Cosatu targets private pensions; SA-US PTA reviewed; Tiger Brands CEO retires; Diamonds, Quilter

By Linda van Tilburg

  • Cosatu is pushing the government to consider its proposals to rescue Eskom before next month’s budget. In addition to suggestions it made that civil servants’ pensions and a state-run unemployment fund should be used to cut Eskom debt, Cosatu wants the government to consider making it mandatory for private pension funds to invest part of the money they control in infrastructure. It is also pushing for workers to be represented on Eskom’s board. A discussion must begin between government, the PIC, labour and the retirement industry on a sustainable, correct and progressive balance to be agreed on prescribed assets in support of key public goods and infrastructure, Cosatu said. Meanwhile, Eskom’s new Chief Executive Officer, Andre de Ruyter will present a draft plan to change how the utility operates on Friday. De Ruyter said he was taking some ideas to the board and is reported to be considering transforming the utility at a slower pace than envisaged by the government and would instead focus on stabilising the power utility that has more than R450bn of debt.
  • The South African government will tell the Trump Administration that its review of a preferential trade agreement that could put as much as $2.4bn in exports at risk, is premature and potentially damaging for both economies. The US trade representative is set to start public hearings today to review South Africa’s duty-free access to the US market under the Generalised System of Preferences for the world’s poorest economies.  It follows after a complaint was received from a private sector company, the International Intellectual Property Alliance that South Africa’s Copyright Amendment Bill and Performers’ Protection Amendment Bill failed to “provide adequate and effective protection of US copyrights.”  The South African embassy in Washington said at a briefing that senior officials of the Department of Trade and Industry will argue that the concerns of the IIPA were “at best speculative and certainly premature” and that the proposed bills are under review by South Africa’s president.
  • De Beers diamond sales have jumped after a terrible year for gems. The Chief Executive Bruce Cleaver said the demand for rough diamonds increased in the first sight of 2020 following the end of year selling season and subsequent inventory restocking. The diamond company sold the most diamonds since April last year in a sign that the industry is starting to recover from a slump in demand. De Beers sold $545m of diamonds in its first sale of the year. Prices in some categories, especially larger stones were slightly raised. Margins also recovered in the so-called secondary markets. Bloomberg reports that while the improved demand at the latest sale is a positive sign, industry participants will want to see a more prolonged recovery.
  • Quilter beat expectations after the end of 2019 saw it return to net inflows. Updating investors on fourth-quarter trading, the former Old Mutual Wealth business said that assets under management were £110.4bn at the year end, a 13% increase on 31 December 2018. Gross sales reached £3.5bn in the final quarter of the year, a 17% improvement, while net client cash flow inflow was £0.5bn. Chief Executive Paul Feeney said 2019 was a good year for market performance but a challenging year for net client flows and they were pleased to finish the year in a positive position.  Quilter shares on the Johannesburg Stock Exchange surged by 8.9%. In other market news, the Rand traded near a one month low due to jitters over the coronavirus trading at R14.62 to the dollar at the close. But the JSE All Share Index rose with international markets as an interest rate decision by the US Federal Reserve was expected. The All Share Index was up 1%.
  • The Chief Executive Officer of  Tiger Brands Lawrence MacDougall will retire this week, leaving Africa’s biggest packaged-food company that is still battling the fallout of a deadly outbreak of listeriosis linked to one of its factories. The company could still face a class-action lawsuit brought by the families of the more than 200 people who died, but it said no liability has been established against the group. Tiger Brands stock that declined by almost a third since MacDougall took the helm in May 2016, rose for a second day gaining 1.2% paring a 12-month decline to 16%. An equity analyst at Afrifocus Securities, Tinashe Kambadze said it had been made clear that the market wanted a change.