Another interest rate cut on the cards; Bidvest profit drop; AngloGold Ashanti

By Claire Badenhorst

  • It’s a big week in South Africa ahead of a possible interest rate cut on Thursday. The South African Reserve Bank (SARB) will hold its three-day policy meeting from today with its rates decision taking place on Thursday. Ahead of the possible rate cut, the rand was looking steady at R16.66 per US dollar on Monday morning. This was after it recovered from a R17 slump following worse-than-expected GDP results last week. Interest rates have been cut by 300 basis points so far this year in an effort to help cash-strapped consumers who are feeling the pinch created by Covid-19. In a poll conducted by Reuters, 15 economists said the repo rate would hold while 10 predicted a modest 25 basis point cut to 3.25%.
  • For the year to end-June, Bidvest posted a 23% drop in headline profit. Despite this, revenue from continuing operations was slightly higher than last year at R76.5bn and the company generated R9.2bn in cash from operations – a 38% increase from 2019. Several of its business-to-business services were impacted by lockdown and the group not only had to retrench across its six divisions, but it also decided to discontinue Bidvest Car Rental.
  • AngloGold Ashanti has sold the last of its remaining mines in South Africa to Harmony Gold. In February, Harmony agreed to purchase the last assets in the country for about $300m. This includes Mponeng near Carletonville which is the world’s deepest gold mine. The mine ministry approved the sale as long as AngloGold Ashanti does not delist from the Johannesburg Stock Exchange.
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