Oil price shock: What it means for SA; Sasol soars; BMF backs Moyo; Eskom advertises for expensive help

By Jackie Cameron

  • The oil price spike has rocked financial markets, with good news and bad news for South Africa. The record oil-price surge after a drone strike on a Saudi Arabian oil facility couldn’t come at a worse time for a world economy already in the grip of a deepening downturn, reports Bloomberg. While the severity will depend on how long the price spike endures, the development will further erode business and consumer confidence that already are fragile amid the US-China trade dispute and slowing global demand. A manufacturing slump around the world is hammering growth in export powerhouses China and Germany. The oil shock comes amid a flurry of warning signs for the global economy. Data out of China on Monday included the worst single-month reading for industrial output since 2002. In July, the International Monetary Fund reduced its global growth outlook – already the lowest since the financial crisis – to 3.2% this year and 3.5% next; a rate of 3.3% or lower would be the weakest since 2009. Emerging economies nursing current account and fiscal deficits – like India, South Africa and others – run the risk of large capital outflows and weaker currencies. Exporting nations will enjoy a boost to corporate and government revenues, while consuming nations will bear the cost at the pump, potentially fanning inflation and hurting demand. As the world’s biggest importer of oil, China is vulnerable to rising crude prices, while many countries in Europe also rely on imported energy. Sasol jumped 10% on the JSE as investors absorbed the news of drone strikes on Saudi Arabian oil facilities.
  • South African entrepreneur Elon Musk hired a private eye to dig up dirt on a cave diver who insulted a SpaceX rescue craft, and claims that calling someone a ‘pedo guy’ is a South African insult that refers to a creepy man rather than a sexual predator. Bloomberg tells how Musk revealed that he hired a private investigator for $50,000 to back up his assertion in a 2018 tweet that a British caver was a “pedo guy.” Musk is now asking a judge to forgo a trial and a throw out a lawsuit by the caver, Vernon Unsworth, accusing the chief executive officer of Tesla and SpaceEx defamation. “By referring to Mr. Unsworth as ‘pedo guy,’ I did not intend to convey any facts or imply that Mr. Unsworth had engaged in acts of pedophilia,” Musk said in a court filing Monday. “Pedo guy was a common insult used in South Africa when I was growing up. It is synonymous with ‘creepy old man’ and is used to insult a person’s appearance and demeanour, not accuse a person of pedophilia.” Musk revealed that one of his trusted aides commissioned a private investigator to conduct an investigation of Unsworth on Musk’s behalf. Unsworth’s lawyers didn’t immediately respond to requests for comment, adds Bloomberg.
  • The Black Management Forum has backed former Old Mutual CEO Peter Moyo in his boardroom battle with former finance minister Trevor Manuel. As Fin24 reports, the Black Management Forum has accused Old Mutual and its chair Trevor Manuel of disregarding the courts and the rule of law after Manuel referred to a judge presiding in the insurer’s case against its former CEO Peter Moyo as “a single individual who happens to wear a robe”. Manuel on Friday made the remarks about Judge Brian Mashile at a media briefing. The former finance minister reportedly said the company had been hamstrung by a ruling which barred the firm from appointing a new CEO. “We are ready to rock and roll… Judge Mashile’s judgment says we can’t; it’s another strange kind of situation. I am saying the Act is abundantly clear on the responsibilities of the directors… and you get that overturned by a single individual who happens to wear a robe,” said Manuel. As Fin24 previously reported, he later retracted the reference to the judge after a journalist confronted him about it.
  • Eskom is about to spend a lot more of taxpayers’ funds – this time on advisers to help its bosses manage a government bailout package. Eskom, the state-owned South African power utility with about $30bn of debt, sought advisers on how to implement a government bailout seven months after President Cyril Ramaphosa said the company would be reorganised. Eskom issued an invitation to tender for “financial services for implementation for government support package” on Aug. 23, according to a document seen by Bloomberg.