BizBytes – Thursday 8 June 2023

Thursday, 8th June 2023

Today’s big movers among the JSE’s Top 100 companies – from Sharenet, platinum sponsor of the Fantasy Fund Manager game.

South Africa’s stance on Ukraine-Russia conflict poses risk of billions in export revenue loss

South Africa’s refusal to take a stance on Russia’s war in Ukraine could cost the country up to $32.4 billion in export revenue, nearly 10% of its GDP. The European Union and the US, which together account for a significant portion of South Africa’s exports, may retaliate against its neutrality. Concerns arise as South Africa maintains diplomatic and military interactions with Russia, compromising its perceived neutrality. The risk of losing export revenue and foreign investors is high, attributed to poor policy choices and weak economic performance, according to Ndivhuho Netshitenzhe, an economist at Stanlib Asset Management. -Bloomberg

Messi Spurns $400 Million Saudi Offer to Join Beckham’s Miami

Lionel Messi plans to join Major League Soccer club Inter Miami, turning down a deal from Saudi Arabia that would have paid him $400 million annually. “I’ve made a decision to go to Miami,” Messi said in an interview with Mundo Deportivo. “I still don’t have it 100% closed, I’m still missing a few things, but we’ve decided to continue down that path.” – Bloomberg

PARIS, FRANCE – JUNE 03: Lionel Messi of Paris Saint-Germain looks on as they prepare to take a corner kick during the Ligue 1 match between Paris Saint-Germain and Clermont Foot at Parc des Princes on June 03, 2023 in Paris, France. (Photo by Julian Finney/Getty Images)

Uber and Bolt E-hailing drivers banned from Soweto malls for three months

MyBroadband reports that E-hailing drivers from Uber and Bolt have been banned from picking up or dropping off passengers at malls in Soweto, South Africa, for the next three months. The ban follows clashes between minibus taxi owners and e-hailing drivers at two malls, resulting in injuries and vehicle damage. The agreement states that e-hailing drivers will not enter mall parking lots but can pick up passengers outside the gates, with exceptions for the elderly and disabled. The ban is set to be discussed further in a meeting on June 9, and e-hailing drivers claim the attacks are orchestrated by the Soweto Taxi Association, accusing them of “stealing” business.

Top South Africa Fund Bets on Platinum as Power Cuts Hit Miners

A fund run by one of South Africa’s largest asset managers has altered its approach on platinum, seeing better returns from betting on the physical metal, while offloading shares in companies that produce it as they grapple with a power crisis. Coronation Fund Managers Ltd., which oversees about 623 billion rand ($33 billion), has reduced the Impala Platinum Holdings Ltd. and Northam Platinum Holdings Ltd. shares in its resources fund this year, and cut its position in Anglo American Platinum Ltd. parent Anglo American Plc. The moves reflect strains on miners from a crippling electricity shortage in the world’s biggest producer of the metal. – Bloomberg

Multichoice shares drop 4% on disappointing trading update

In an update for shareholders released on SENS, MultiChoice reported that trading profit and headline earnings for the year to end March will be lower than in 2022. After peaking exactly three months ago, the share price has dropped 35% to a three year low, with a further 4% reported today. The company’s financial performance benefited from subscriber growth and profitability in the Rest of Africa, along with cost savings exceeding targets. However, the challenging South African environment and increased investment in decoder subsidies and marketing for the 2022 FIFA World Cup impacted results. Core headline earnings per share are projected to be higher than the previous year. Earnings per share and headline earnings per share are expected to decline, primarily due to unrealized foreign exchange losses and impairments. Detailed information will be provided in the upcoming financial statements on June 13, 2023.

SA extends special permits for Zimbabwean nationals amidst growing visa applications

South Africa has granted a second extension to special permits, allowing Zimbabwean nationals to live and work in the country until the end of the year. The permits, originally set to expire on June 30, would have forced around 178,000 Zimbabweans to return home. South African Home Affairs Minister Aaron Motsoaledi considered various factors, including increased visa applications and input from affected Zimbabweans, before making the decision. The presence of Zimbabweans and other foreigners in the country has fuelled tensions among some South Africans, leading to sporadic xenophobic violence. -Bloomberg

Bidvest says solid 1H financial performance (Revenue +14%, HEPS +15%) sustained in 2H

In a voluntary trading update for the 10 months to end April, Bidvest says financial performance for the year remains strong, in line with the previous six months. Bidvest’s share price has rebounded sharply this month, up from R237 to over R260 a share. The statement says the company it has capitalised on growth opportunities in agriculture, mining, renewable energy, travel, and tourism industries. The company says its service and trading divisions performed exceptionally well, driven by international travel normalisation, increased demand in various sectors, and improved financial services performance. Working capital investment has peaked, and Bidvest’s international expansion plans are on track, with potential corporate action opportunities in the pipeline. Group results are expected to be announced on September 4, 2023.

Cape Town plans nearly 99% reduction in AMI meter administration fee for power grid feed

MyBroadBand reports that the City of Cape Town (CoCT) intends to significantly reduce its AMI meter administration fee, which is the monthly charge for using the meter to supply power to the grid. CoCT’s mayoral committee member for energy, Beverley van Reenen, stated that the fee would be lowered to R4.92 per month, excluding VAT, in the 2023/24 financial year. Currently, the fee stands at R350 per month. The reduction aims to facilitate the cost-effective sale of excess energy to the grid and encourage the installation of solar systems. Cape Town is also addressing the backlog in solar panel installation applications through an improved online registration system.

South Africa’s current-account deficit narrows more than expected in Q1

South Africa’s current-account deficit shrank to an annualized 1% of GDP in the first quarter, surpassing economists’ estimates, as gold and merchandise exports increased. The country has now recorded a current-account gap for the fourth consecutive quarter. The improved deficit was driven by a widening trade surplus and a smaller shortfall in the services, income, and current transfer account. The data could positively impact the volatile rand, which has been affected by power outages and concerns over South Africa’s relations with Russia. The current-account and budget deficits pose risks to the country’s vulnerability to external shocks. – Bloomberg

DA launches high court challenge against unconstitutional ANC race quotas

The Democratic Alliance is taking legal action against the Employment Equity Amendment Act in South Africa. The DA will approach the Gauteng High Court to declare sections of the act unconstitutional, along with the draft regulations issued last month. The party argues that the act imposes rigid racial quotas instead of numerical targets, violating constitutional rights to equality and freedom of trade. The DA believes the act intensifies race-based social engineering, leading to job losses and economic decline. They emphasise the need to counter these measures politically.

Independent analyst asserts Eskom’s true losses to be around R70 billion, significantly higher than reported figures

As reported by Daily Investor, independent economic and energy analyst Tshepo Kgadima has stated that Eskom’s actual loss for the last financial year – taking into account impairment charges and artificial operating costs – is approximately R70 billion, far exceeding the reported R21.2 billion. While the National Treasury disclosed Eskom’s loss as R21.2 billion, Kgadima asserts that these figures are unaudited and represent earnings before interest, taxes, depreciation, and amortization (EBITDA), not a comprehensive loss. The power utility faces challenges in increasing sales as customers transition to private power production, impacting Eskom’s revenue.

ANC Integrity Commission: Criminals are running ANC … for now

In an inaugural brief to journalists, Rev. Frank Chikane, new head of the ANC’s integrity commission, pledged to tackle corruption and criminality in South Africa. He refuses to be governed by criminals and aims to restore the country’s ethical values, “We need to make sure that criminals don’t take over the country. For now criminals are running us — in terms of Eskom for instance, we have darkness here because criminals are holding us ransom — and we need to break it,” said Chikane. The commission will focus on addressing both criminal conduct and ethical behavior, emphasising the importance of integrity. Chikane highlights the need for the ANC’s leadership to act on the commission’s recommendations, addressing cases that were previously ignored. The goal is to combat corruption nationwide and restore the organisations reputation.

SA to renew extradition attempt for Gupta brothers in UAE

South Africa’s Justice Ministry said it will renew its attempt to extradite Atul and Rajesh Gupta from the UAE. A judicial inquiry into corruption detailed close links between the brothers and former President Jacob Zuma during his nine-year rule, when the government estimates that more than 500 billion rand ($26 billion) was stolen from its coffers. The announcement comes after Justice Minister Ronald Lamola met his UAE counterpart, Abdullah Sultan Awad Al Nuaimi, to discuss “enhancing the partnership in mutual legal assistance and extradition matters.” The South African government has spent millions of rands on efforts to bring the Gupta brothers to justice. The only lawsuit in which the two men have been charged was recently thrown out of court, after the judge labeled the state’s case against them and their co-accused as “lackadaisical.” An appeal is currently under way. -Bloomberg

TigerBrands CEO confirms Piet Viljoen’s prod about insiders accumulating stock at the beaten down prices.

TigerBrands CEO Noel Doyle yesterday invested R1.57m into the company’s shares according to a notice posted on SENS. Doyle bought 10 000 shares on the open market at prices of between R156 and R157.50 a share. Doyle joined TigerBrands from nandos (where he was SA CEO) in 2012 and has been the CEO for the last three and a half years. After touching a recent high of R225 in February, the shares dropped to R150 after poor financial results for the half year to end March, released at the end of May. His purchase confirms money manager Piet Viljoen’s statement in a BizNews interview tis week (click here) that company insiders are buying shares in their own companies, suggesting prices are cheap.

SEC guns for Coinbase, widening its attack on crypto trading platforms

Coinbase, a popular crypto asset trading platform, has been charged by the US’s Securities and Exchange Commission (SEC) for operating as an unregistered securities exchange, broker, and clearing agency. The SEC also accused Coinbase of conducting an unregistered offer and sale of securities through its staking-as-a-service program. The complaint alleges that Coinbase violated registration provisions of the Securities Exchange Act of 1934 and the Securities Act of 1933. The SEC seeks injunctive relief, disgorgement of profits, penalties, and other equitable relief. Coinbase’s holding company, Coinbase Global Inc., is also implicated in the charges. Click here for the SEC’s full statement.

SA-flights to the UK set to be disrupted by strikes for 31 days between end June and end August

Heathrow Airport is preparing for massive disruptions over the next three months as members of the Unite trade union, the security staff who scan bags and travellers at Terminals 3 and 5 – the terminals where SA-serving carriers BA, Virgin, Delta and Emirates land – have given notice of being in strike for 31 days between June 24 and August 27. The dates have been chosen to create the greatest disruption. Heathrow has offered a 10% pay rise plus a one-off payment of £1 150 and an inflation matching increase in 2024. The union has rejected the offer.