By Linda van Tilburg
- The county is bracing itself for travel chaos as SAA has cancelled all of its flights scheduled for today and tomorrow to minimize the impact of disruptions from strike action by its workers. Two unions which represent 3,000 staff members rejected the latest wage offer from SAA saying they will be on strike “indefinitely” to protest the carrier’s failure to meet their pay demands and plans to fire 944 employees. The two unions involved in the strike action also plan to approach the Labour Court to seek an urgent interdict against the retrenchments. Partner airlines including SA Express, Mango, SA Airlink and codeshare partners and flights operated by Star Alliance will not be affected. It comes as SAA lost more than R28bn over 13 years and is reliant on government bailouts. The upheaval at SAA is likely to be a precursor to labour action at other state-owned enterprises who are trying to trim their bloated wage bills. Eskom says it has about 16,000 staff more than it needs.
- Pepkor has issued a trading statement saying they were expecting higher earnings for the present financial year. The company that is a subsidiary of Steinhoff and owns Incredible Connection, Pep and Ackermans among other companies said that in a difficult trading environment; the group’s businesses have perform well, but the performance of the Building Company, which contributed to 13% of Pepkor revenue continued to be “adversely impacted by the contraction in the building materials market during the 2019 financial year.” Earnings per share is expected to be between 57.6 cents and 65.1 cents which is 22.1% to 32.1% lower than the 83.6 cents of the corresponding year.
- Sappi, the world’s biggest producer of pulp halted dividend payments after the impact of the US trade war with China triggered a collapse in the price of dissolving wood pulp – the South African company’s main product. An initially strong start to the year was unfortunately offset by weak graphic-paper markets and lower dissolving wood pulp prices driven by the ongoing trade wars and slower economic growth in various geographies,” said Chief Executive Officer Steve Binnie. The company is reducing capital expenditure to help mitigate the market lull, Sappi said, yet remains optimistic for dissolving wood pulp in the longer term. Shares fell as much as 5.4.% on the Johannesburg Stock Exchange in early trade but manage to claw back and ended the day on 3.51% higher.
- Mining production increased by 0.2% year-on-year in September after a 3% decline in August, which is above the expectations of analysts. Statistics South Africa has reported that the largest positive contributors to the increase were iron-ore which jumped by 8.2% while other non-metallic minerals increased by 13.6% and other metallic minerals registered a 38% rise. The largest negative contributors were diamonds with a 15.7% decrease in output, manganese ore with a 7.3% decrease and platinum group metals where output fell by 2%. Mineral sales increased by 15% year-on-year in September and the largest positive contributors were gold producers.
- South Africa’s hedge fund industry is betting on new rules to help reverse a record drop in assets under management. New guidelines from January 2020 will split funds into different investment categories and geographical exposure so local investors can make better comparisons. They will also allow hedge funds to be stacked against long-only equity or fixed-income funds and help the industry body compile uniform data. Like their global peers, South African hedge funds are facing more competition from passive funds, while meagre returns have intensified scrutiny on fees. With only 2% of the country’s $150bn in savings in alternative assets, the industry is counting on greater transparency and efforts to further open up who can invest in the funds to spur a revival.
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