NewsWrap Ep 3 – Inside track on ructions at Comrades, Joburg, Tongaat; and why Buffett sold Apple.
Editor Alec Hogg and the BizNews team provide context on the biggest stories of the past week. Covered this week are the governance mess in the Joburg Metro; board level corruption called out at the Comrades Marathon Association; why shareholders rejected an opportunistic takeover bid for bankrupt Tongaat Hulett – and the real reason why Warren Buffett's Berkshire Hathaway sold 500m shares in Apple Inc.
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Transcript of the video ___STEADY_PAYWALL___
Good evening
First up, let's recap on the latest news headlines…….….
EFF Deputy President Floyd Shivambu has resigned from the political party he co-founded with its president Julius Malema, his co-accused in the VBS scandal. Shivambu was central to the EFF's negotiating stance ahead of the creation of South Africa's post-election Government. The party made his appointment as finance minister a precondition to a coalition with the ANC. Malema said at a press conference today that Shivambu's resignation and subsequent joining of Jacob Zuma's MK Party surprised him.
The South African Health Professionals Collaboration, representing over 25,000 healthcare workers, will not sign President Cyril Ramaphisa's Health Compact. It says it is nothing more than an attempt to lock in support for the controversial NHI Act. The organisation is demanding urgent engagement with the President to develop health reforms that genuinely benefit patients and the country.
Standard Bank Group reported 22 billion rand in headline earnings and an 18.5% return on equity for the first half of 2024. CEO Sim Tshabalala attributed the strong performance to franchise growth, digital adoption, and strategic capital allocation. An 8% higher interim dividend of 744c a share was declared. The company's share price is 6% higher year to date, capitalising the business at 372 billion rand.
Iron ore prices hit their lowest level since 2022 as global supply continues to outpace demand with China's steel production falling a further 9% in the last month. Iron ore futures prices are now below $94 per ton, down from over $143 in January. The share price of JSE-listed Kumba Iron Ore fell 7% in the past week, taking its fall so far this year to 40%, valuing the business as worth 118 billion rand.
The Western Cape's expanded unemployment rate dropped to 27.3% in Q2, 15.3 percentage points below the national average and 11.9 percentage points below that of Gauteng, the next best performing province. The Western Cape also has the lowest narrow unemployment rate at 22.2%.
US inflation dropped to 2.9% in July, the lowest since March 2021 and below the market's expected 3%. This strengthens the case for a quarter-percent Federal Reserve rate cut in September. The latest figures suggest the Fed's efforts to curb inflation are working. Headline inflation is expected to slow to 2.5% over the next few months but looks unlikely to hit the targeted 2% this year.
Columbia University President Minouche Shafik resigned amid protests over the Gaza conflict and accusations of antisemitism, becoming the third Ivy League leader to step down. The Egyptian-born economist follows counterparts at Harvard and UPenn. Shafik cited ongoing turmoil and divergent views within the community.
In BizNews's best read story of the moment, the Comrades Marathon faces a major scandal as runners clash with the board over alleged industrial scale corruption. The dismissal of race manager Ann Ashworth, who had exposed board members' misuse of funds, triggered calls to oust two board members at a special general meeting being held in Pietermaritzburg tonight. I spoke to insider and 10 times Comrades finisher Stuart Mann…..
Still in the KZN Midlands, a long battle between the DA run uMngeni municipality and the ANC controlled Msunduzi are coming to a head. Here's uMngeni mayor Chris Pappas…..
In a week where much of the news is in the political economy, Johannesburg Mayor Kabelo Gwamanda resigned after 15 turbulent months amid growing public anger over political gridlock and collapsing public services. His exit, welcomed by the Johannesburg Crisis Alliance, opens the way for ANC nominee Dada Morero as the new mayor, ensured through apparent support from Herman Mashaba's ActionSA. Not so fast…….it's no longer certain that Action SA will play ball….. here's what Mashaba told my colleague Chris Steyn this morning…
So unless there's a reverse in the ANC's approach, Joburg residents could wait long before a turnaround begins. DA councillor Martin Williams, a former editor of The Citizen newspaper, summed up his views in this interview with Chris earlier in the week.
Before we move onto the business front, here are two follow-ups from last week. First, in UIM leader Neil de Beer's Sunday afternoon chat with Chris Steyn, he addressed the divorce between the FF+ and the DA, referencing an interview on Kyknet in which an out-of-character Corne Mulder lost his cool….
Chris also discussed the White River military training camp story with Manabela Chauke, CEO of the Private Security Industry Regulation Authority. The National Prosecuting Authority announced today that the 95 Libyans arrested at the camp last week will be deported. They will not be charged.
The sad tale of KZN's one-time corporate giant Tongaat Hulett grinds on after an opportunistic attempt by an organisation called Vision, headed by Robert Gumede, was turned down by shareholders of the insolvent company. Earlier today I spoke to Dave Woollam, a chartered accountant and former FD of a major South African bank representing one of the three large shareholder groups…
We close off this week with insights from our Bloomberg partners on why Warren Buffett sold over 500 million shares in tech group Apple. Buffett's Berkshire Hathaway banked $20bn from an investment of under $3bn seven years ago. Matthew Palazola was Wall Street's #1 ranked insurance analyst at Merrill Lynch. He is now at Bloomberg Intelligence…….
Until next week. I'm Alec Hogg of BizNews.com.
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