Bank strikes; Moyo hits Old Mutual – again; Petra big diamond find; SA Eurobonds a hit; More Brexit drama

By Jackie Cameron

  • South African banks are urging clients to use digital channels as the industry prepares for what could be its biggest strike since 1920. “Banks will be operating as usual on the day,” the Banking Association South Africa is quoted as saying in an emailed statement on Monday. Lenders “are taking the necessary precautions to minimise disruption” related to the proposed protest action on Friday by the South African Society of Bank Officials and the Congress of South African Trade Unions, it said. The planned demonstrations, according to Bloomberg, will mainly target lenders that have consulted staff over job cuts in recent months. Some South African banks, such as Standard Bank and Absa, have reduced branch networks and reorganised other units as they digitise their operations. The companies are also seeking ways to lower costs as they contend with slow economic growth. Cosatu, the nation’s largest-labour union federation, has about 1.8 million members, while Sasbo has 73,000, says the news wire.
  • Old Mutual’s dispute with Peter Moyo was pushed out after the South African insurer’s fired chief executive officer was granted leave to add evidence to a contempt of court charge he brought against the company, says Bloomberg. This could drag out the battle by at least another month. Old Mutual’s dispute with Peter Moyo was pushed out after the South African insurer’s fired chief executive officer was granted leave to add evidence to a contempt of court charge he brought against the company. Further arguments in the case will be heard after the parties have submitted their heads of arguments and responses, according to the ruling, delivered in the Johannesburg High Court on Monday. That could take about a month, Old Mutual spokeswoman Tabby Tsengiwe said at the court.
  • Petra Diamonds has found a 20.08 carat blue stone at its flagship mine in South Africa, offering some relief to a miner struggling with weak demand and a mountain of debt, says Bloomberg. Petra Diamonds has found a 20.08 carat blue stone at its flagship mine in South Africa, offering some relief to a miner struggling with weak demand and a mountain of debt. The company said it found the gem quality Type IIb diamond at its Cullinan mine, famous for producing expensive gems, including those in the British crown jewels. While Petra gave no forecast on the price, blue gem quality stones are among the most valuable in the world. Petra’s share price has collapsed to a record low amid falling diamond prices and concerns that it will struggle to repay debts. Last week it wrote down the value of its mines by almost $250m and said co-founder and Chairperson Adonis Pouroulis will depart, after its long-serving chief executive officer left earlier this year.
  • South Africa raised $5bn in its biggest Eurobond sale to date, offering returns that compensated investors for increasing fiscal problems, says Bloomberg. Emerging-market sovereign borrowers are returning to international debt markets as stimulus from central banks cuts borrowing costs and investors chase yields again.
  • South Africa is to sell electricity to Zambia, which has a massive shortfall. As Bloomberg reports, Zambia will import electricity from South Africa starting next month to help plug a severe deficit that’s causing daily power cuts lasting about eight hours. State-owned Zesco concluded talks with South Africa’s Eskom last week to buy as much as 300 megawatts for six months, Webster Musonda told Bloomberg reporters in Lusaka, Zambia’s capital. The country has a shortfall of 700 megawatts, about a third of peak demand, after drought curbed output at the hydropower stations that it depends on for 80% of generation.
  • More Brexit drama, after the UK’s Supreme Court found that Prime Minister Boris Johnson unlawfully suspended Parliament to frustrate its ability to “carry out its constitutional functions”. The UK Supreme Court dealt an unprecedented legal rebuke to Prime Minister Boris Johnson, branding his controversial decision to suspend Parliament unlawful and giving lawmakers another chance to frustrate his plans for Brexit, says Bloomberg. Labour leader Jeremy Corbyn, at his party’s annual convention, said he wants a general election, but only after the threat of a no-deal exit from the EU on Oct. 31 is off the table. In his speech, Corbyn set out his pitch to voters ahead of the election he expects soon, says Bloomberg.