🔒 Flash Briefing: More New Look misery for Brait; New gold giant created; Death knell for Brexit plan

By Alec Hogg

In today’s global headlines:
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  • British Prime Minister Theresa May’s impassioned plea ahead of a key Parliamentary vote this evening appears to have fallen on deaf ears. In the absence of a seismic shift today, Mrs May’s proposed Brexit deal will lose by between 129 and 228 votes in the 650-seat house – with even the bottom end representing a crushing defeat.

    The opposition Labour and Liberal Democrats are certain to vote in total against the Conservative Party Prime minister’s plan, with over 100 Eurosceptic MPs from her own party and Mrs May’s Irish allies, the DUP, set to join them. Labour leader Jeremy Corbyn has promised to launch a vote of no confidence in the government after tonight’s expected result in an effort to force a general election which pollsters say his party will win. Mrs May has warned her colleagues that voting against her plan could force a second Referendum, which has a good chance of reversing the decision to leave the EU.

  • US president Donald Trump is sure to draw additional support for his trade war on China after last night’s news that the 10% tariffs, US imports from China rose 11% last year while exports were up less than 1%. That swelled China’s trade surplus to the US to a record $323bn, a chunky 17% higher than in 2017. Analysts say the figures were influenced through stockpiling of Chinese goods by US importers ahead of the tariffs taking effect. In related news, the White House has denied reports that the president’s daughter would decide who would be the new MD of the World Bank after incumbent Jim Yong Kim leaves at the end of the month, three years early. But the Administration did confirm that Ivanka Trump would be a member of the team looking for Mr Kim’s replacement. Ms Trump has no experience in development finance. Because the US is the biggest funder of the World Bank its MD is traditional lyan American, while the Europeans usually get to appoint the head of the International Monetary Fund, the other multilateral institution set up at the meeting in Bretton Woods after the second world war.
  • Barrick, which appointed South African Mark Bristow as CEO two weeks ago, is to lose its recently acquired crown as the world’s biggest gold producer. Colorado headquartered Newmont Mining yesterday announced a $10bn all stock deal to acquire Canadian group Goldcorp topping the $6bn Barrick/Randgold merger. The new group will produce almost 8m ounces of gold generating $11bn a year, a third of it from the previous Goldcorp. Newmont shareholders weren’t crazy about the terms, cutting its share price 9% while the targeted Goldcorp’s price rose 7%.
  • In South African-related news, JSE-listed Brait yesterday secured a way ahead for its disastrous £780m purchase of UK fashion retailed New Look. It reached agreement with the holders of over £1.1bn in debt which will see them taking a £823m haircut in return for 20% equity ownership of the restructured business. Investors who will inject a fresh £150m into the company will own 70% of the equity. Depending on how many other creditors agree to inject fresh capital, Brait’s current 100% ownership of New Look will fall to between 18% and 30%. The deal results in a further R2.20 per share write-off in Brait’s NAV to R53, double the current share price.
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