đź”’ Flash Briefing: Historic AU move on DRC; Intu woes grow; US/China war cooling

By Alec Hogg

In today’s global headlines:

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  • The African Union today broke with an appeasing stance by Cyril Ramaphosa-led SADC, to strongly condemn the official results of the DRC presidential election. It says in a statement that there are “serious doubts” about their veracity. In what analysts have described as a historic unprecedented intervention, the AU this morning dispatched a high-level delegation to the Congo, an action agreed upon at its heads of state meeting in Addis Ababa yesterday. Earlier, SADC issued a statement which effectively washed the hands of the 16 nation Southern African combine, following the Chinese and Russian line that this was an internal affair for the Congolese to address. The DRC’s Constitutional Court, which was packed with his supporters by unelected tyrant Joseph Kabila, is weighing a bid by the ostensible winning candidate Martin Fayulu. Results compiled by 40,000 observers of the Catholic Church say Fayulu won over 60% of the actual vote as against 18% by the candidate who has been proclaimed president in waiting.
  • Hopes are growing that the trade war between America and China, which threatens global economic growth, will be resolved during high level meetings in Washington next month. The Wall Street Journal reports this morning that US officials are debating an early cut in tariffs on Chinese goods to give Beijing the incentive to make deeper concessions. This conciliatory line is apparently being driven by trade secretary Steve Mnuchin. On the other side, trade negotiator Robert Lighthizer is resisting this approach saying it will be interpreted by the Chinese as a sign of weakness. No word on the matter from US president Donald Trump, but in previous impasses he has always sided with hard-liner Lighthizer.
  • Global movie streaming subscription service Netflix, whose share price was up over 50% in the past month, gave back a few dollars of those gains after quarterly results last night. Nexflix disclosed a jump of 8.8m in subscribers during the final quarter of 2018, ending the year with a base of 139m. But the financial results subscription based, advertising free movie channel also disclosed a compressing of profit margins and slightly slower sales growth than had been anticipated by Wall Street. Also, after a 27% rise in year-on-year revenue for the three months to end December, Netflix now expects growth to slow at 21% in the first quarter of 2019. Most of its expansion is now coming from outside the North American base, with international subscribers accounting for over 80% of the December quarter’s increase.
  • In South African-related news, JSE-listed property owner Intu is facing more challenges as one of its major tenants, the 165-store retailer Debenhams, today stated that it needs to close a third of these outlets. Like most other UK high street retailers Debenhams has hit hard times, reflected in a share price that has fallen from 80p to the current 3p. Last week its new controlling shareholders replaced the CEO and chairman. Debenhams is now renegotiating leases in an attempt to save the company, a route followed by a number of other UK retailers including Brait-owned New Look and Famous Brands’ British venture GBK. Intu Properties Plc’s share price has lost two thirds of its value in the last three years.

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