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South Africa’s Truworths posts 12% rise in FY profit

Comments (0) Africa, Business, Latest Updates from Reuters

(Reuters) – South African clothing retailer Truworths International reported a 12 percent increase in full-year profit on Thursday, boosted by cash sales at its British unit Office Holdings, but falling short of estimates.

* Group retail sales for the 52-week period ended 26 June2016 increased by 46.1 percent to 17.0 billion rand ($1 billion)versus comparable period. * Headline and fully diluted headline earnings per share for52 weeks ended June 26 up 12 percent to 667 cents, but short of702 cents estimate by Thomson Reuters Smart Estimates. * Shares in Truworths down 6.7 percent at 85.34 rand by 1450GMT. * Cash sales outpaced sales on in-store credit as Britishfootwear chain Office sells only in cash and new rules in SouthAfrica hamper credit extension. * “Credit retail sales were significantly impacted by theintroduction of new affordability assessment regulations inSeptember 2015, which management estimates resulted in a loss ofbetween 200 million rand to 250 million rand in sales,” thecompany said. * Annual dividend per share up 12 percent. * “We expect the South African trading environment to remainchallenging during the 2017 financial period, with slow economicgrowth and rising inflation putting pressure on consumers,” thecompany said. * The trading environment in United Kingdom is also facedwith uncertainty after decision to withdraw from European Union,but is likely to be less uncertain as more clarity regardingBrexit emerges, the company said.

 

($1 = 13.3300 rand)

 

(Reporting by TJ Strydom; Editing by James Macharia)

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Ghana says on track to halve budget deficit after IMF deal

Comments (0) Africa, Latest Updates from Reuters, Politics

ACCRA (Reuters) – Ghana is on target to halve its fiscal deficit this year after its $918-million aid deal with the International Monetary Fund, Finance Minister Seth Terkper said on Wednesday.

His comments appeared designed to allay uncertainty over the deal that emerged this month when parliament rejected a key component that was designed to promote fiscal discipline. The following day the government suspended a planned Eurobond issue.

The government issued a bill to eliminate central bank financing of the budget deficit in line with the requirements of the deal but on Aug. 2 parliament passed the bill with an amendment allowing financing of up to 5 percent.

Ghana’s public debt eased to 63 percent of GDP in May from 72 percent at the end of 2015, while consumer inflation dropped to 16.7 percent in July from 19 percent in January, Terkper said, citing the impact of the deal that began in April 2015.

The central bank expects inflation to slow to 8 percent, plus or minus two, by September 2017.

“We are set to halve the deficit from 12 percent in 2012, and we have also started stemming the rate of growth of the public debt,” he told a meeting of private businesses in Accra.

Ghana, which exports cocoa, gold and oil, signed the assistance programme to bring down inflation and the budget deficit and stabilize the currency.

Terkper said the debt stock could rise marginally to 65-66 percent of GDP on planned disbursements towards the end of the year but will remain below 70 percent.

Ghana pulled out of a planned five-year $500 million amortising Eurobond this month because investors demanded a yield higher than the single digits the government had expected.

Terkper led the government finance team on the deal and said his team only suspended pricing of bids.

“We did not call off the 2016 bond …. What we did was to suspend pricing …. We must sometimes hold our nerves when we’re in the capital market to look for the right window before we strike in order to get the best results,” he said.

Ghana will on Thursday begin pumping oil from a second offshore oil field, Tweneboa-Enyenra-Ntomme or TEN, in addition to its flagship Jubilee production which began in late 2010.

 

(By Kwasi Kpodo. Editing by Matthew Mpoke Bigg)

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Three-week South African fuel strike ends as union signs new pay offer

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CAPE TOWN (Reuters) – South Africa’s petroleum industry and striking workers agreed to a new two-year wage deal on Wednesday, ending a three-week strike that caused limited supply disruptions, an official representing employers said.

Around 15,000 striking workers affiliated to Chemical, Energy, Paper, Printing, Wood and Allied Workers union (CEPPWAWU) agreed a 7 percent wage increase this year and an April CPI plus 1.5 percent hike in the second year, said Zimisele Majamane, the deputy chairman of the National Petroleum Employer’s Association.

 

(Reporting by Wendell Roelf; Editing by James Macharia)

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Egypt’s telecom regulator approves revised terms for 4G licences

Comments (0) Business, Latest Updates from Reuters, Middle East

CAIRO (Reuters) – Egypt’s telecoms regulator has approved revised terms for 4G mobile broadband network licences, and said it will send them out to operators on Sunday.

The government offered four 4G telecom licences in June, to Telecom Egypt and to the country’s three mobile services providers – Orange Egypt, Vodafone Egypt and Etisalat – but only Telecom Egypt accepted the terms. The regulator, keen to prioritise existing carriers, decided to revise them.

A senior official at the Telecommunications Ministry told Reuters on Wednesday that the revised terms include additional frequencies but there is no change in the pricing or the condition that 50 percent of the payment for the licences must be made in U.S. dollars.

“The telecom regulator approved the final terms of the 4G licences yesterday,” the official said, adding that companies would have until midday on Sept. 22 to accept them.

The National Telecom Regulatory Authority later issued a statement confirming it approved the final terms and that the companies had until Sept. 22 to accept.

The government, which is grappling with a shortage of hard currency as economic and political turmoil in Egypt in the past few years has deterred foreign investment, has said it hopes to raise 22.3 billion Egyptian pounds ($2.5 bln) in total in licence fees.

 

(Reporting by Ehab Farouk; Writing by Ola Noureldin; Editing by Greg Mahlich and Susan Fenton)

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South African court sets aside Eskom’s electricity tariff hikes

Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – A South African court on Tuesday struck down some of the tariff increases granted to Eskom this year, saying the power utility had not followed the correct procedure when applying for a special claw-back, local media reported.

National energy regulator (Nersa) in March allowed Eskom a total tariff hike of 9.4 percent, of which part was an interim increase for running expensive diesel generators to keep the lights on in Africa’s most industrialised economy.

A court in Johannesburg on Tuesday granted the application by business organisations to set the regulator’s decision aside.

Had the interim increase not been granted, the tariffs would have risen by 3.5 percent from April 1, Moneyweb reported.

Eskom would not comment on the court’s decision directly, saying in a statement it would await a decision by the regulator.

 

(Reporting by TJ Strydom)

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Kenya’s finance minister opposes capping of banks’ lending rates

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NAIROBI (Reuters) – Kenya’s Treasury opposes a move by parliament to cap commercial lending rates because other measures being put in place will help bring down borrowing costs over time, the finance minister said on Tuesday.

Parliament passed changes to the banking law two weeks ago to cap commercial interest rates at 400 basis points above the central bank’s policy rate, now 10.5 percent. The changes are awaiting presidential approval.

Henry Rotich, the finance minister, told Reuters his ministry preferred to improve the transmission of monetary policy signals to commercial rates and the creation of a central registry for collateral to cut rates, rather than capping them.

“Our approach in this issue is to deal with the root cause of why interest rates are where they are in Kenya,” he said.

The average lending rate was 18.2 percent last month, compared with 15.8 percent in July last year, the central bank said. The central bank cut its policy rate to 10.5 percent in May, having left it at 11.5 percent since July 2015.

Rotich said they were working to improve the Kenya Banks Reference Rate (KBRR) to ensure banks were pricing loans correctly.

Introduced by the government in 2014 to help rein in high costs of loans by offering a benchmark for banks to price their loans, the KBRR has been criticised widely for failing to help bring down interest rates.

“There is more room for refining the KBRR and banks are working on ensuring that the margins reflect the best pricing of loans,” the minister said without offering details.

He said a law to establish a central registry of collateral would be taken to parliament soon, enabling borrowers to transfer their loans between different banks easily and cutting costs of securing collateral once it is passed.

“We think these measures are going to help to bring down rates over a period of time,” Rotich said.

Kenyan banks have reported rising profits in the last decade, attracting foreign investors. Rotich said the growth of the sector had helped to boost the share of the population with access to formal financial services to 70 percent.

“We don’t want to rock that boat … Anything that reverses that would not be a good way to go,” he said.

The central bank also opposes capping interest rates saying it could restrict lending. It however wants banks to lower their rates.

Rotich said the government’s budget deficit for the fiscal year starting last month would be lower than the 9.3 percent approved by parliament, adding they would also raise money in capital markets abroad to avoid putting pressure on local rates by borrowing too much in the domestic market.

“Our strategy is to diversify our sources of funding so that we don’t borrow heavily domestically,” the minister said.

(By Duncan Miriri, Editing by Richard Balmforth)

 

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Congo copper output falls 14% in H1 on lower prices

Comments (0) Africa, Business, Latest Updates from Reuters

KINSHASA (Reuters) – Copper output in Democratic Republic of Congo, Africa’s top producer, fell 14 percent in the first half of 2016 to 466,250 tonnes as a global price slump led some mines to suspend production, the central bank said on Tuesday.

The decline is hammering the economy of the country, which derives about 95 percent of its export earnings from extractive industries.

In June, the government slashed its budget by 22 percent in response to low commodity revenues.

Congo, among the world’s top copper producers, produced 990,000 tonnes of the metal in 2015, down from 1.03 million tonnes the year before.

In a weekly report, the central bank also said production of cobalt, the metal used in lithium-ion batteries and of which Congo is the world’s leading producer, slid by 13 percent to 35,267 tonnes over the same period.

Benchmark copper on the London Metal Exchange lost 25 percent of its value in 2015 and has recovered only slightly this year, while cobalt prices are also down about 14 percent from this time last year.

Glencore’s Katanga unit, one of the country’s largest copper and cobalt producers, announced an 18-month suspension of operations last September and thousands of jobs have been lost in the sector since then as companies cut costs.

 

(Reporting by Aaron Ross; editing by Matthew Mpoke Bigg and Jason Neely)

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Old Mutual to invest in Nigerian real estate, agriculture

Comments (0) Africa, Business, Latest Updates from Reuters

ABUJA (Reuters) – Anglo-South African financial services firm Old Mutual and Nigeria’s sovereign wealth fund on Friday signed agreements to set up two funds to invest in real estate and agriculture in Africa’s most populous nation.

Old Mutual and Nigeria Sovereign Investment Authority (NSIA) said they would jointly raise a $500 million fund to invest in real estate and another $200 million to spend on agriculture projects in Nigeria.

The West African nation is in the middle of its worst crisis in decades as a slump in oil revenues hammers public finances and the naira. Gross domestic product shrank in the first quarter and the central bank governor has said a recession is likely.

Chief executive of NSIA, Uche Orji, said both parties will each commit $100 million as initial commitment for the real estate fund and $50 million for the agriculture fund.

“We are looking at office towers, commercial real estate,” Orji said. “We are investing equity in agriculture. We are looking at farming with emphasis on export.”

Poor infrastructure and access to capital is a major bottleneck to growth in Nigeria, which has made diversifying its revenue base and reducing a huge import bill its top priority.

“The most important thing is infrastructure. The problem is that its cheaper to move goods from China to Lagos, than move it from Kano to Lagos and that’s because we don’t have the infrastructure,” Finance Minister Kemi Adeosun said.

Nigeria established the Sovereign Investment Authority (SIA) in 2011 with $1 billion of seed capital in an effort to manage oil export revenues.

The new funds, which will stay invested for up to 12-years, will target returns of around 20 percent, Hywel George, chief investment officer at Old Mutual said.

A successful real estate investment in Nigeria can earn an returns as high as 30-35 percent, while rental income yields in cities such as Lagos and Abuja can easily reach 10 percent, developers and estate agents say.

However, navigating through opaque land laws, corruption, a lack of development expertise and financing, a dearth of mortgages and high building costs will take courage and influential local partners.

 

(By Chijioke Ohuocha. Editing by Ulf Laessing and William Hardy)

 

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S.Africa’s power utility Eskom says signs wage deal with unions

Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s state-owned power utility Eskom said on Friday it had signed a wage deal with unions after lengthy overnight talks, and urged unionised staff who have been on strike since Monday to resume work.

Eskom said in a statement it had signed a two-year wage deal with the National Union of Mineworkers (NUM) and Solidarity union, granting the lowest paid workers increases of 10 percent and other employees 8.5 percent.

Eskom was previously offering pay increases of 7 to 9 percent while the NUM, whose members were on strike, had on Tuesday lowered its wage demand to between 8.5 to 10 percent from 12 to 13 percent.

The utility also said the NUM was in the process of getting all its members to return to work and end the strike.

Officials at the NUM could not confirm that they would call off the strike, but said they would first present the new wage offer by Eskom to members, who make up about a third of the workforce at the utility.

The Solidarity union, whose members were not on strike, said its members had accepted Eskom’s latest offer.

The metalworkers union NUMSA, whose members had also not joined the strike, had yet to sign the deal, but accepted the offer in principle, Eskom spokesman Khulu Phasiwe said.

“NUM is currently in the process of telling its members to come back to work. We are expecting everything to be back to normal by Monday,” Phasiwe said.

The company, the sole power provider in Africa’s most industrialised country, has said that the strike had so far not affected electricity supplies.

The NUM said its members would have to give a green light to the latest pay offer by Eskom.

“There is a revised offer that is tabled by Eskom in the early hours of this morning, around 3 am. We can’t reveal it because we need to take it back to our members,” said NUM’s spokesman Livhuwani Mammburu.

The dispute is the latest problem to beset Eskom, which has struggled to meet power demand in South Africa due to its aging power plants and grid. However, it has managed a year without rolling blackouts that have hurt the economy in the past.

(Reporting by Tanisha Heiberg and TJ Strydom; Editing by James Macharia)

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Strikes unlikely to curb Kenya tea output

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NAIROBI (Reuters) – Several weeks of strikes by tea pickers in Kenya’s biggest estates in June and July are unlikely to disrupt production enough to warrant a change to the forecast for the year, the agriculture industry regulator said on Thursday.

Tea pickers were awarded a 30 percent pay increase by a court in June but went on strike when tea estate owners refused to pay, saying it would drive up costs and deter investment.

Tens of thousands of pickers in the major growing regions of Nandi and Kericho went on strike in protest. Pickers have since returned to work after the Labour Ministry brokered a deal allowing the award to be implemented in two phases.

The East African nation, the world’s No. 1 exporter of black tea, expects output to jump to as much as 450 million kg this year, thanks to good rainfall, from 399 million in 2015. Tea is one of Kenya’s top foreign-exchange earners.

“There is no change to the output forecast,” Alfred Busolo, acting director-general of the Agricultural, Fisheries and Food Authority told Reuters, adding that the impact of the stoppages was “minimal”.

The government is working to remove numerous levies and taxes on the tea industry to make its exports more competitive.

The labour stoppages had mainly affected big tea estates in the Rift Valley region, which account for 40 percent of production. The rest comes from small-scale farms.

 

 

(Reporting by Duncan Miriri; Editing by Edmund Blair and Dale Hudson)

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