Bleak outlook for SA GDP; Capitec earnings loss of 70%; Ex-Eskom CEO in hot seat; Edgars

By Claire Badenhorst

  • A bleak second-quarter GDP figure is expected to be announced later today. The rand, which gained a bit of ground against the dollar recently, weakened again on Monday thanks to several factors, including tensions within the ANC and the threat of increased blackouts. According to Statistics South Africa, the South African economy recorded its third consecutive quarter of economic decline, falling by 2% in the first quarter of 2020. The Reserve Bank also expects that the economy will contract by 7% this year, leading to widespread unemployment. According to economists polled by Reuters, the GDP figure could be the worst we have seen in 100 years. They believe it will also “offer insight into a budget deficit” that could rise to around R700bn or more.”
  • Eskom has suspended the managers of two power stations reportedly for “apathetic behaviour”. This follows an increase in blackouts since July after about four months of steady power supply. The state-run power utility appears to be testing a new strategy where it holds managers at power stations accountable for loadshedding. In a statement, Eskom said it suspended the managers of the Tutuka and Kendal power stations and that further interventions are ongoing at the Kriel and Duvha power stations.
  • Capitec warned its shareholders to brace for an earnings loss of at least 70% in a trading update for its half-year ending August 31. The bank blames the impact of Covid-19 on its customers for the poor interim results at a time when its share price had already plummeted 40% this year. The financial results should be published by the end of the month.
  • Ex-Eskom CEO Tshediso Matona was in the hot seat at the state capture inquiry on Monday. Matona was suspended in 2015 for reasons he said he did not understand. According to Matona, he was assured by Eskom that he had done nothing wrong and while he has no proof to support his claims, he suspects he was removed to make way for others to be put into key positions. Matona also said that former President Jacob Zuma assured him at the time that his suspension was not a reflection of his professional character.
  • Finally, Edcon announced that the Competition Tribunal has approved the sale of parts of Edgars to Durban-based retailer Retailability, which will save about 5,200 jobs. The approval confirms the successful progress of the business rescue plan, which includes the sale of up to 131 Edgars stores. For the full release, visit BizNews.com.