BizBytes – Monday, 12 June 2023
Monday, 12th June 2023
Rand strengthens on investor sentiment and BRICS summit speculation
The rand continued to strengthen on Monday, following positive investor sentiment towards the country's economy. The rand was trading at this R18.56 against the dollar this afternoon , representing a 0.87% increase from Friday's closing level. Meanwhile, the dollar saw a slight rise to 103.450 against a basket of global currencies. Analysts attribute the rand's gains to a decrease in power cuts within the country and speculation that the BRICS summit could be relocated from Johannesburg due to an International Criminal Court arrest warrant for Russian President Vladimir Putin. (Reuters)
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Ace Magashule's house of cards tumbles: Expelled from ANC
Former ANC secretary-general Ace Magashule has been expelled from the party due to his refusal to apologise for suspending President Cyril Ramaphosa in 2021. The decision was made by the national disciplinary committee (NDC) after Magashule failed to provide any representations within the given seven-day period, as reported todat by Business Day. This expulsion puts Magashule, a prominent member, in a politically isolated position. The ANC spokesperson, Mahlengi Bhengu-Motsiri, confirmed the final sanction of expulsion.
Tech Companies scale back on Work-from-Home
According to the Wall Street Journal, tech companies are pushing for employees to return to the office. The debate surrounding the optimal amount of in-office work is particularly prominent in the tech industry due to its early advocacy for remote work and subsequent need to streamline workforces. Companies like Google, Lyft, Meta, and Salesforce have recently scaled back remote-work policies or become stricter in enforcing existing ones, as they believe that working in the office is more efficient and cost-effective. While surveys indicate that workers still value flexibility, their job prospects have diminished, giving employers the upper hand and encouraging them to emphasise in-person collaboration.
Eskom latest: Mozambique Supplies 100MW; Respite From Outages
Mozambique will supply electricity-starved South Africa with 100 megawatts of power immediately and an additional 600 megawatts in six months' time, Electricity Minister Kgosientsho Ramokgopa said.
A further 1,000 megawatts will be supplied in the long-term, he said at a briefing.
Eskom suspends rolling power cuts as generation units return to service (June 11, 2:47 p.m.)
South Africa's state-owned power utility suspended rolling power cuts until 4 p.m. on Monday after three generation units returned to service. Eskom Holdings SOC Ltd., will then cut 3,000 megawatts of power from the grid from 4 p.m. until 12 a.m. Monday through Wednesday, it said in a statement on Twitter.
Eskom Chairman Says Utility's Better Performance Not a Fluke (June 9, 5:44 p.m.)
Eskom Chairman Mpho Makwana said the recent improvements in electricity generation are not a fluke. The utility's better performance was partly due to a decision to scrap the post of chief operating officer and give individual plant managers more direct access to senior executives which had improved morale, he said in an interview at Bloomberg's Johannesburg offices. -Bloomberg
South African government invests R233.6 Billion in state-owned enterprises, receives meagre R1 million dividend
The South African government has provided a total of R233.6 billion in bailouts to state-owned enterprises (SOEs) over the past five years, with only R1 million received in dividends, as reported by MyBroadBand. The largest bailouts went to Eskom (R181.6 billion), Denel (R9 billion), and SAA (R37 billion). Transnet received R5.8 billion, while Safcol and Alexkor received no bailouts. This equates to a negative return of -99.99957%, indicating significant losses for the government. These figures highlight the deteriorating state of these SOEs despite the substantial financial support.
South African government plans to install smart meters to control geysers and reduce load-shedding
South Africa's Electricity Minister, Kgosientsho Ramokgopa, reaffirms the government's strategy to combat load-shedding by implementing smart meters to remotely manage geysers in households as reported by MyBroadBand. Geysers contribute to a significant portion of electricity consumption, and turning them off when not in use can save up to 3,500MW. The government aims to decrease demand from geysers by at least 1,000MW. The installation of smart meters, estimated to cost R3,000, will enable remote control via smartphones and push notifications to remind users to switch off their geysers, ultimately reducing pressure on the grid.
Concerns raised over possible unapproved exemptions from load-shedding in South Africa
The CEO of Organisation Undoing Tax Abuse, Wayne Duvenage, and energy expert Chris Yelland have expressed worries about certain areas in South Africa potentially being exempted from load-shedding without proper regulatory approval, as reported by MyBroadBand. The National Energy Regulator of South Africa (Nersa) has not received any exemption applications since 2017 when regulations were put in place. Nersa has also admitted to not auditing power distributors for fair implementation of load-shedding. Duvenage and Yelland believe this lack of oversight opens the door to corruption. Exemptions in certain regions, such as Tshwane and Centurion, have raised suspicions among residents and property agents, with concerns ranging from corruption to technical issues with sensitive substations.
South African business leaders positive as government takes steps to address country's critical issues
South African business leaders left a meeting with President Cyril Ramaphosa feeling positive and enthusiastic about the government's efforts to address the country's most pressing issues. The meeting aimed to coordinate partnerships between the state and businesses to tackle crises in energy, logistics, and crime. Business Leadership South Africa (BLSA) CEO Busi Mavuso described the meeting as genuine and positive, reigniting enthusiasm for collaboration between business and government. CEOs will work alongside the government in each priority area, drawing on their expertise and supported by business structures. The partnership is seen as a long-term commitment to resolving challenges through investment and multi-year projects. [Source: BusinessTech]
PGA Tour's Decision to Partner With LIV Golf's partner: Follow the money
Sports Illustrated reports that the PGA Tour spent $50 million on legal battles with LIV Golf and used an additional $100 million from its reserves for increased purses and bonuses. Concerned about dwindling reserves and competition from a well-funded foreign entity, the Tour sought the alliance with LIV Golf's backer. The specific reasons behind the partnership and its implications for the future are yet to be determined.
Telkom soars as consortium led by former CEO Sipho Maseko makes bid for controlling stake
Telkom SA, the state-owned telecommunications company in South Africa, experienced a 12% surge in its stock after confirming that it has received a bid from a consortium of investors, including former CEO Sipho Maseko. The group, consisting of Afrifund, Axian Telecom, and the Government Employee Pension Fund managed by the Public Investment Corp., sent an unsolicited letter expressing interest in acquiring a controlling stake in Telkom. However, Telkom emphasised that the discussions are in the early stages, and there is no guarantee of a transaction. The company has requested further clarity on the proposed offer price and funding certainty from the consortium. Telkom has struggled to keep pace with its larger rivals, Vodacom Group and MTN Group, and has experienced challenges such as power outages and infrastructure vandalism. The bid by the consortium reflects the perceived undervaluation of Telkom's assets, according to analysts. The company had previously faced an offer from MTN but no deal materialised. -Bloomberg
China expresses support for South Africa hosting BRICS activities amid potential venue change
In a phone call between President Xi Jinping and South African President Cyril Ramaphosa, China reaffirmed its support for South Africa's hosting of various BRICS activities this year. The call comes as South Africa considers changing the venue of an upcoming summit to avoid executing an international arrest warrant for Russian President Vladimir Putin, issued by the International Criminal Court. China, a non-member of the ICC, did not mention the possibility of hosting the summit but expressed willingness to enhance bilateral ties and advance the interests of developing nations. -Bloomberg
Rupert accuses Mpumalanga municipality of trying to "scam" Leopard Creek golf estate.
In Business Day this morning, Johann Rupert, founder of Leopard Creek golf estate, accuses the local Nkomazi municipality of scamming its members by quintupling rates after a decade of lower charges. The estate, known for its self-sufficient infrastructure, recently won a court battle against the municipality over property valuation. In an interview with the newspaper, Rupert, chairman of global luxury goods group Richemont, says Leopard Creek is off the grid and merely pays rates as a gesture of goodwill. He criticizes the municipality for hindering investment in the area, affecting plans to build hotels. This situation highlights the challenges South African municipalities face, with many struggling to deliver services, leading to companies and individuals seeking alternatives.