Investors don’t like new Eskom boss; SAA scabs; DA will help Cyril – Steenhuisen; Zim inflation 440%

By Jackie Cameron

  • Yields on Eskom’s 2021 dollar bonds jumped the most in more than three months after the appointment of Andre de Ruyter as chief executive officer on Monday, showing that bond investors aren’t showing much faith in the utility’s new boss, reports Bloomberg. The premium of two-year over 10-year dollar yields narrowed, suggesting investors are concerned De Ruyter won’t be able to address the debt-laden firm’s short-term challenges, says the news agency. De Ruyter, currently CEO of packaging company Nampak, has considerable corporate experience, though not at a utility. His appointment comes at a time when Eskom is undergoing a transformation that will require technical and financial knowledge as well as an ability to deal with the government and labour unions. Bloomberg highlights the R138bn ($9.3bn) government bailout, which has bought it just two years to effect a turnaround, and deal with its R450bn of debt.
  • Many SAA workers have ignored the call by unions to go on strike to demand higher wages, says Reuters. A few hundred South African Airways employees have returned to work despite a strike, allowing the airline to resume some regional flights, acting Chief Executive Zuks Ramasia is quoted as saying on Tuesday.
  • The newly elected leader of the opposition Democratic Alliance has promised to work with ANC president Cyril Ramaphosa to help fix South Africa. “The enemies of growth don’t sit across from him, they sit behind him in Parliament,” John Steenhuisen, told journalists. The newly elected head of the Democratic Alliance admitted the difficulty of winning over voters as a white South African, even as he insisted the party will forge ahead with a policy of shunning race-based redress in a nation still grappling with the legacy of apartheid, says Bloomberg. John Steenhuisen, 43, became the interim head of South Africa’s biggest opposition party after it was roiled by the departure of its leader, Mmusi Maimane, outgoing Johannesburg Mayor Herman Mashaba and a number of other key officials, says the news agency. The resignations came after the DA’s share of the vote fell for the first time ever in national elections in May and amid bitter disputes over policy, says Bloomberg.
  • It’s the end of an era for Investec Asset Management. It has announced a change of name and brand identity following its demerger from the Investec Group. Investec Asset Management is ditching the zebra in favour of a salmon pink logo and seascapes and will soon be called Ninety One. The name was chosen because it began as a start-up asset manager in South Africa in 1991. As at the end of June 2019 it manages over £118.9bn for institutional and advisor clients from all over the world, including some of the largest and most sophisticated asset owners. Investec Asset Management has labelled this as “an important milestone on its journey to independence and a stock exchange listing”.
  • Zimbabwe’s central bank halved its key interest rate to 35%, joining the finance ministry in efforts to revive an economy hobbled by years of mismanagement. While the country stopped releasing annual figures in August, the rate is 440%, according to John Robertson, an independent economist in Harare. Bloomberg reports that, While the moves by the monetary and fiscal authorities seek to boost the economy that’s forecast to contract this year, it could drive up price growth in a nation that a decade ago had to abandon its own currency due to hyperinflation that reached an estimated 500 billion percent. The government dropped a one-to-one peg of its quasi-currency to the dollar in February and later outlawed the use of foreign exchange, says the news agency. Since then, the currency has lost almost 94% of its value against the greenback, adds Bloomberg.