This week’s global news focuses on a somewhat positive aspect of the Covid-19 pandemic – the acceleration in adapting and developing technologies that can minimise the impact on the environment: France is allocating a significant portion of newly available funds to green technology; Amazon is making progress in overcoming legislative hurdles to enable it to deliver goods via drones; and even the gold mining industry is increasingly relying on artificial intelligence to maximise metal extraction from existing assets versus spending more on exploration, and where technology can test alternative scenarios in an operational mine, without having to incur the risk, cost and environmental destruction of unnecessary mechanic intervention.
Global News
- US Tech shares dropped yesterday as the Nasdaq 100 lost more than 5%, the biggest drop-off since March lows. While this is a significant daily dip, earnings potential and market valuations have been misaligned recently and even with this falloff, tech shares remain sharply higher – 26% for the Nasdaq – since the start of the year. At the time of writing however, the Nasdaq is down a further 4.32%. (Our offshore Fund Managers own Microsoft and Facebook, but not Amazon, Alphabet, Netflix, Tesla or Apple).
- France has announced a €100 billion stimulus plan to counter the effects of Covid-19. As the country faces its worst recession in decades, the plan aims to return the damaged economy to pre-crisis levels by 2022. This would involve large tax cuts and providing hiring subsidies to companies in the hope of stimulating investment and creating jobs. Around one third of the new funding will be allocated to aid the country’s transition to green technology.
- Amazon is one step closer to delivering goods in the US through the use of enhanced technology. The company received a critical certificate from the Federal Aviation Administration and will begin to test deliveries via drone.
- Artificial Intelligence (AI) start-ups have started to tackle some of mining’s oldest problems. AI can help monitor mining viability remotely and would be able to shift workers away from potentially dangerous underground sites, according to Bose, who founded Intellisense.io in 2014. Conundrum, also an AI start-up, believes that “a mine will become a place like an office, because you don’t need to be on-site frequently,” and that these innovations would be available in maybe two to three years.
- Brexit negotiations continue to face difficulties. The European Union’s chief Brexit negotiator, Michel Barnier, accused the UK of failing to engage constructively in negotiations over their future relationship. The transition period ends in December and this lack of compromise increases the chances of a messy breakup.
- Australia has fallen into its first recession in nearly 30 years due to the implications of Covid-19. GDP fell by 7% in the first quarter of the year, the largest fall on record since 1959.
- Facebook announced that it intends to ban any new political ads on its site in the week before the Presidential Election in an endeavour to reduce voter disinformation.
- As tensions between China and India escalate over the nations’ disputed border, India has banned over 100 Chinese apps including Tencent’s popular game PUBG. India’s Ministry of Electronics and Information Technology stated that the move was to safeguard the interests of Indian mobile and internet users
- China has added further controversy to the potential sale of TikTok to an American entity. The country just changed the rules that govern the sale of certain kinds of technology to foreign buyers. The revision means that ByteDance – the current owner of Tiktok – would have to get government approval for the sale. This follows President Trump’s attempt to ban TikTok’s business in the US because of security concerns.
- Apple Inc. has asked suppliers to build around 75million 5G iPhones this year, this being roughly in line with last year’s launch numbers, and shows that the demand for the company’s most iconic product has not been damaged by the effects of the pandemic.
Local News
- In contrast to ‘Green’ developments overseas, South Africa’s coal-burning electricity producer Eskom resumed nationwide load shedding this week.
- Despite Experian’s claims that it had contained a data breach impacting 24 million South Africans, it has now come to light that the information has been leaked on the internet.
- At last weekend’s ANC National Executive Committee (NEC) meeting, President Ramaphosa outlined a plan to rid the ANC of corruption with a list of realistic measures. The President took the helm while Ace Magashule was side-lined and literally muted in a televised media conference that took place on Zoom. Ramaphosa announced that all party office-bearers who face corruption charges would be made to step aside or resign. Meanwhile on Thursday, former environmental affairs minister, Nomvula Mokonyane, was requested to explain to the Zondo commission, how she managed to afford to pay around R2.2 million as a deposit for an Aston Martin.
- Advocate Paul Hoffman has written an article analysing the events of the National Executive Committee (NEC) meeting that took place last weekend. He describes the two factions in the ANC vying for power – the one faction that upholds the Constitution, and the other being the ANC National Democratic Revolution (NDR). The article is both enlightening and informative, follow this link for more.
- The Democratic Alliance (DA) is not unified against a weakened ANC. Instead they are facing their own demons. Six out of nine provincial DA leaders are facing disciplinary charges. The DA’s Gauteng provincial leader, John Moodey, resigned after he was accused of orchestrating a ‘homophobic attack’, to which he maintains that he is a victim of an organised takedown.
- Sun International announced that it will have to retrench 2 300 employees due to the impact that the Covid-19 lockdown has had on its business. The hotel and casino company has lost R885 million for the first two quarters of 2020.
Sources: Dynasty, Reuters, Bloomberg Markets, The New York Times, Daily Maverick, and Moneyweb, etc
