Rand battered by Powell; BAT smoking hot; Woolies takes Aussie hit; Discovery blocks Liberty; Post Office CEO quits

By Linda van Tilburg

  • The Rand has weakened with other emergency currencies after the Federal Reserve Chairman Jerome Powell’s cut lending rates but ruled out extending the cycle. Stocks on the MSCI emerging-market index fell for an eighth day and the sovereign bonds of South Africa, Turkey, Russia and Brazil were among the biggest casualties. The rand traded at R14.52 to the dollar at the close of the JSE. But the JSE All Share Index was lifted by Rand hedges gaining 0.77% yesterday.
  • British American Tobacco shares jumped by 8.66% as its first-half profit beat analysts’ estimates as smoking alternatives cushioned the decline in cigarette sales. Revenue from heated tobacco and vaping increased by 27%. Adjusted profits rose by 5.9% to £5.21bn. Naspers shares also surged by 3.87% after gains in its Hong Kong listed, Tencent. Tencent announced it will be working with Qualcomm. There was a drastic drop in the value of Sappi shares after third-quarter sales slipped to $1.37bn from $1.44bn in the previous year. UK property company Intu shares dropped another 7%, while some of the miners were in the red today with a decrease of 6.5% for Assore, Exxaro was down 5.4% and Kumba Iron ore and Anglo Platinum dropped by more than 4%.
  • Woolworths has taken a new hit against its Australian arm, writing down the value of its Aussie department store chain for a second time. The weak performance of David Jones has resulted in an impairment charge of A$437.4m. That brings write-offs at the Australian business to about A$1.15bn following a similar downgrade in January last year. Woolworths shares fell by 2.75% in early trade. Fashion, beauty and its home division returned to growth in the second half of the fiscal year, while food sales rose 8.4% over the same period.
  • Insurer Discovery is accusing Liberty of using its incentive program Vitality without permission. Vitality offers its 1.9 million customers discounts and cash back on Discovery’s life-insurance and credit cards for exercising and buying healthy food. Liberty has launched its Wellness Bonus, which cuts premiums for clients who are part of a program like Vitality or Momentum Metropolitan program called Multiply. Discovery is asking the Johannesburg High Court to block Liberty from using Vitality, alleging that the competitor is making unlawful use of its intellectual property. Liberty denies any infringement, accusing Discovery in its court filings of attempting to stifle competition. Momentum has said while it has no intention of pursuing legal action against Liberty, it is monitoring the situation.
  • The Post Office’s CEO Mark Barnes has resigned citing differences on a forward strategy to restructure the SA Post Office group, in particular the location of Postbank. The board has appointed the present CFO Lindiwe Kwele as the interim group CEO. Barnes has received the support of the Communication Workers Union who said his resignation will have devastating consequences for the Post Office and its workers. The union says members have reported to them that the Post Office was becoming stable under Barnes’ leadership.