Flash Briefing: CIO claims Ayo “manufactured” financials; Gold, Plat shares surge; Strong Pick n Pay results

By Alec Hogg

Today’s global news headlines:

  • The former Chief Investment Officer of JSE-listed Ayo Technology Solutions yesterday told the commission of inquiry into the PIC that the company manufactured financial statements to secure a R4.3bn investment from South Africa’s State pensioners. Ayo’s ex-CIO Siphiwe Nodwele said it was done to motivate a valuation of R14.8bn for Ayo at a time when its assets were just R292m. Nodwele and former Ayo CEO Kevin Hardy walked out of the company in August last year after the board did not address their governance concerns. Ayo is closely linked to Iqbal Surve, controversial chairman of Independent Newspapers which his company Sekunjalo acquired in 2013. On Biznews today, our correspondent Ed Herbst lays out a case suggesting Surve perjured himself when submitting evidence to the Commission last week.
  • The $2bn Tuna Bond scandal which involves state officials and Credit Suisse bankers, took an interesting turn yesterday when the Kempton Park magistrate’s court ruled against former Mozambiquan finance minister Manual Chang’s attempt to resist extradition. But the ruling threw a diplomatic hot potato to South Africa’s Justice Ministry which must now decide whether to allow Chang’s extradition to the United States, which made the original request for his arrest, or to Mozambique, which wants him to stand trial there. Chang has been fighting the US’s extradition request but says he is prepared to face charges in Mozambique.
  • Leading South African retailing group Pick n Pay yesterday gave notice that it will be delivering good news when publishing financial results for the year to end February. Its share price rose 4% on a trading statement that disclosed like-for-like volume growth of 5% with directly comparable turnover rising 7.4% – a highly credible performance in a soggy economy. Pick n Pay says it expects headline earnings for the year to be between 20% and 30% above 2018’s.
  • On the JSE yesterday, precious metals stocks rose strongly with Royal Bafokeng Platinum jumping 9%; Harmony 7.5%; Sibanye 5.5%, Anglo Platinum up 5%; Goldfields 4% and Anglogold 3.5%. At the other end, the share price of embattled pharma group Aspen came under further pressure, giving up another 3%, taking its loss so far this year to over 30%. Aspen shares went into free-fall last month after it reported a 19% drop in headline earnings for the half year to end December and projected the same quantum fall for the full year. It also announced a strategic review – rarely a good sign. Helped by resources, the JSE all share index ended yesterday’s session slightly firmer.
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