TUNIS (Reuters) – Tunisia’s central bank has kept its key interest rate unchanged at 4.25 percent, an official in the bank said on Tuesday.
The bank last cut its main interest rate in October from 4.75 percent, in a bid to boost economic growth as inflation fell.
(Reporting By Tarek Amara; Editing by Janet Lawrence)
LONDON (Reuters) – Old Mutual said on Tuesday its preferred option after splitting into four would be to have two of the new companies listed on both the London and Johannesburg stock exchanges.
The Anglo-South African company expects to complete its restructuring by the end of 2018.
The changes include carving out its emerging markets operations to create a new South African holding company and a company that would mainly comprise the group’s wealth operations.
Chief Executive Bruce Hemphill said the firm had also received approaches for its businesses from industry and private equity players.
“We are still going through a process,” he told Reuters by phone. “We have settled on a preferred route, (but) that does not preclude the possibility of someone coming along with an offer.”
Old Mutual Wealth was valued by analysts earlier in the year at 3-4 billion pounds ($4.01-$5.35 billion).
Hemphill said despite recent market fluctuations following last week’s referendum vote for Britain to leave the European Union, Britain was still a “sure bet” in the longer term.
He declined to comment on the sale of Old Mutual Wealth’s Italian unit, which has attracted four private equity bidders in its final stages, sources told Reuters last week.
But he said Old Mutual was going through a process of “cleaning up” the Italian wealth business.
The firm said it plans to distribute a “significant proportion” of its stake in Nedbank Group Ltd to the shareholders of the new South African holding company.
The FTSE 100-listed company also said it plans to continue cutting its 65.8 percent stake in U.S. asset management firm OMAM.
Old Mutual said it faces headwinds from weakness in the South African rand and from lower equity markets, but said gross sales in the year had been strong.
Old Mutual shares were up 4.6 percent to 186.3 pence at 0826 GMT in line with a bounce in financial stocks following a severe sell-off this week.
Old Mutual will hold its annual general meeting on Wednesday, along with an extraordinary general meeting where shareholders will vote on Hemphill’s proposed 1,000 percent bonus.
($1 = 0.7483 pounds)
(By Noor Zainab Hussain and Carolyn Cohn. Reporting by Noor Zainab Hussain in Bengaluru; editing by Sunil Nair and Jason Neely)
By Ehab Farouk
CAIRO (Reuters) – Egypt’s central bank said on Monday it could secure some $10 billion from the International Monetary Fund (IMF) by agreeing a structural reform programme but has yet to make any formal request to do so.
Talks over a possible loan half that size have faltered in the past and analysts say an IMF deal might require reforms that the government could find politically difficult to implement in a country where tens of millions live hand to mouth.
The central bank statement came in response to comments by a cabinet minister, who told Reuters on Monday that Egypt had started negotiations with the IMF last week for a $5 billion loan. The minister said the central bank was leading the talks.
“There is a delegation from the IMF that might visit Egypt next month to continue the negotiations,” the minister, who holds an economic portfolio, said by telephone.
The central bank said in a statement that while it had not formally made a request to negotiate a structural reform programme, it was in constant contact with the IMF and could secure $10 billion should it opt to apply.
“The numbers mentioned are incorrect. If there was a need to request a reform programme, Egypt would be capable of obtaining twice the figures mentioned,” the statement said.
The IMF said that its officials “maintain close dialogue with the Egyptian authorities” and that the lender stood ready to help should Egypt make a financing request.
“The size of any financial arrangement would depend on Egypt’s financing needs and on the strength of its economic program,” IMF Mission Chief for Egypt, Chris Jarvis, told Reuters in emailed comments.
Egypt’s economy has been struggling since a mass uprising in 2011 ushered in political instability which drove away tourists and foreign investors, major foreign currency earners. Reserves have halved to about $17.5 billion since then.
The dollar shortage has forced Egypt to introduce capital controls that have hit trade and growth.
The central bank said in its statement Egypt was pushing ahead with its existing reform programme, which includes plans for Value Added Tax (VAT) and subsidy cuts which were put on hold when global oil prices dropped.
A VAT bill is in its final stages but could face resistance in parliament on concerns over inflation that has hit seven-year highs since the currency was devalued by 13 percent in March.
Egypt’s reform programme formed the basis of a $3 billion three-year loan deal with the World Bank that was signed in December. But the cash has yet to be disbursed as the World Bank waits for parliament to ratify economic reforms including VAT.
“Egypt will have to proceed with some painful reforms to guarantee that the loan will work this time,” CI Capital economist, Hany Farahat, said.
“We still haven’t approved the FY16/17 budget, or the VAT. We need another devaluation round for the Egyptian pound … we need the investment environment to be reformed and capital controls to be eased for foreign investors.”
(Additional reporting by Lin Noueihed; Writing by Asma Alsharif and Lin Noueihed; Editing by Louise Ireland)
LAGOS (Reuters) – Nigeria’s central bank asked for bid-offer quotes from currency traders on Monday as it sold dollars on the interbank market to boost liquidity, traders said.
After abandoning the naira’s 16-month old exchange rate peg a week ago, the central bank sold dollars at an auction to clear a backlog of demand and keep markets active.
Currency traders said they had tightened the differential between bids and offers to 0.5 naira from one naira set when the currency was floated last week.
(Reporting by Chijioke Ohuocha; Editing by Catherine Evans)
CAIRO (Reuters) – Egypt’s Beltone Financial has filed a lawsuit against the heads of the Cairo stock exchange and Financial Supervisory Authority over the repeated cancellation of trades on its stock, according to two sources and a court document seen by Reuters.
Shares in asset manager Beltone jumped by more than 550 percent in three months after it was acquired by billionaire businessman Naguib Sawiris’s OTMT in November for 650 million Egyptian pounds ($73 million).
The price spike lifted Beltone’s market value to 4 billion pounds before the stock exchange, at the end of February, began to stop trades in the shares on an almost daily basis. The exchange referred to rules allowing such cancellations in cases where the head of the bourse considered that trades had taken place at unjustified prices.
Beltone’s share price stood at 7.34 pounds on Sunday, compared with 21.97 pounds in mid-April.
“Beltone filed a lawsuit before the Administrative Court against the head of Egypt’s stock exchange, in person, and against the chairman of the financial regulator,” said two sources who are close to the matter.
The lawsuit contests that the head of the stock exchange’s decisions were incorrect and an illegal abuse of authority.
The head of Egypt’s stock exchange, Mohamed Omran, was not immediately available for comment.
Sherif Samy, chairman of the Egyptian Financial Supervisory Authority, said that Beltone had filed a grievance with the regulator earlier this month.
“The decision of the commission did not come in its favour and that is why they are resorting to court, and that is the right of any party,” Samy said.
($1 = 8.8799 Egyptian pounds)
(Reporting by Ehab Farouk; Writing by Asma Alsharif; Editing by David Goodman)
JOHANNESBURG (Reuters) – South Africa’s rand recovered some its losses against the dollar after falling heavily on Friday as Britons voted to quit the European Union, stunning emerging markets currencies.
Stocks also suffered, but gold shares soared in tandem with the metal’s price which surged 8 percent to its highest in more than two years as demand for safe havens assets like bullion and silver rose after the shock vote to leave the EU.
Investors fear Brexit could spark anti-establishment movements in other European countries, some of which have seen decline in traditional political parties.
South African President Jacob Zuma said local banks and financial institutions could withstand the Brexit shock, as they did during the 2008/09 global financial crisis.
Finance Minister Pravin Gordhan said Treasury and the central bank would take measures to deal with any Brexit shocks to Africa’s most industrialised country, which has strong trade ties with the EU.
By 1200 GMT, the rand was 4.52 percent weaker at 15.0510 per dollar after tumbling more than 8 percent in early trade to a three-week trough of 15.6800. The rand closed at 14.4400 in the previous session.
Implied volatility on the rand jumped 16 percent to six-month highs in an already highly traded session.
Capilis Asset Managers head of forex Giacomo Bonavera said the rand decline was over done. “The sellers will come back in and bring the price back down,” he said.
Government bonds also weakened, with the yield on the benchmark instrument due in 2026 adding 25 basis points to 9.13 percent, having jumped as much as 28.5 basis points earlier.
On the bourse, the JSE securities exchange’s Top-40 blue chip index dropped 4 percent to 45,502 points, while the broader All-Share index slumped 3.7 percent to 51,579 points in line with global weakening of equities due to Brexit.
Most shares were in the red with exception of gold miners.
The biggest losers were real estate firms Capital & Counties Properties and Intu Properties, who both have interests in the United Kingdom, and fell 17 percent and 14 percent respectively.
Financial services firm Old Mutual, which has a primary listing in London, and food services firm Bidcorp, which makes nearly half its sales in Britain, fell 7 percent.
Anglogold topped the gainers on the bluechip index, soaring as much as 14.54 percent to 267 rand, while Sibanye Gold, Goldfields and Harmony also shone on the wider index, each rising more than 16 percent.
(Reporting by Mfuneko Toyana; Editing by James Macharia)
LAGOS (Reuters) – Africa’s richest man, Aliko Dangote, plans to launch Nigeria’s first private crude oil refinery by 2019 while almost doubling his cement production on the continent by adding plants in eight countries as he shrugs off a regional economic downturn.
Dangote told Reuters the $12 billion refinery would have a capacity of 650,000 barrels a day, cornering the market in Africa’s most populous country, where fuel shortages are a perennial problem.
Until recently, Nigeria was Africa’s biggest crude oil producer but it imports 80 percent of its fuel because poor maintenance means its four refineries never reach full output. Its current daily consumption is 260,000 barrels, according to the International Energy Agency.
A slump in commodity prices has hammered Nigeria’s economy – along with many others on the continent – and raised the cost of borrowing but Dangote, whose business empire stretches from cement to flour and pasta, is pushing hard into oil and gas.
“It will be ready in the first quarter of 2019,” the billionaire founder of Dangote Cement said of the refinery. “Mechanical completion will be end of 2018 but we will start producing in 2019.”
Dangote said the plant, which will include a $2 billion fertilizer unit, was being funded through “loans, export credit agencies and our own equity”.
Some $3.25 billion had come from local and foreign banks, while the central bank had also chipped in. The IFC, the private sector arm of the World Bank, has lent $150 million.
Dangote also has plans for a gas pipeline through West Africa. Nigeria has the world’s ninth largest proven gas reserves, at 187 trillion cubic feet (tcf), but loses half of it to flaring and re-injection.
Despite the new focus on oil and gas, the business magnate said he planned to build cement plants in Cameroon, Ethiopia, Kenya, Mali, Niger, Nigeria, Senegal and Zambia by 2018. Another plant will open in Congo Republic by September, he added.
A cement plant in Ivory Coast would triple output to 3 million tonnes, up from an initial target of 1 million, he said, while two new plants in Nigeria would add 6 million tonnes annually.
“As at now, what we have in operation is almost about 45 million tonnes, so we have just another 40 million tonnes to go,” he said, affirming an Africa-wide production target of 85 million tonnes a year by 2018.
FX CRISIS
The collapse in oil prices has hit Nigerian companies hard, with many unable to access dollars due to central bank foreign exchange restrictions imposed to prop up the naira.
The worst-affected have gone to the wall or shed large numbers of staff, but a study by Reuters of an 11-week period in March to May showed that Dangote firms managed to secure a healthy share of dollars at the cheap official rate. [nL4N19E3JX]
Dangote said the $161 million bought during that period from the central bank merely reflected the size of his business and did not represent preferential treatment.
“We have been badly affected like any other company,” he said, arguing that operational costs totalled $100 million each month due to recurring expenses such as the purchase of parts for cement production and running a fleet of 9,000 trucks.
“When you are talking about 20 billion dollars worth of projects, what is 161 million? One-hundred-and-sixty-one million dollars is my six weeks’ need,” he said.
Dangote’s sugar refinery in Nigeria had reduced capacity by 15 percent as a result of the dollar crisis. “We ended up owing a lot of dollars,” he said.
This week, the central bank removed the peg that has held the naira at the official rate of 197 for the last 16 months, leading to a 30 percent devaluation as the currency traded freely on the interbank market.
Dangote said the decline had pushed up costs. [nL8N19F31Y]
“This devaluation alone, we have lost over 50 billion naira ($176 million),” he said.
“The gas, which is our main source of power, is priced in dollars. If there is 40 percent devaluation, your price will go up by 40 percent. Every single aspect of the production will go up by that percentage,” he said.
Dangote also said he was eyeing a listing on the London stock exchange “within the next year or two”.
($1 = 284.1500 naira)
(By Alexis Akwagyiram. Editing by Ulf Laessing and Ed Cropley)
HARARE (Reuters) – Drought-hit Zimbabwean will import more than 250,000 tonnes of maize from Mexico to fill the shortfall caused by the severe drought sweeping through the southern Africa, the agriculture minister said on Thursday.
Joseph Made said Zimbabwe would also import the staple crop from neighbours South Africa and Zambia, as well as from the Ukraine but did not give precise figures for these imports.
“We anticipate anyway upwards of 250,000 tonnes will be coming from Mexico. The other maize will obviously be coming from Zambia as well some from South Africa and Ukraine,” Made told reporters.
An El Nino-induced drought has hit southern Africa, slashing the output of the staple maize crop.
Zimbabwe’s government previously said the drought forced it to cut the 2015 growth forecast to 1.5 percent from 3.2 percent, with the 2016 output unlikely to be any better.
The U.N. World Food Programme said earlier in June that output in Zimbabwe would fall below 60 percent of the five-year average of between 700,000 and 1 million tonnes.
(Reporting by MacDonald Dzirutwe; Writing by Mfuneko Toyana; Editing by James Macharia)
JOHANNESBURG (Reuters) – South Africa’s Black Management Forum (BMF) said it was disappointed by the appointment of white South African Rob Shuter as MTN Group’s new CEO and viewed it as a serious blow to giving blacks a larger role in business.
The forum, which lobbies for black rights, criticised the mobile phone operator’s decision saying it was retrogressive to plans for the inclusion of blacks in corporate boardrooms in Africa’s most industrialised country.
Shuter was named on Monday as the replacement for Sifiso Dabengwa, a black executive who resigned last November after Nigeria imposed a fine on MTN for failing to deactivate more than five million unregistered SIM cards.
“There is a general unwillingness for transformation at top management level which has resulted in the decline in the number of black South African CEOs,” BMF President Mncane Mthunzi said in a statement. “These companies are owned by the public and yet they don’t reflect the demographics of our society.”
MTN spokesman Chris Maroleng had no immediate comment but said the company would respond later via an emailed statement.
Founded with the government’s help after the end of apartheid in 1994, MTN has been touted as one of South Africa’s biggest corporate success stories with operations in more than 20 countries in the Middle East and Africa.
Since coming to power at the end of white minority rule, the African National Congress party has pushed for change in the complexion of the civil service, the military and state-owned firms, as well national sports teams and private businesses.
The push has helped many South Africans who were excluded from the mainstream economy under apartheid and created a solid black middle class.
MTN executive Phuthuma Nhleko, also black, was appointed interim executive chairman following Dabengwa’s resignation, with an eye to renegotiating the Nigerian fine which was initially set at $5.2 billion.
In the end, MTN agreed this month to pay a 330 billion naira fine ($1.2 billion) and to list its local business on the Nigerian Stock Exchange. MTN is the largest mobile phone operator in Nigeria with 62 million subscribers and the country accounts for about a third of its revenue.
Nhleko will revert to his role as non-executive chairman when Shuter starts as CEO, which is expected to be by July next year at the latest. Shuter, who has a background in risk management, will be joining MTN from rival mobile operator Vodafone, where he is currently head of Vodafone Europe.
($1 = 283.0000 naira)
(Reporting by Tanisha Heiberg; editing by James Macharia and David Clarke)
JOHANNESBURG (Reuters) – South African power utility Eskom has raised its wage offer to 7 percent from 5.75 in negotiations with workers, the National Union of Mineworkers (NUM) spokesman said on Wednesday.
“NUM is going to seek a mandate from its members about Eskom’s latest offer, then we will respond to the management,” Livhuwani Mammburu said. The offer was still below NUM’s demand of a 15 percent increase for the least-paid workers.
The utility employs over 42,000 people with NUM representing more than 14,000 of workers.
(Reporting by Tanisha Heiberg; Editing by James Macharia)
