The world is changing fast and to keep up you need local knowledge with global context.
By Linda van Tilburg
In today’s Biznews Flash Briefing:
- President Cyril Ramaphosa has announced that the Government is going to bail out Eskom. A special appropriation Bill will be tabled as a matter of urgency in Parliament to allocate a significant portion of the R230bn fiscal support that Eskom will require over the next 10 years. Further details will soon be given by Finance Minister Tito Mboweni. Ramaphosa acknowledged in his state of the nation address in Parliament that Eskom’s financial position is of “grave concern” and that the economic outlook of the country is extremely weak. He said Eskom is too vital to South Africa’s economy to be allowed to fail. Ramaphosa also said that with the sharp contraction in the first term, growth is likely to be lower than anticipated in the February budget.
- The Rand held steady trading at R14.27 cents to the dollar after the announcement. Earlier in the day it reached R14.19 after the news that the US Federal Reserve suggested that it was willing to lower interest rates in the coming months.
- Metal prices shot up yesterday, lifted by a weaker dollar, after the Fed announcement. A South African index of bullion producers jumped as much as 6.1% stretching the year’s gain to 40%. Gold has surged to the highest level in more than five years. High metal prices were good news for South African mining companies; Gold Fields gained 4.3% on the S&P500, taking its advance over the past month to 49%. On the JSE, the gold miners had a bumper day as Harmony Gold and AngloGold Ashanti jumped by more than 7%, Sibanye was up 5% and Gold Fields just more than 2%. The day was as good as gold, but it was even better day for Globe Trade Centre, the share price soared by 20%.
- An online cleaning service became the first beneficiary of Naspers Foundry Fund, which intends to invest R1.4bn in South African tech start-ups. The fund invested R30m in SweepSouth, a business founded by tech entrepreneur Aisha Pandor. SweepSouth connects nearby workers to people who need cleaning services and payment takes place within an app. This happens as Naspers prepares to list its international assets on Euronext Amsterdam next month. There is an interview with Pandor on the Biznews website.
- Construction company, Group Five which had gone into administration announced on its website that shareholders of the company are unlikely to get anything out of the rescue process. In 2017 its losses amounted to R800m and in 2018 to R1.8bn. But the company states that there is a reasonable prospect that the business can be successfully rescued and that some value, but not all would be provided to creditors.
- The loss-making South African operations of Lafarge Africa has been sold to an affiliate of its parent firm, Lafarge Holcim for $317m. Shares of the cement company, Lafarge Africa rose to a three week high on the back of the news. The deal should be finalised by the third quarter.
- British anti-apartheid stalwart Peter Hain has called on the international financial community to track down the money looted by the Guptas and repay it to National Treasury. Hain, who spearheaded the British campaign against Bell Pottinger, said it is painful for veterans of the freedom struggle to watch how their legacy gets looted. He said no global corporate should have anything to do with corruption, white-washing corruption or getting fat fees from looters because it takes two to tango in the corruption business.
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Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.