By Linda van Tilburg
- The rand weakened as Moody’s Investors Service, the only major rating agency that still assesses South Africa at investment grade, warned a decision to more than double state financial support for Eskom is “credit negative”, because it would be an additional drain on fiscal resources. Moody’s says in a statement that while the government may try to absorb some of the costs of the bailout for the cash-strapped power utility in the mid-term budget in October, the “room to manoeuvre is extremely constrained. It comes after a second R59bn cash injection over two years have been announced for Eskom. The Rand lost 1.4% of its value after the report trading at R14.10 cents to the dollar late yesterday afternoon.
- Sasol has written down asset values by R18.1bn as cost overruns at the Lake Charles project in the United States and lower chemical margins are weighing on earnings. It represents 9% of the group’s market values. Sasol has however forecast higher annual core earnings and said costs for the Lake Charles chemical project were in line with its previous estimates. Sasol shares plunged by 6.37% on the JSE, while Reinet and retailers, Mr Price and Massmart all lost more than 4%. Brewer AB InBev had a bumper day with shares rising more than 6% and Mass Real Estate gained more than 5%.
- Tesla shares have plummeted by as much as 13% after worse-than-expected losses and the departure of its co-founder JB Straubel casting fresh doubts about the electric car maker’s future. Despite delivering a record number of vehicles in the second quarter, Tesla lost $1.2 a share, a bigger deficit than analysts expected. Elon Musk also had a surprise announcement that he is not giving up on his retail store model as he announced earlier; instead almost all the service centre would be kept open.
- The Cabinet has decided to ditch tradition and not to appoint the deputy-finance minister as the chair of the Public Investment Corporation. Instead it opted for former Eskom and Nedbank chair, Reuel Khoza, a decision that Finance Minister Mboweni is describing as a decisive moment for the PIC to “go corporate.” Other new directors include Maria Ramos, the former ABSA CEO. Khoza said the board is to restore stability and the search for a CEO will start soon.
- The Legal Practice Council will deliberate today on whether Public Protector Busisiwe Mkhwebane should be struck off the roll. This is after non-profit organisation Accountability Now wrote to the council following the judgement by the Constitutional Court that the ombudsman acted in bad faith and put forward a “number of falsehoods” in the Absa/Bankorp case. Meanwhile the ombudsman has set her sights on SARS commissioner Edward Kieswetter and again on Public Enterprises Minister Pravin Gordhan; probing Kieswetter’s appointment and a second person that allegedly moved with Gordhan to all the departments he has been in charge of. Her office says the PP has received two complaints.
- While the PP is facing the possibility of being struck off the roll, Steinhoff’s former CEO, Markus Jooste has been told by the South African Institute of Chartered Accountants that his disciplinary hearing will go ahead, despite the fact that Jooste tendered his resignation as a CA in South Africa a month ago. SAICA says they will go ahead with or without Jooste’s input.
- The lights are still on in Johannesburg despite the city’s electricity company City Power being hit by a ransomware virus. The company announced on Twitter that it has been targeted by hackers who have encrypted all its databases, applications and network. City Power said the attack did not affect the grid, but the access to City Power’s website and online power purchases have been affected.
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