The Daily Economic Update

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The Daily Economic and Business News Update, Thursday, 20 June 2019

Foreign Currency, Money, Equities & Commodities Markets Overview

Foreign Currency Markets International Stock Markets Year–On-Year Inflation Rates Currency 20-06-19 19-06-19 Index 19-06-19 18-06-19 Change Country Rate USD/RTGS 6.2100 6.2100 Dow Jones 26,504.00 26,465.54 +0.15% Zimbabwe 97.85%May USD/ ZAR 14.2812 14.5066 NASDAQ 7,987.32 7,953.88 +0.42% South Africa 4.5%May May EUR/ USD 1.1274 1.1199 FTSE All Share 4,040.93 4,060.63 -0.49% Malawi 8.9% GBP/USD 1.2695 1.2552 Nikkei 225 21,480.17 21,342.60 +0.64% Zambia 16 8.0% May USD /BWP 10.6838 10.7759 DAX 12,308.53 12,331.75 -0.19% Botswana 2.6% May Old Mutual Implied Exchange Rates Mozambique 2.42%May Currency 19-06-19 18-06-19 May 2019 Apr 2019 Mar 2019 Feb 2019 Namibia 4.1% May USD/ZWL 10.4649 10.5709 9.7191 6.1291 5.4150 4.4057 Kenya 5.49% May ZWL/ZAR 1.4058 1.3948 1.2609 1.2938 1.3073 3.1868 Ghana 9.4% May Regional Stock Markets Nigeria 11.4%May Index 19-06-19 18-06-19 Change Interest rates 19-06-19 Brazil 4.66%May ZSE Industrial Index 729.64 731.22 -0.22% SARB Prime Rate 10.25% China 2.7%May ZSE Mining Index 282.64 266.63 +6.00% BOB Prime Rate 5.00% Canada 2.0%Apr ZSE All Share 218.77 219.03 -0.12% LIBOR One Month 2.383% Germany 1.4%May JSE All Share 58,564.72 58,629.09 -0.11% LIBOR Three Month 2.387% Australia 1.3%Apr Ghana SE-CI 2,398.06 2,397.95 +0.11% LIBOR One Year 2.264% U.K. 2.1%Apr Nairobi All Share 147.53 148.50 -0.65% Federal Discount Rate 1.000% Japan 0.9% Apr Nigeria All Share 29,772.72 29,818.80 -0.15% Federal Prime Rate 3.500% U.S.A. 1.8%May Last Daily YTD YTD Issued 19-06-19 18-06-19 Traded Change Change Change Zimbabwe Market Cap. ZSE Counter (US$) (US$) (US$) (US$) (US$) (%) Shares (US$) ZB Financial Holdings 0.49 0.49 0.49 0.000 +0.13 +36.11% 175,190,642 85,843,414.58 First Capital Bank Limited 0.0871 0.0801 0.0801 +0.007 +0.0271 +45.17% 2,156,260,176 187,810,261.33 CBZ Holdings Limited 0.5 0.4537 0.4537 +0.0463 +0.35 +233.3% 687,231,691 343,615,845.50 Econet Wireless Zimbabwe 2.0365 2.2404 2.2404 -0.2039 +1.1365 +126.3% 2,590,577,000 5,275,710,060.50 FBC Holdings Limited 0.6025 0.5025 0.5025 +0.1 +0.4025 +201.3% 671,949,927 404,849,831.02 Fidelity Life Assurance 0.11 0.11 0.11 0.000 0.000 0.00% 108,923,291 11,981,562.01 Get Bucks 0.12 0.12 0.12 0.000 +0.083 +224.3% 1,093,567,251 131,228,070.12 NMBZ Holdings Limited 0.28 0.28 0.28 0.000 +0.19 +211.1% 392,954,830 110,027,352.40 Old Mutual Plc 15.5 15.5 15.5 0.000 +10.8 +229.8% 64,173,594 994,690,707.00 First Mutual Holdings 0.18 0.18 0.18 0.000 -0.015 -7.69% 690,143,060 124,225,750.80 Mashonaland Holdings 0.041 0.041 0.041 0.000 +0.0064 +18.50% 1,859,073,947 76,222,031.83 ZSE Gainers ZSE Losers 19-06-19 Previous 19-06-19 Previous Counter (US$) (US$) Change (%) Counter (US$) (US$) Change (%) FBC 0.6025 0.5025 +19.90% Econet 2.0365 2.2404 -7.36% Truworths 0.0241 0.0202 +19.31% Cassava 2.1866 2.1996 -0.59% SeedCo Int 2.1525 1.8525 +16.19% Delta 3.8983 3.8999 -0.04% CBZ 0.5000 0.4537 +10.20% International Commodity Prices +0.042% ZSE Market Data Index 19-06-19 18-06-19 Commodity 19-06-19 18-06-19 Jan 19 Jan 18 Turnover Value ($m) 7.6894 10.6347 Gold (US$/oz) 1,359.90 1,345.90 1,283.50 1,317.10 Foreign Buys ($m) 0.1138 5.1017 Platinum (US$/oz) 810.00 802.00 792.00 942.00 Foreign Sales ($m) 0.0912 2.9420 Silver ( US$/oz) 15.130 14.960 15.470 17.150 Market Cap ($m) 28,940.02 29,166.87 Palladium ( US$/oz) 1,484.00 1,460.00 1,252.00 1,086.00 YTD Change (Market Cap) +50.81% +51.99% Brent Crude Oil (US$/barrel) 61.82 62.14 53.80 66.55

Disclaimer: This document may be legally privileged and/or confidential and has been prepared for informative purposes only. No liability whatsoever for any loss howsoever arising from the use of this review or its contents or otherwise arising in connection therewith shall be accepted by ZB Financial Holdings, any of its directors, employees, or associates. Any person who makes use of this document shall be solely responsible for making his or her own independent investigation of the issues discussed in this report. ZB Financial Holdings accepts no responsibility whatsoever for the accuracy or completeness of the information contained in this document.

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Local Business News

1. President Mnangagwa says the African Continental Free Trade Agreement (AfCFTA), a trade pact envisaged to create a single market, is “a step forward” likely to promote inclusive growth and enable African countries to jointly work towards achieving a prosperous future. As part of his intervention during the US-Africa Business Summit’s plenary session titled “Advancing a resilient and sustainable US-Africa partnership” yesterday, the President said the new trading regime that will result from the roll-out of the trade agreement, requires African countries to work together to ensure that “we do not leave any single country behind”. “We have moved forward now to create a continental free trade area. The reason is that we don’t need to leave any single country on the continent behind. We need to work together,” said President Mnangagwa. (Herald)

2. Government is seeking lines of credit to support the manufacturing sector as it moves to capacitate the key sector to enable it to increase exports across the continent. Critically, the move will allow companies to compete in the African Continental Free Trade Agreement (AfCFTA), a trade pact that is expected to create a single market in Africa, which came live on May 30. Officiating at the National Forum on the AfCFTA in Harare yesterday, Foreign Affairs and International Trade Secretary Ambassador James Manzou said exports are seen as important to national development across the world, hence the deliberate decision by government to support local manufacturers. (Herald)

3. Zimbabwe has potential to earn more than US$140 million annually from exporting cattle semen following the recent launch of a production facility in Chinhoyi. Built by the Chinhoyi University of Technology (CUT), the state-of-the-art facility has an integrated system that produces and stores at least seven million semen straws per year, Higher and Tertiary Education, Science and Technology Development Minister Amon Murwira said in an interview yesterday. Currently, the country requires 1.5 million straws for artificial insemination, leaving the remainder for the

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export markets. (Herald)

4. The High Court has ordered Zimbabwe Power Company (ZPC) and Intratrek Zimbabwe to engage and map the way forward regarding completion of the Gwanda solar power project, after granting the latter leave to execute the court’s earlier judgment declaring the contract between the parties valid. Intratrek had applied for leave to execute High Court judge, Justice Tawanda Chitapi’s December 2018 ruling, pending appeal, over a contractual dispute regarding the Gwanda solar project, which was delivered in favour of Intratrek. However, ZPC is contesting the judgment at the Supreme Court. (Herald)

5. Parliament will soon order Energy and Power Development Minister, Fortune Chasi to update the nation on the worsening power situation and what is being done to address it. The move comes as latest data from the Zambezi River Authority (ZRA), which manages water used to produce power at the Kariba hydro-electric station, revealed that the water levels were worsening. Zimbabwe’s power utility, Zesa Holdings is currently implementing load shedding to declining power production, a situation that was made worse by low water levels in the Zambezi River basin due to drought experienced in the 2018/19 season. Proportional representation Member of Parliament Priscilla Misihairambwi-Mushonga said on Tuesday it was imperative that the government told the nation the state of the country’s power situation. (Herald)

6. Zimbabwe takes the search for investors to South Africa in August in a bid to attract businesses that can thrive notwithstanding the obtaining challenging economic environment. This is also in sync with the “Zimbabwe is open for Business” mantra emaciated by President Mnangagwa. Through the Institute of Chartered Accountants of Zimbabwe (ICAZ) Winter School, which will be held in conjunction with the Financial Markets Indaba (FMI) in Sun City, South Africa,

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delegates will explore the need for businesses in Zimbabwe to disrupt the uncertain economic environment in order to excel locally and globally. (Herald)

7. The Southern African Railways Association (Sara) will this year come up with a Regional Railway Infrastructure Development Masterplan to address a number of challenges that continue to pose a threat to SADC’s rail network system. It has been estimated that SADC’s railway infrastructure challenges require about US$100 million. Railways across the region are hamstrung by poor infrastructure, equipment, statutory provisions, skills drain and poor information technology which largely affect regional integration. According to the Sara, rehabilitation of region’s railway lines would help railways reclaim their market lost to road network and enhance intra-regional trade and integration. (Herald)

8. Small-scale miners, who account for more than 60% of gold deliveries to state gold buying entity Fidelity Printers and Refineries (FPR), have called on the state buyer to review the foreign currency component that they get for deliveries. Reserve Bank of Zimbabwe (RBZ) Governor, John Mangudya, reviewed downwards the foreign currency component due to small-scale miners from 70% to 55% when he presented the 2019 monetary policy statement. The RTGS$ component is, however, now being paid at the interbank exchange rate as opposed to the 1:1 that prevailed before the liberalisation of the US$ to RTGS$ rate. (Herald)

9. The Grain Millers Association of Zimbabwe (GMAZ) says it has secured US$7 million from the Reserve Bank of Zimbabwe (RBZ) to import 19 000 metric tonnes of wheat. The revelation came after sources said Lobels shut down its Bulawayo and Harare plants due to flour shortages. “The situation is expected to improve the supply of flour starting next week. We also have another consignment of 60 000 metric tonnes of cereal in Mozambique whose payment we are negotiating with the central bank to settle so that the country does not run out of wheat,”

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GMAZ chairman Tafadzwa Musarara said. (NewsDay)

10. The Zimbabwe Investment Development Bill (Zida), currently in its second reading stage in the National Assembly, will soften up on foreign investors and treat them in the same way that Zimbabwean investors are treated, Justice Minister Ziyambi Ziyambi told Parliament on Tuesday. He was presenting the Bill on behalf of Industry and Commerce minister Nqobizitha Mangaliso Ndlovu. He told MPs that when the Zida law is passed it will also allow foreign investors to employ foreigners of their choice, a departure from the previous indigenisation regulations which emphasised on employment of locals by investors. Some of the advantages of the Bill are that it will seek to establish a one-stop shop or single interface for investors, and establish an agency with corporate status whose primary function will be to facilitate entry and implementation of investment projects and coordinate investment programmes and strategies. (NewsDay)

11. High Court judge Justice Tawanda Chitapi has castigated the Zimbabwe Power Company (ZPC) for its lackadaisical approach to finding common ground with Intratrek Zimbabwe fronted by Wicknell Chivayo to resolve a four-year impasse over the scandal-tainted Gwanda Solar Project. Justice Chitapi said ZPC’s continued refusal to sit down with Chivayo to resolve the issue was a clear indication that the power company’s move is driven by “selfish, self-serving and ulterior reasons”. “The respondent (ZPC), with due respect as evidenced by its depositions, is appealing the judgment for selfish, self-serving and ulterior reasons. It is no wonder that the proposed grounds of appeal have no prospects of success. (NewsDay)

12. ZimTrade chief executive Allan Majuru says he expects the trade policy and export strategy (TPES) document meant to boost exports to be ready before the end of the third quarter. The TPES is an implementation framework document that is expected to guide government and the

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private sector on increasing Zimbabwe’s exports as it is the largest source of foreign currency. “Yes. Right now it (TPES) is getting input from the private sector, where it is making a lot of rounds so that we get full feedback from them. We are just waiting for their input. I want it to be out before the end of the third quarter, because it has to be very structured as the guys who do the business of exports have to really put their input,” Majuru said. (NewsDay)

13. Former Zimplow Holdings chief executive, Zondi Kumwenda, has been shortlisted for the position of commissioner with the Zimbabwe Anti-Corruption Commission. He is among the 38 other candidates, including former banker James Mushore. Kumwenda stepped down as Zimplow boss in 2015. During his tenure he transformed Zimplow from a purely animal drawn agricultural equipment supplier to a mechanised agricultural and mining equipment supplier. (DailyNews)

14. Renowned United States economist and currency expert Steve Hanke has disputed the latest official inflation figures released by government this week. Hanke, who had previously volunteered to advice President Mnangagwa’s government but was turned down by Harare, said official inflation should be at 364%. The Zimbabwe National Statistics agency on Monday said official inflation had now reached 97.85% driven by high prices recorded during May. “Zimbabwe’s annual inflation rate is 364%, nearly five times the government’s reported rate. Don’t believe a word from the Mnangagwa government. Zimbabwe must install a currency board or formally dollarise if it wants to avoid an unending death spiral,” Hanke said. (DailyNews)

15. Bread supplies are set to improve after the RBZ released US$7 million for the payment of 19 000 metric tonnes of wheat that was held in Beira, Mozambique. In a statement, Grain Millers Association of Zimbabwe chairperson Tafadzwa Musarara yesterday said the wheat will cover

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the national flour requirements. “The 19 000 metric tonnes of wheat will cover the national flour requirements for the next two-and-a-half weeks and the National Railways of Zimbabwe is in the process of loading the paid consignment which will start trickling into the country next week. The situation is expected to improve the supply of flour starting next week. (DailyNews)

16. The country is heading towards a total blackout as Kariba water levels have drastically dropped to 29%, with Energy and Power Development minister Fortune Chasi warning there is no quick fix solution. Speaking to journalists at a post-Cabinet briefing on Tuesday, Chasi painted a gloomy picture about the electricity situation in the country, which has seen Zesa Holdings cutting power supplies for 10 to 12 hours every day. The minister said its high time the country begins to explore other power generation options including gas, wind and solar, adding that several government and private institutions have to install electricity meters in order to manage the power consumption. (DailyNews)

17. Paynet Zimbabwe, a salary payment software vendor, has offered companies a free service to wire salaries to their employees using EcoCash until August 1 2019, escalating a simmering row with banks. This comes after the payment service provider, which is a subsidiary of AIM-listed investment firm Cambria, suspended services to Zimbabwean banks because they owe US$470 000 after they refused to pay for service charges in US dollars. (DailyNews)

18. The government’s claim that Zimbabwe’s economy is failing due to sabotage and the avarice of cartels s false and a deplorable act of deception by the State, analysts say. This comes as a number of senior government officials, including Industry minister Mangaliso Ndlovu, have claimed that some businesspeople are allegedly sabotaging the local economy by working to restrict competition and maintaining the prices of basic goods in the country sky-high. John Robertson, a veteran economist, said business was only responding to the rampaging inflation, thriving parallel foreign currency market and the high cost of doing business in the country in

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everything it was doing. (Fingaz)

19. Peter Moyo, who was axed as Old Mutual CEO on Tuesday, is not going quietly. Initially suspended three weeks ago with the insurer citing a conflict of interest due to his involvement with a financial services company that he helped found in the early 2000s, Moyo vowed to clear his name in court after Old Mutual accused him of wrongly pocketing more than R30 million in dividends from NMT Capital. Moyo is the "M" in NMT, and the other initials belong to Sango Ntsaluba, the executive chair, and Thabiso Tlelai, a hotel and property executive who is also the CEO of the Don Group. (Fingaz)

20. South African chemicals and fertiliser maker Omnia Holdings says its Zimbabwean operations are being impacted by liquidity constraints in the country. The group’s business in Zimbabwe includes Fertiliser Zimbabwe and Acol Chemical, which are involved in the supply of fertiliser and agriculture chemicals. (Fingaz)

21. The Zimbabwe Stock Exchange says firms listed on the local bourse are now required to report financial results on a quarterly basis after the gazetting of amended Listing Requirements under Statutory Instrument 134 of 2019 last week. Up to this point, companies had only been required to publish annual results and half year interim reports in the press or in electronic form, and to distribute these to all shareholders not later than 3 months after the end of the year or the interim period. (Fingaz)

22. Farm implements maker Zimplow Holdings says its decision to venture into mining is paying dividend after registering strong growth in the past few months. Vimbai Nyakudya, the group’s CEO said the company is now on a solid path despite Zimbabwe’s difficult operating terrain and

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the recent drought which reduced yields in the 2018/19 agricultural season. (Fingaz)

23. Powertel says it does not understand the government’s decision to merge it with 2 other State run telecoms companies, when it is in a sound financial health. The Zesa Holdings unit was established to specifically provide information and communication technologies within the State- run power distribution giant, and to commercialise excess capacity. But under the Transitional Stabilisation Programme, an ambitious blue announced by Finance minister Mthuli Ncube in October, it is lined up for a merger with Africom and Zarnet. However people familiar with the matter said the Powertel board told Energy minister Fortune Chasi that tempering with the company’s operations will have adverse implications. (Fingaz)

Regional News

1. South Africa’s rand retreated from a two-week high in early trade yesterday ahead of domestic consumer price inflation data and the U.S. Federal Reserve’s closely-watched policy decision. At 0630 GMT, the rand traded at 14.5500 per dollar, 0.3% weaker than its New York close on Tuesday. The currency raced to a two-week high of 14.4900 on Tuesday after the government signalled it will give additional support to power firm Eskom and as emerging currencies were lifted by expectations the Federal Reserve could signal U.S. rate cuts. President Cyril Ramaphosa is scheduled to make his state of the nation (SONA) address today, which is likely to include more measures to support cash-strapped Eskom. (Reuters)

2. Five African commercial banks have partnered in a $375 million financing deal to build a new diamond mining vessel for a subsidiary of Anglo American’s diamond unit De Beers. Nedbank Namibia, RMB Namibia, Standard Bank, ABSA and Bank Windhoek agreed to provide 80% of the funding for the ship, which will be the world’s largest of its type. Debmarine Namibia a 50- 50 joint venture company between De Beers and the government of Namibia will provide the balance of $94 million. The ship, to be known as the AMV3, will be the seventh in the

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Debmarine Namibia joint venture’s fleet, which mines high-quality diamonds from the ocean floor using hi-tech surveying equipment. (Reuters)

3. Virgin Money South Africa will launch a zero monthly fee bank account and cheap cross-border payments on its financial technology app, and could eventually roll this out in other developing markets, its CEO told Reuters. The latest iteration of the app, Spot, which currently allows users to make payments to other individuals or merchants, is expected to launch with the new features in the final quarter of the year, Andre Hugo, Virgin Money SA CEO, said in a phone interview yesterday. “We’re quite bullish,” he said, explaining that Spot and the company’s personal loans and credit card businesses collectively had over 500,000 customers. Spot alone acquired more than 285,000 users in six days after its October launch, he added. (Reuters)

4. Nigeria may issue Eurobonds if necessary to help finance its 2019 budget, the debt office said yesterday, a day after its head said no such move was planned. Foreign borrowing for the 2019 budget was set at 824.82 billion naira ($2.7 billion), the office said. The plan is to first access any cheaper funding from multilateral and bilateral lenders. “Thereafter, any balance will be raised from commercial sources which may include security issuance such as Eurobonds,” it said in a statement. Nigeria, which emerged from recession last year, has borrowed abroad and at home over the past three years to help finance its budgets and to fund infrastructure projects, but debt servicing costs are rising. (Reuters)

5. South African inflation stayed well within the central bank’s target range in May, making it more than two years since it last breached the ceiling, raising the possibility of a rate cut as calls for the bank to support the flagging economy swell. The South African Reserve Bank (SARB) is under pressure to do more to stimulate growth after the economy shrank by 3.2% in the first

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quarter, its worst contraction in 10 years. (Reuters)

6. Malawi has the highest level of maize price volatility compared to other sub-Saharan African countries, a recent study has shown. The study by two researchers from International Food Policy Research Institute (Ifpri) Dennis Ochieng and Rosemary Botha, investigated the structure, conduct and performance of the country’s maize market. The study found that maize does not bring the desired income. The findings show a widespread lack of maize grading standards and common weights measures that characterise the country’s maize marketing compared to other countries in the region; hence, it does not fetch desired revenue on the market. Reads the report in part: “In terms of the performance of the maize market, maize prices have been highly volatile with high volume seasonality and high price volatility. (Mwnation)

7. The World Food Programme governing Executive Board has approved a five-year, US$76 million Country Strategic Plan to significantly boost food security in Zambia, which has one of the world’s highest malnutrition rates. The 2019-2024 Country Strategic Plan, endorsed last week at the Board’s annual meeting in Rome, Italy, will formally come into effect on 1st July, and seeks, among other things, to better address the root causes of malnutrition, improve responses to crises and shocks, including those caused by climate change. (LusakaTimes)

8. Bank of Zambia (BOZ) Deputy Governor for operations Bwalya Ng’andu says the country will fully migrate to the National Financial Switch in the fourth quarter of this year. Dr. Ng’andu said under phase one of the National Financial Switch project, 14 out of the 18 commercial Banks in the country have been connected to the switch. He underscored that the establishment of the National Financial Switch, which commenced in 2014 once fully implemented will yield massive

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benefits to the consumers are commercial banks. (LusakaTimes)

9. Spain has pledged to invest more in Nigeria to further strengthen the bilateral trade relations between the two countries. Spanish ambassador to Nigeria, Mr Marcelino Ansorena, made this known in an interview with the News Agency of Nigeria (NAN) in Abuja yesterday. Ansorena said that Spain had been interested in the African market because of the viability for buying and selling in the ECOWAS region. According to him, Africa, particularly Nigeria, has a huge market because of the ratified free trade agreement, which allows everybody to buy products with little or no barrier. (AllAfrica)

10. ONGC Videsh Ltd., along with its Indian and foreign partners, has announced that it will invest around $20 billion to construct a gas liquefaction and export terminal in the African nation of Mozambique. This is an effort to monetise the offshore natural gas reserves that they have discovered in the country. (NewsNow)

11. A high-level trade and investment delegation organised by the Ministry of Economy under the chairmanship of Engineer Sultan bin Saeed Al Mansoori, UAE Minister of Economy, will participate at the Africa Trade Week, next week, in South Africa. The event will take place from June 23 to 25, in Johannesburg, under the theme ‘Africa The New Home for Trade’. (NewsNow)

12. Cytonn Investments has released its 2019 first quarter Banking Sector Review, which highlighted the performance of the listed banks in Kenya following the release of the quarter one 2019 financial results. As per the report, banks had an improved performance on aggregate, as they recorded improved profitability, in a relatively tough operating environment, thus highlighting the resilience of the sector. The report, themed ‘Consolidation and

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Diversification to drive Growth’, analyzed the first quarter 2019 results of the listed banks. (NewsNow)

13. South African Airways (SAA), the national carrier of South Africa and Alaska Airlines, the fifth largest airline in the United States, have announced that they have established a new interline partnership, which provides new and convenient flight options for both SAA and Alaska’s customers traveling between North America and Africa. With immediate effect, customers will be able to purchase a single itinerary for travel on flights of both carriers in one simple transaction and enjoy connections via New York-John F. Kennedy International Airport and Washington-Dulles International Airport between Alaska Airlines’ expansive North American network and over 75 destinations in Africa served by SAA and its regional partners. (NewsNow)

International News

1. The dollar fell today, skidding to a six-month low versus the yen, after the U.S. Federal Reserve signalled it was ready to lower interest rates to combat growing domestic and global risks. The Fed left interest rates unchanged yesterday as widely expected but said the case for lower rates was building, suggesting it could ease monetary policy as early as next month as it took stock of rising trade tensions and growing concerns about weak inflation. Sterling held on to gains against the dollar ahead of a Bank of England meeting where policymakers are expected to hint at more interest rate hikes. However, the BOE could be an outlier as other central banks turn dovish and enter a rate cutting cycle, which increases the chance of further declines in bond yields on a global scale. (Reuters)

2. India will implement more reforms to boost economic growth, including higher spending in farm sector and easing collateral-free loans to small businesses, President Ramnath Kovind told lawmakers today. “Inflation is low, fiscal deficit is under control and foreign exchange reserves are rising ... Now India is moving towards becoming the world’s fifth largest economy,” Kovind

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said while addressing the joint session of parliament, ahead of the annual budget. Newly appointed Finance Minister Nirmala Sitharaman will present the annual budget on July 5. (Reuters)

3. Gains in global personal wealth ground to a near-halt in 2018, rising just 1.6% for the weakest growth in five years. The slowdown is a steep drop from the 7.5% gain in personal global wealth in 2017, and the 6.2% compound annual growth rate from 2013 to 2017, according to an analysis by Boston Consulting Group released today. Factor in the effect of a rebounding US dollar and asset values actually declined 1.6% last year, wiping out any gain, said Anna Zakrzewski, global leader of BCG's wealth-management practice. "For the first time since 2008, we saw wealth growth was negative when you take into account all the factors," she said. (BusinessTimes)

4. A US$222 billion wealth manager that piled up cash to the highest level in years before last month's global equity rout is now worried Europe might be next on US President Donald Trump's tariff radar. Pictet Wealth Management boosted cash to about 15% of holdings from around 9% at the start of this year, and turned tactically underweight on global equities in June, said David Gaud, the chief investment officer for Asia. He said that the cash is almost three times the level that a fund should have over a decade. Money managers with US$528 billion between them have an average cash balance of 5.6%, according to a Bank of America Merrill Lynch survey. (BusinessTimes)

5. Australia's top central banker today said it was not "unrealistic" to expect a further reduction in interest rates given ample slack in the labour market, and called on the government for action on fiscal stimulus. Reserve Bank of Australia (RBA) Governor Philip Lowe said it was "unrealistic" to think that a single quarter-point cut in rates would be enough on its own to speed up

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economic growth. The RBA cut rates to a record low of 1.25% earlier this month. "Given this, the possibility of lower interest rates remains on the table," Mr Lowe told an economics conference in Adelaide. "It is not unrealistic to expect a further reduction in the cash rate as the Board seeks to wind back spare capacity in the economy and deliver inflation outcomes in line with the medium-term target." (BusinessTimes)

6. New Zealand's economic growth remained sluggish at 0.6% in the first three months of 2019, official data showed today, fuelling expectations of another interest rate cut before year's end. The modest increase in gross domestic product for the March quarter was the same as the growth rate in the final three months of 2018, Statistics New Zealand said. It said the quarterly figure was boosted by a 3.7% rise in construction and brought the country's annual growth to 2.7% for the year to March 31. The Reserve Bank of New Zealand cut its base rate to a record low of 1.5% in May, attempting to boost slowing growth. (BusinessTimes)

7. The Bank of Japan is widely expected to keep its ultra-loose monetary policy unchanged today but signal its readiness to ramp up stimulus if global risks threaten the country's economic expansion, nodding to the widening fallout from the US-China trade war. The BOJ is under pressure to respond to growing risks to Japan's recovery, as a darkening global economic outlook pushes the US Federal Reserve and the European Central Bank to drop hints of further monetary easing. The Fed kept interest rates steady yesterday but said it was ready to battle risks by cutting rates beginning as early as next month, reinforcing expectations that major central banks have now shifted full gear toward topping up not whittling down their crisis-mode policies. (BusinessTimes)

8. The Federal Reserve yesterday opened the door to an interest rate cut soon, vowing to act to keep the economy growing as uncertainties about trade and other issues mount. US Federal

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Reserve Chief Jerome Powell said that trade friction and slowing growth worldwide have led many central bankers to feel the case for an interest rate cut has "strengthened" but that they want to see more data before moving. The central bank left the benchmark lending rate unchanged but one policymaker dissented in the vote, advocating for an immediate cut instead - something President Donald Trump has been calling for loudly. (BusinessTimes)

9. Italy's central bank chief, Ignazio Visco, described the difference between Italian and German sovereign bond yields as ridiculous, saying it reflected unfounded fears that Rome could fail to repay its debts or might exit from the euro. "This spread that we have is ridiculous because it also reflects the fear that we cannot repay our debts or that they will be repaid in another currency; in other words, an exit from the euro," Bank of Italy chief Visco, who also sits on the European Central Bank governing council, said yesterday. "It's really stupid," he told a conference. Italy's 10-year benchmark bond yields about 237 basis points over the equivalent German paper, sharply down from last month but still well above the risk premium imposed on neighbours Spain and Portugal and a little below that on Greek bonds. (BusinessTimes)

10. This year's resurgence of bitcoin and other cryptocurrencies has yet to translate into the same kind of gains for some of Asia's more prominent crypto-linked stocks. The largest digital coin is up about 150% in 2019, surging past the US$9,000 level earlier this week ahead of Facebook's announcement for a cryptocurrency called Libra, that will be governed by a group of almost 30 companies including Visa, Mastercard and PayPal. (BusinessTimes)

11. Southeast Asian leaders will dissect the impact of the US-China tariff war this weekend at a Bangkok summit, with Beijing determined to drive forward a trade pact sweeping in 40% of global commerce but excluding America. Disputes in the flashpoint South China Sea and Myanmar's treatment of Rohingya Muslims are also likely to make the agenda at the two-day

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Association of Southeast Asian Nations (Asean) meeting starting Saturday in the Thai capital. But commerce will dominate, with the trade war between the world's two biggest economies pushing some major manufacturers to flee China to Southeast Asia and casting doubts over the future of free trade. (BusinessTimes)

12. Kazakhstan’s digitisation efforts generated $578 million for its economy in 2018, said Kazakh Vice Minister of Digital Development, Defence and Aerospace Industry Ablaikhan Ospanov at the June 12-14 International Data Corporation’s (IDC) Chief Information Officer (CIO) Summit in Nur-Sultan. IDC forecasts that 30% of Global 2000 companies will allocate at least 10% of their revenue to digital transformation by 2020, viewing it as a long-term investment. Worldwide spending on technologies and services that will enable this transformation for business is set to reach $1.97 trillion in 2022. (NewsNow)

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