JOHANNESBURG (Reuters) – South Africa’s new vehicle sales fell by 14 percent year-on-year to 47,631 units in March, data from the trade and industry department showed on Friday.
Exports slipped 18.5 percent to 27,714 units compared with the same month last year, the department said.
(Reporting by Mfuneko Toyana; Editing by Tiisetso Motsoeneng)
JOHANNESBURG (Reuters) – South Africa has issued its first stock exchange operating licence in more than 100 years, paving the way for a local company to compete with the Johannesburg Stock Exchange (JSE).
ZAR X Stock Exchange said on Wednesday it would start operating in September after securing approval from the Financial Service Board (FSB).
The bourse will be the second exchange after the more than a century old JSE, Africa’s biggest and most liquid stock market.
ZAR X plans to facilitate listings of restricted share schemes, currently trading over-the-counter (OTC), which the FSB ruled were in contravention of capital markets regulations.
(Reporting by Nqobile Dludla; Editing David Evans)
JOHANNESBURG (Reuters) – The boss of South African utility Eskom has ruled out for now issuing bonds to help fund $21 billion of new power plants, saying on Tuesday the credit market was not favourable.
The state-owned company, which provides virtually all of South Africa’s electricity, is building three new power plants to help shore up power reserves, and expects to add 5,620 megawatts (MW) to the network by 2018.
“We will only issue a bond based on market conditions. At the moment they don’t seem very favourable,” chief executive Brian Molefe told Reuters on the sidelines of a company function.
Molefe, drafted in last April from state rail and freight firm Transnet to stabilise the power producer and help it keep the lights on, said Eskom was instead in talks with banks about multi-lateral loans.
“We have the option of going to banks and DFIs (development finance institutions) for multi-lateral loans, which is what we are negotiating now,” he said.
But Molefe said the Eskom, whose Ba1 credit rating is under review by Moody’s for potential downgrade, was not under any liquidity pressure because it had raised enough money to cover its capital needs for both the 2016 and 2017 fiscal years.
Eskom faced a crippling cash crunch last year that forced the government to inject nearly 80 billion rand in equity. The utility also had to impose almost daily rolling power cuts that hurt economic growth to prevent the grid from collapsing.
Eskom has said it does not expect power cuts this year.
($1 = 15.4771 rand)
(Reporting by Tiisetso Motsoeneng; Editing by Mark Potter)
JOHANNESBURG (Reuters) – South African assets ended a shortened trading week on the backfoot on Thursday, with expectations of higher U.S. interest rates hurting the rand and investors taking no chances before the four-day Easter weekend.
In equities, shares in mobile networks operator MTN blazed the downhill trail, sliding over 10 percent as they traded ex-dividend and on the emergence of new complications in its efforts to cut the size of a hefty fine it faces in Nigeria.
Nigeria’s parliament has launched a probe into whether the telecoms regulator can reduce a fine slapped on MTN for missing a deadline to disconnect unregistered SIM card users, a lawmaker said on Thursday.
The move might complicate efforts by Africa’s biggest cell phone operator to reduce the fine, which had originally amounted to $5.2 billion and was cut by Nigeria’s telecoms regulator to $3.9 billion in December.
Overall, investor appetite for South African assets was dimmed by the prospect of getting caught out ahead of a four-day holiday weekend.
“People don’t want to go into the long weekend holding the rand. There is risk aversion all round but South Africa, including equities, has been hit quite badly,” said Bart Stemmet, an analyst at NKC African Economics.
The benchmark Top-40 index slipped 0.57 percent to 46,349.01 while the wider All-share index declined 0.47 percent to 52,323.78. It was the third straight session that South African stocks ended in the red.
Trade volumes were thinner than usual with around 211 million shares changing hands.
At 1520 GMT, the rand traded at 15.5650 per dollar dollar, 1.33 percent weaker from Wednesday’s New York close of 15.3600. Government bonds were mixed, with the yield for the benchmark instrument due in 2026 flat at 9.37 percent.
(Reporting by Ed Stoddard and Olivia Kumwenda-Mtambo; Editing by Tom Heneghan)
JOHANNESBURG (Reuters) – South Africa’s Competition Tribunal said on Tuesday it was weighing its approval of Sibanye Gold’s plan to acquire platinum mines over concerns that 510 jobs could be lost if the deals proceed.
Sibanye last year said it would buy Anglo American Platinum’s labour-intensive and costly Rustenburg mines and Aquarius Platinum.
Both transactions were approved by the Competition Commission, which investigates deals for any anti-trust issues, on condition that no jobs would be lost and the firms would keep the black empowerment policy to protect small businesses.
The government has set empowerment goals to redress the absence of South Africans excluded from the mining industry under apartheid in a policy meant to spread economic wealth to the black majority.
Sibanye has sought to have these conditions amended to allow for layoffs, the Competition Tribunal, which makes a final ruling on proposed mergers or acquisitions, said in a statement.
Sibanye argued in favour of layoffs at a hearing held by the Tribunal on Monday that was attended by unions, reports said.
Sibanye’s CEO Neal Froneman was quoted by Business Day newspaper as saying the deal might not proceed without retrenchments.
Froneman was not available to comment when Reuters tried to reach him.
The Tribunal is expected to make a final decision soon.
About 250 job would be lost through the merger with a further 260 jobs expected to be cut should Sibanye combine all its mining operations and head offices with the target companies, causing an overlap of important positions.
Competition Tribunal spokeswoman Chantelle Benjamin said labour unions and the Competition Commission lobbied for jobs to be cut only after three years while Sibanye proposed two years. She said most of the jobs lost would be at the head offices and senior management.
(Reporting by Zandi Shabalala; Editing by James Macharia)
JOHANNESBURG (Reuters) – South Africa and Saudi Arabian ACWA Power launched a $328 million solar power plant in the Northern Cape province on Monday, as Africa’s most industrialised country rushes to expand its power supply and cut its coal reliance.
The Bokpoort Concentrated Solar Power (CSP) Project, developed by a consortium led by ACWA Power, is set to provide 1,300 megawatts per hour, powering more than 200,000 homes, a statement from media firm OLB said.
Construction of the plant began in 2013, following a successful bid by ACWA Power, as part of South Africa’s plan to expand the use of renewable energy.
“It is aimed at providing energy security and diversified energy. It instils confidence that major green projects are going to be built in South Africa,” said the Department of Trade and Industry’s (DTI) deputy director general Yunus Hoosen.
Chronic energy shortages are pushing the government to seek alternative sources of electricity from state-owned power utility Eskom’s coal-powered stations that take much longer to build.
Eskom, which provides virtually all of South Africa’s power, is facing a funding crunch as it races to bring new power plants online.
With year-round sunshine and thousands of miles of windswept coast in South Africa, investors are warming to the renewable energy potential, with 66 projects completed or underway since the government launched a first bid round four years ago. [L5N0W61SY]
Bokpoort CSP plant is the first in a series of investments that ACWA Power is making in the power sector in South Africa, said the DTI.
The company expects to commence construction on the 100 MW Redstone concentrated solar power project, also in Northern Cape, later this year and is awaiting the outcome of tender submissions for a 300 MW coal-fired plant in Mpumalanga province in eastern South Africa.
(Reporting by Nqobile Dludla; Editing by James Macharia and Alexander Smith)
ABUJA (Reuters) – South African telecoms firm MTN Group has offered $1.5 billion to settle a much larger fine from Nigerian regulators for missing a deadline to disconnect unregistered SIM card users, a document seen by Reuters shows.
Africa’s biggest mobile phone group has been in talks with Nigerian authorities to have the $3.9 billion penalty reduced and last month made a “good faith” payment of $250 million towards a settlement.
In a letter to the Nigerian government from MTN’s lawyer, former U.S. Attorney General Eric Holder, the company proposed a 300 billion naira ($1.5 billion) settlement to be paid through a combination of government bond purchases, cash instalments and network access to the Nigerian government.
Holder said in the letter, dated Feb. 24, the offer “ultimately is in the best interest of the FGN (Federal Government of Nigeria) and MTN Nigeria.”
Johannesburg-based MTN said on Friday talks with the Nigerian government were ongoing.
“MTN has previously advised shareholders not to make decisions based on press reports and MTN again urges its shareholders to refrain from doing so,” it said.
Nigeria’s telecoms ministry had no immediate comment.
In its annual results last week, MTN said it had put aside $600 million to cover a deal over the fine, which was originally set at $5.2 billion on the basis of charging $1,000 for every unregistered SIM card.
Nigeria imposed a deadline on mobile operators to cut off unregistered SIM cards, which MTN missed, amid fears the lines were being used by criminal gangs, including militant Islamist group Boko Haram.
The fine, equating to more than twice MTN’s annual average capital expenditure over the past five years, came months after Muhammadu Buhari was swept to power after an election campaign which pledged tougher regulation and a fight against corruption.
Shares in MTN, which makes about 37 percent of its sales in Nigeria, were little changed at 147.53 rand at 0839 GMT, after rising more than 2 percent shortly after the market opened.
($1 = 199.0000 naira)
(By Camillus Eboh. Additional reporting by Zandi Shabalala in Johannesburg; Writing by Tiisetso Motsoeneng; Editing by Mark Potter)
LONDON (Reuters) – Anglo-South African financial services group Old Mutual Plc said on Friday it would split up into its four main businesses, strengthening expectations of the sale or listing of its UK asset management arm.
The break-up of the company, which is listed in London and Johannesburg and has insurance, asset management and banking operations, follows a strategic review announced in November, when former Standard Bank executive Bruce Hemphill took over as chief executive.
Changes to the regulatory environment in Europe and South Africa have made the company, which started out in 1845 as a life insurance firm in Cape Town, more complex to run, it said in a statement.
“It’s a costly structure with insufficient synergies to justify those costs,” Hemphill said.
Old Mutual’s solvency capital ratio under new European rules was 135 percent, lower than many of the other major insurers that have reported earnings so far this year.
The group said it had not yet decided how it would go about spinning off the units but that it expected the separation to be largely completed by the end of 2018.
The company’s four units are Old Mutual Emerging Markets, Old Mutual Wealth, Nedbank Group and OM Asset Management.
It said it planned to cut its majority stake in Nedbank to a minority one.
Old Mutual’s shares have risen since Sky News reported the break-up plans last weekend, and said private equity firms had tabled a multi-billion pound cash bid for Old Mutual Wealth.
Analysts said the unit would be worth 3-4 billion pounds.
The group said its pretax adjusted operating profit for 2015 rose 4 percent in reported currency terms to 1.7 billion pounds ($2.4 billion).
($1 = 0.7004 pounds)
(By Carolyn Cohn and Noor Zainab Hussain. Additional reporting by Soumithri Mamidipudi in Bengaluru; Editing by Rachel Armstrong and Mark Potter)
JOHANNESBURG (Reuters) – Ratings firm Moody’s will visit South Africa next week to decide whether to downgrade the credit status of Africa’s most industrialised economy to just one notch above sub-investment grade, the Treasury said on Wednesday.
South Africa’s Finance Minister Pravin Gordhan told local station Radio 702 that Moody’s informed him of their decision during his stop in London on an overseas roadshow to meet with investors and convince them the economy could be turned around.
“They will be in South Africa and meet with various stakeholders and get relevant information that will influence them either not to downgrade us or not to downgrade us,” Gordhan said.
The Treasury said in a statement that the “review visit will primarily serve to either affirm the current ratings or downgrade them.”
Gordhan is battling to boost South Africa’s growth and to persuade ratings agencies not to cut the country’s credit rating to junk following his appointment last December.
Late on Tuesday, Moody’s said it was placing South Africa’s Baa2 ratings on review for downgrade, citing the economy’s weak growth prospects and worsening fiscal position. [nFWN16G023]
“The review will allow Moody’s to assess to what extent government policy can stabilize the economy and restore fiscal strength,” the agency said in a statement.
Moody’s put South Africa’s Baa2 credit rating on a negative outlook in December, and is the only agency that does not have South Africa a step away from junk status.
(Reporting by Mfuneko Toyana; Editing by James Macharia)
PRETORIA (Reuters) – South Africa’s current account deficit widened to 5.1 percent of gross domestic product in the fourth quarter of 2015 from a revised shortfall of 4.3 percent in the third quarter, the central bank said on Tuesday.
Economists surveyed by Reuters had expected a 4.35 percent gap for the fourth quarter.
Year-on-year, the current account deficit shrunk to 4.4 percent of gross domestic product compared to a 5.4 percent deficit in 2014.
Exports slumped while imports rose during the quarter, leading to a sharp increase in the trade balance deficit to 57 billion rand ($4 billion) compared with a revised 22 billion rand gap in the third quarter, the reserve bank said in its quarterly bulletin.
“The bank has officially identified November 2013 as the upper turning point in the business cycle, implying that the South African economy is now officially in a downward phase,” the central bank noted.
($1 = 15.3384 rand)
(Reporting by Mfuneko Toyana; Editing by James Macharia)
