By Linda van Tilburg
- Former State Security Minister Bongani Bongo has been arrested in a case related to bribery and state-owned companies in what is seen as Cyril Ramaphosa’s government’s first action to end corruption. Bongo appeared in a court in Cape Town yesterday to face charges. Bongo’s arrest was widely welcomed by analysts, who told Bloomberg that it was demonstrating that criminal charges were at long last being brought against ANC members and “clearly pretty senior ones.” The head of Africa research at Verisk Maplecroft, Indigo Ellis said Bongo’s detention was a welcome sign to investors concerned about the plight of governance in South Africa. “He is low-hanging fruit in a deep-seated culture of corruption.” Bongo was freed on bail and his case was postponed until 31st of January.
- Bosasa assets cannot be put up for sale. That is according to Jared Watson, the nephew of former company CEO Gavin Watson after liquidators, Sechaba Trust advertised an auction from 4th to the 6th of December of Bosasa assets. It included the company’s headquarters, a copper plant, Gavin Watson’s blue BMW X5 among a large number of items. Watson who is handling his uncle’s estate said “false information” being spread most likely by Cloete Murray from the auction house who had no authority to bring an auction. He said there were two court documents stating that no assets could be sold without the consent of the directors of the company and no consent has been given. He said to the best of his knowledge Murray also did not even have the consent of the other provisional liquidators.
- The Reserve Bank has held its benchmark interest rate and signalled that it may only start easing again in the second half of next year. Policy uncertainty and the deterioration of the country’s finances as laid out by Finance Minister Tito Mboweni in the medium-term, adds to the central bank’s reluctance to ease. The Monetary Policy Committee voted to keep the repurchase rate at 6.5%. Reserve Bank Governor Lesetja Kganyago told reporters that the economy was forecast to expand by only 0,5% this year and inflation had been inside the central bank’s target range since April 2017. Although inflation has slowed to a nine-year low, the MPC wants to see a sustained decline in price growth and a decrease in risk elements.
- With Remgro and Rand Merchant Holdings spinning off their stakes in FirstRand, Africa’s biggest bank by market value just became a possible takeover target. But Bloomberg reports that it comes at a time when potential buyers are scarce. Adrian Cloete, a portfolio manager at PSG Wealth says, for an international company to come in and spend that much money in South Africa is probably not feasible at the moment. A buyer would also need to overcome antitrust obstacles and international capital requirements that made it harder for banks to hold investments aboard. Other factors that may make a buyout less likely, is that European lenders are focusing on home markers and the global financial crisis has knocked deals.
- Budget retailer Mr Price’s interim profit dropped by more than 10% as its apparel division was affected by what the retailer termed as an imbalance in its product assortment and weak economies at home and abroad. This imbalance resulted in excess stock that had to be marked down to clear, the company said. Total revenue was up 2.6%, while the home segment reported a 3.2% sales growth. Mr Price shares climbed by 11.25% on the Johannesburg Stock Exchange yesterday. Telkom shares dropped by more than 10% yesterday continuing its slump as its efforts to acquire Cell C had become more complicated with Cell C agreeing to extend a roaming deal with MTN.
- Old Mutual is under fire again, this time over a corpse. This is after a grieving family from Eshowe in KwaZulu-Natal brought a dead body to one of its branches so that the company would process a claim for funeral payments. A video of the incident was widely circulated on social media. Old Mutual apologised for the delay. It is a further embarrassment for Old Mutual as a public spat with fired chief executive officer, Peter Moyo is dragging on. Wayne McCurrie a portfolio manager at FirstRand’s wealth and investments unit said Old Mutual had major issues to sort out in respect of its corporate identity. The Financial Sector Conduct Authority said it was investigating the matter and warned Old Mutual customers threatening to cancel their insurance policies on social media against the risks involved.
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