Flash Briefing: Eskom employees earn R740k, want much more; corrupt ANC cadres must be jailed – investors; Rand; crypto

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  • Investors in South African assets need a lot more convincing that the government crackdown on corruption will prove effective. The rand strengthened, government bond prices climbed and the benchmark stock index hit a one-week high after the ruling African National Congress suspended its secretary-general Ace Magashule after he defied an ultimatum to vacate his post. Gryphon Asset Management’s Cassie Treurnicht, portfolio manager said: “They can suspend everyone, but the key lies with prosecuting them. Those accused need to be prosecuted and prosecuted hard before investors will take note. Singling out a few will also do no good. Prosecutors need to be given free rein to put those behind bars that belong there. There is still a long way to go. We remain skeptical. The rand will continue to take its cue from commodities.”
  • Lebanon has acted against a Turkish company that operates floating electricity plants and is linked to a South African state energy programme that has been put on hold in connection with corruption allegations. The Lebanon National News Agency reports that the power-generating ships – part of Turkey’s Karadeniz energy group – have been seized and prevented from leaving Lebanon, with a probe in connection with commissions. A gas company has sued to halt a South Africa’s state program to procure emergency supplies, alleging that it was approached for a bribe.
  • The average salary at Eskom is R737,000 but workers want 15% more, reports MyBroadband.co.za. The power utility is currently in talks with the National Union of Metalworkers of South Africa (NUMSA), National Union of Mineworkers (NUM), and Solidarity regarding a wage deal. The two biggest unions – NUMSA and NUM – are seeking a 15% wage increase while Solidarity wants a 9.5% increase for its members. Eskom said these salary increases are unaffordable and asked the unions to revise their demands downwards.
  • The Financial Sector Conduct Authority has withdrawn a cautionary notice warning that cryptocurrency business OVEX is not authorised to operate. In a statement, the regulatory authority says that OVEX is in correspondence with the FSCA because it believes that its business model does not require it to obtain a financial services provider licence, as it does not conduct financial services. The FSCA is currently investigating these matters and therefore withdraws the previous media release until such time as the investigation is completed.
  • Bloomberg reports that the Dogecoin frenzy is reaching fever pitch as Elon Musk prepares to host Saturday Night Live with speculation he’s poised to talk up his beloved token. Coinbase Global, the largest US digital-asset exchange, plunged to a record low this week partly because it doesn’t offer enough speculative coins like Dogecoin. Investors fled high-flying US market newcomers this week.“We saw a mini-bubble in SPACs, IPOs, crypto, clean-tech and hyper-growth in late 2020 and early 2021 and many of these asset classes are nursing bad hangovers,” said Mike Bailey, director of research at FBB Capital Partners.
  • South Africa is on track to receive enough Covid-19 vaccines to cover about two-thirds of the population by the end of the year, made up of both Pfizer Inc. and Johnson & Johnson doses. The country has secured orders for 52.6 million shots, including 31.2 million of the single-dose J&J version, President Cyril Ramaphosa told parliament on Thursday. They are due to be delivered gradually over the rest of the year, although about half won’t arrive until after September.

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