The world is changing fast and to keep up you need local knowledge with global context.
By Linda van Tilburg
Here is today’s Biznews Flash Briefing:
- Investors have reacted favourably to President Cyril Ramaphosa’s South African cabinet line-up especially to the retention of Finance Minister Tito Mboweni and Public Enterprises Minister Pravin Gordhan in their posts. But the Rand lost some of early gains from an opening of R14.58 to the dollar, it stood at R14.61 at midday and weakened to R14.69 at the close. South African stocks closed slightly firmer last night with the All share index up 1.39%. Major movers on the day were Liberty Holdings up 5 %, Tiger Brands, Shoprite, Goldfields, Hyprop Investments, Distell Group Holdings and Vukile all gained more than 4%, while Hammerson dropped more than 3%. Market Veteran, David Shapiro told Biznews that there was not much conviction from investors and that the US- China trade war is weighing down on markets.
- Chemical and fertiliser company Omnia Holdings has announced that it would undertake a rights offer of R2 billion to cut debt. The announcement sent its share price tumbling down by 13%. This came after the company agreed to restructuring talks with its creditors. Omnia says they will still be talking to creditors but they would issue the shares to reduce debt. The firm warned in March this year that its earnings could plummet by as much as 160% after a spike in debt.
- The board of Ayo Technology Solutions is suing the Public Investment Corporations for billions of rands for reputational damage. In a statement it claimed that the submission by officials of the PIC at the Mpati Commission has prejudiced the business of Ayo and has resulted in substantial difficulties in concluding transactions and going about its business in an unhindered way. This came after the PIC issued a summons against Ayo in the Cape Town High Court on Wednesday to recover its investment in the company. The claim is based on what the PIC has described as a misrepresentation on the part of the Ayo investment. The PIC took a 29% stake in Ayo for R4.3bn.
- Africa is working towards the world’s largest free-trade zone. The African Continental Free Trade Area came into force on paper yesterday after the required 22 countries including South Africa ratified the deal a month ago. Once it’s passed by all 55 nations recognized as part of the African Union, it would cover a market of 1.2 billion people, with a combined gross domestic product of $2.5trn. If it is successful it could move the continent away from exporting commodities to manufacturing capacity and industrialisation. But it has a couple of serious hurdles to overcome. Non-trade barriers, such as delays at ports, and politics, would have to be navigated before the plan to remove tariffs on 90% of goods can be realised. Nigeria is one of three countries, including Benin and Eritrea, that hasn’t signed the deal.
- The cabinet appointee that drew the most comments from social media was Patricia de Lille from the Good party who was sworn in as Minister of Public Works. She took the oath in Afrikaans. As political analyst Melanie Verwoerd explains, Auntie Pat’s inclusion was a nod by Ramaphosa to Nelson Mandela.
- In a similar surprise move, the ANC in the Western Cape has accepted the Democratic Alliance’s offer to take up the chair position of the Standing Committee on Public Accounts or Scopa in the province. It is not clear who would take up the appointment.
Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.