Investors dump SA bonds; Ramaphosa to meet Buhari; Classic FM business rescue; Aspen, Woolies

By Jackie Cameron

  • There’s still a month to go until Moody’s Investors Service reviews South Africa’s sovereign rating, but foreign investors aren’t taking chances, reports Bloomberg. Overseas ownership of South African government debt fell to 37% of the total at the end of August, from as high as 43% in March 2018, according to National Treasury data. That, says Bloomberg, is the lowest level since February 2017, suggesting some investors aren’t waiting for Moody’s to downgrade the country to junk – a move which would see it removed from Citigroup Inc’s World Government Bond Index, sparking forced sales by investors who track the gauge.
  • A gauge measuring sentiment in South Africa’s manufacturing industry fell to the lowest level in more than a decade in September and it will probably get worse, says Bloomberg. Absa’s Purchasing Managers’ Index, compiled by the Bureau for Economic Research, fell to 41.6 from 45.7 in August, the Johannesburg-based lender said in an emailed statement on Tuesday. That’s the lowest level since August 2009. The median estimate of three economists in a Bloomberg survey was 46.5. The gauge has been below 50 for all but one month this year, indicating contraction in the manufacturing industry, says the news agency.
  • South African President Cyril Ramaphosa will host Nigerian President Muhammadu Buhari for talks, weeks after xenophobic violence strained economic ties between the two nations, says Bloomberg. Nigeria recalled its high commissioner and evacuated some of its citizens last month after a spate of attacks in South Africa left at least 12 people dead, two of them foreigners. Protests in Nigeria over the violence targeted South African companies including mobile-phone giant MTN and grocer Shoprite.
  • African Media Entertainment has told shareholders that the company has been informed by the board of directors of Classic FM that a resolution was adopted approving the voluntary commencement of business rescue proceedings in terms of the Companies Act, 2008. The board of that company believes that Classic will remain on air. More on that on
  • Protesters and police battled across Hong Kong in the some of the most serious clashes since widespread unrest began in June, with a demonstrator shot by police for the first time. Simultaneous rallies against Beijing’s increasing grip raged across the financial hub hours after President Xi Jinping oversaw celebrations marking 70 years of Communist rule in China. Xi presided over a military parade through the centre of the capital and called for the country’s “complete unification”.
  • British Prime Minister Boris Johnson will present a new plan for a Brexit deal to the European Union within days, but there are already signs it may fail, says Bloomberg. The Irish government responded to a leak of an earlier version of the proposals to say it was a “non-starter”, continues the news wire. “If Johnson fails to come up with something workable this week, then Britain could be on course to crash out of the bloc without a deal. That would mean a showdown – and probably a battle in court – between the government and members of Parliament, who are trying to force Johnson to delay Brexit,” says Bloomberg. The key sticking point remains how to ensure there are no checks on goods crossing the land border between the UK and Ireland, it adds.
  • The big mover of the day on the Johannesburg Stock Exchange was Aspen, with its share price perking up nearly 5% by the end of the day. This follows an announcement earlier in the week that the Public Investment Corporation was upping its beneficial stake in the company to 15%. Among the big losers on the JSE on Tuesday was Woolies, which shed about 2% as the company continues to be punished for failing to make Australian acquisition David Jones work for shareholders.