Buffett said politicians may miss the deadline, he thought a deal would follow shortly after. On


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Tuesday Senate majority leader Harry Reid said talks had made "little progress", sending stock

markets lower. (BBC News)

4. Its been the little engine that could, driving along an economy long struggling to avert a

double-dip recession. And now, amid growing signs that the U.S. economy is clearly on the

mend, industry leaders are increasingly confident the auto industry is heading in fast-forward

toward some extremely goodthough probably not recordyears. As manufacturers get set

to report extremely strong numbers for October, Toyotas top American executive, Jim Lentz

said he expects to see 2012 end with sales of 14.3 millionabout 1 million more than a year

before and a roughly 40 percent increase from the depths of the recession. (NBC News)

5. The U.S. economy trucked along at a "measured" pace in recent weeks and hiring remained

modest, according to a Federal Reserve report that did little to calm concerns about slow

growth and high unemployment. Details from the manufacturing sector were mixed, the Fed

said in its Beige Book report on Wednesday. Contacts in five of the Fed's 12 districts reported

worries about the outlook for 2013, predicated in part on concerns about a looming "fiscal

cliff" contraction in the U.S. government's budget. (NBC News)

6.

The world economy is in its best shape in 18 months as Chinas prospects improve and the

U.S. looks likely to avoid the so-called fiscal cliff, according to the latest Bloomberg Global Poll

of investors. Two-thirds of the 862 surveyed described the global economy as either stable or

improving. Thats up from just over half who said that in September and is the most since May

2011. (Bloomberg)

7.

BP has sold its stakes in several North Sea oil and gas fields to a state-owned Abu Dhabi

energy group for $1.06bn (663m). Prime Minister David Cameron said the deal highlighted

the "North Sea's position as a global energy hub". The proceeds from BP's sale will help cover

billions of dollars in costs from the 2010 Gulf of Mexico oil spill. Abu Dhabi National Energy

(Taqa) will acquire stakes in the BP-operated Harding, Maclure and Devenick fields. (BBC


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News)

8.

The European Commission has approved the Spanish government's plans to restructure four

troubled banks. Bankia, NCG and Catalunya Banc must cut their loans and investments by

over 60% in the next five years, shut half their branches and shed thousands of staff. A fourth

bank that was in the worst shape, Banco de Valencia, is to be sold to the privately owned

Caixa Bank. The agreement means the banks will now get almost 40bn euros (32bn; $52bn)

in loans from eurozone bailout funds. "Our objective is to restore the viability of banks

receiving aid so that they are able to function without public support in the future," the

European Competition Commissioner Joaquin Almunia said. (BBC News)

9. Megafon, the mobile phone operator controlled by Russia's richest man, has raised $1.7bn

(1.1bn) from a share sale in Moscow and London. Pricing shares at the bottom of its $20-$25

range, the sale values Megafon at $11.1bn. The listing is the biggest by a Russian company

since aluminium producer Rusal raised $2.2bn in Hong Kong in 2010. Russia's second biggest

mobile operator is controlled by Alisher Usmanov, a 30% stakeholder in Arsenal football club.

The shares are listed in London as global depository receipts, which are issued by a bank that

holds the shares on behalf of the investor. (BBC News)

10.Dutch Prime Minister Mark Rutte said Greece may need more financial help to stay in the

euro, retreating from a hard line that included a willingness to consider the countrys exit from

the currency bloc. Echoing his German allies, Rutte declined to speculate on Greece leaving

the 17-nation euro. Wolfgang Schaeuble, the German finance minister, is entirely right that

you have to take a view on the situation of Greece every couple of years again, whether we

are on track and whether extra steps have to be taken, Rutte said in an interview.

(Bloomerg)

11.Swiss National Bank President Thomas Jordan said the franc remains high and weighs on

companies in Switzerland. The franc at its current level still has a high value, Jordan said.


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This burdens a lot of companies -- especially in a phase of moderate global economic

growth.The SNB, which introduced a minimum exchange rate of 1.20 francs per euro in

September 2011, has piled up foreign-currency reserves worth 424 billion francs ($454 billion)

defending that ceiling. The SNB has enforced this franc cap with determination and is

prepared to buy foreign currency in unlimited quantities, Jordan said. (Bloomberg)

12.The European Union is quarreling over thresholds on how big euro-area lenders must be in

order to be designated for direct oversight by the European Central Bank, according to draft

proposals. Nations are at odds over three different size thresholds, according to the document

drawn up by Cyprus, which holds the EUs rotating presidency. Some countries are seeking to

set the bar as low as banks with more than 2.5 billion euros ($3.2 billion) in assets, whileothers are calling for divisions at 20 billion euros or 60 billion euros, according to the text,

dated Nov. 27 and obtained by Bloomberg News. (Bloomberg)

13.BFA-Bankia (BKIA), the biggest Spanish bank set to receive European bailout funds, will cut

about 6,000 jobs, or more than a quarter of its workforce, and forecast a 19 billion-euro ($25

billion) loss for this year. Bankia will also sell 50 billion euros of assets through 2015, force

losses on subordinated debt holders and reduce its branch network by 39%, the Valencia,

Spain-based company said today. The European Commission approved the restructuring plan

as a condition for the 18 billion euros of European bailout funds Bankia is set to receive.

(Bloomberg)

14.Japans retail sales fell in October by the most in 11 months as consumers purchased fewer

cars and televisions, adding pressure on the government to stimulate an economy that may

be entering a recession. Sales fell 1.2% from a year earlier, the Trade Ministry said in Tokyotoday, after a 0.4% advance in September. The median estimate of 10 economists surveyed

by Bloomberg News was for a 0.8% decline. From a month earlier, sales increased 0.7%.

(Bloomberg)


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15.South Korean manufacturers confidence fell to the lowest level in more than three years as

gains in the won threaten to slow a rebound in exports and the country prepares to vote for a

new president next month. An index measuring expectations for December fell to 67 from 70for November, the lowest since April 2009, the Bank of Korea said in a statement in Seoul

today. A reading below 100 indicates that pessimists outnumber optimists. (Bloomberg)

16.Indonesia, the worlds biggest producer of palm oil, is set to surpass India as the largest user

next year as economic growth boosts demand. Consumption may climb 13% to 8.5 million

metric tons from 7.5 million tons this year, Indonesias Deputy Trade Minister Bayu

Krisnamurthi said by text message. That exceeds U.S. government estimates of 7.95 million

tons for India and 7.87 million tons for Indonesia in the 2012-2013 year. (Bloomberg)

17.

Argentina, which is locked in a court battle over its debt, has received more time to argue

against paying investors over its defaulted debt. The nation is appealing against a US ruling

ordering it to pay $1.3bn (800m) to foreign creditors holding bonds that it defaulted on in

2001. Argentina had been given until 15 December to reimburse the hedge funds, which

shunned two previous debt swaps. But the New York court has now granted a stay while itsappeal is heard. (BBC News)

18.

Australian business investment slowed less than economists forecast last quarter as stronger

mining spending outweighed a decline in manufacturing. Capital spending gained 2.8% from

the second quarter, when it rose 3.4%, the Bureau of Statistics said in Sydney today. That

compares with the median forecast for a 2% gain in a Bloomberg News survey of 20

economists. (Bloomberg)

19.Brazil signaled it plans to keep its benchmark rate at a record low for the longest period in


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history to prop up an economy heading toward its worst two-year performance in a decade.

Policy makers last night kept the Selic rate at 7.25%, ending the second-longest streak of

reductions in an effort to prevent inflation from accelerating. The unanimous decision, which

was forecast by all 75 economists surveyed by Bloomberg, took into account thethe balance

of risks for inflation, the board said in its statement, which was almost identical to last

months announcement. (Bloomberg)

The Daily Economic and Business News Update 29-11-12

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