The world is changing fast and to keep up you need local knowledge with global context.
By Alec Hogg
Here’s your Biznews Flash Briefing:
- Former UK foreign secretary and London mayor Boris Johnson has emerged as the strong frontrunner to succeed British Prime Minister Theresa May, who steps down on June 7. Johnson is 54 and a great admirer of wartime leader Winston Churchill on whom he wrote a biography. He took a hard line on the UK’s departure from the European Union at the end of October, saying the country should leave with or without an exit deal. Johnson’s stance has also made him a favourite among Tories who fear Nigel Farage’s reincarnated UKIP, the mushrooming Brexit Party, which contested the EU elections yesterday. The contest for the Conservative Party leadership will be decided by the votes of more than 100,000 paid-up members of the party. These could include as many as 15 candidates, including a smattering of those who, like Johnson, resigned from Mrs May’s cabinet over disagreements on the line she took on the EU divorce. The party expects the leadership contest to be concluded before the end of June.
- The South African Treasury last night released details of the long anticipated Carbon Tax proposals which have now been signed into law by the president. The tax will be phased in over three stages with the initial one running from 1 June to end December 2022. The first phase will only affect Scope One emitters, those organisations which emit greenhouse gases from owned or controlled plants. Treasury says various tax free emission allowances will result in a relatively modest carbon tax rate ranging from R6 to R48 per tonne of CO2. Despite the State owned monopoly Eskom being the country’s biggest CO2 emitted, Treasury said the introduction of the carbon tax would have no immediate impact on the price of electricity. In an unrelated development, on Friday Eskom CEO Phakamani Hadebe resigned after just 16 months in the top job at the state owned electricity monopoly. He was Eskom’s 10th CEO or acting chief executive in the past decade. Hadebe said the post brought unimaginable demands and has stepped down for health reasons.
- Late on Friday evening, ratings agency S&P, one of the US’s Big Three, left South Africa’s sovereign debt ratings unchanged at below investment grade. It maintained the outlook as “stable” but expects that economic reforms enacted this year will boost investor confidence and support growth, albeit only slightly for 2019. Also on Friday, Japanese-based ratings agency R&I also confirmed its credit score for the country, but this time retaining the investment grade. In response, the SA government said its main focus was to regain investment grade status among all agencies: “This will be achieved by enhancing policy certainty and credibility, implementing growth-enhancing economic reforms, lowering the debt burden and restoring good governance and fiscal stability at public institutions and SOEs, specifically Eskom.”
- South African stocks closed last week slightly firmer, offsetting a sharp decline in gold shares with the major indices ending a quarter percent better on Friday. On the gold board, Harmony and Sibanye lost over 4% and Anglogold fell 3%. Elsewhere, Old Mutual’s slide in the wake of the surprise departure of CEO Peter Moyo continued with a 3% drop on Friday’s taking the week’s decline to almost 7%. Massmart, which is also parting ways with its CEO, continued its decline with another 3% drop on Friday taking the post Guy Hayward departure announcement to over 30%. Asset manager Sygnia’s shares fell 2.5% after a trading statement reported profits for the half year to end March would rise between 15% and 20%. The share price of construction materials and bulk commodities group Afrimat gained 5% after announcing that its negotiations to acquire Australian listed group Universal Coal were on track. On Thursday, Afrimat announced HEPS up 30% for the year to end February.
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