By Alec Hogg
Today’s global business news headlines:
- South African gold and platinum producer Sibanye has announced that it had raised R1.7bn ($120m) in cash through selling the equivalent of 5% of its equity at R15.50 a share. The fresh capital will bolster the company’s reserves ahead of the opening of a second front in its conflict with a determined AMCU trade union. AMCU members have already been out on a four-month strike at SA’s gold mines, a stoppage Sibanye claims is illegal. AMCU is taking a similar hard line ahead of talks with platinum producers, fighting Sibanye’s proposed acquisition of loss-making Lonmin, criticising bonuses paid to management and demanding a share of benefits from platinum and palladium price increases. Sibanye’s capital raising exercise and a disclosure that gold production will be down by two thirds in the first quarter, knocked the share price from R17 to R14 yesterday, a drop of 17%.
- The Johannesburg Stock Exchange has urgently requested that the external auditors of Ayo Technology Solutions investigate the company’s reported financials for the six months to end February 2018 and February 2019. This unusual step, the exchange says, flows from evidence given under oath at the PIC commission on Monday where the former CEO and CIO said the last year’s interim results were doctored to inflate the numbers. The JSE said it is aware of numerous other allegations against the company and is conducting various investigations of its own. Ayo, which is controlled by Independent Newspapers chairman Iqbal Surve, is alleged to have boosted its financials to secure a R4.3bn investment from the PIC in return for 29% of a company whose assets pre investment were worth under R300m. In December 2017, against the advice of some of its investment managers, the PIC paid R43 a share for Ayo stock which is now trading at R14.50.
- On the day when Israel is set to celebrate becoming only the fourth country to land a spacecraft on the moon, the nation also digests its collective decision to elect a political leader facing corruption charges. Benjamin Netanyahu yesterday secured a fifth term in office, with five right wing and religious parties pledging to support his Likud Party. This will give his coalition control of 65 seats in the 120 member Knesset. In a repeat of a trend around the world, Israel’s election results reflected a shift to the right. Its Labour Party, a left-wing institution which once dominated politics in the country, recorded its poorest ever showing, winning just six seats. Netanyahu campaigned on his close ties to US president Donald Trump and warnings that if he lost it would usher in a left-wing government sympathetic to Arabs. But after 13 years as prime minister, the next stretch will be his toughest: the country’s attorney general is set to lay corruption charges, and Trump is planning to unveil a peace initiative with the Palestinians.
- A South African currency strengthening to better than R14 to the US dollar sparked another big day for retailing shares on the JSE, led by a 7.4% surge for discounter Mr Price whose stock has risen 17% in a fortnight. Shoprite and Spar picked up over 4% as did Big Four banking stocks FirstRand and Nedbank. These shares led the JSE overall index to a 1% gain. Other features on the upside were the Sasol BEE shares which rose 12% and fast food and gaming business Grand Parade, up 11%. At the other end, Platinum stocks were especially hard hit by the stronger rand and prospects of another long strike as the AMCU union gave notice of a 2014-type negotiating position. Lonmin lost 14%, Wesizwe was down 7% and Anglo Platinum fell 4%.
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