South Africa

South Africa is litmus test for climate solidarity

15 Sep 2021

Despite its relatively small size, the Rainbow Nation’s economy is a big CO2 emitter. Yet Pretoria can ill afford a switch from coal due to soaring public debt. A $10 bln aid plan could be the answer, if lenders can close their eyes to the financial and political risks.

Prosus pushes hard on Indian fintech door

31 Aug 2021

The tech investor is paying $4.7 bln for payment processor BillDesk. That transforms its PayU operation and provides a profitable base to extend credit. The multiple of 19 times revenue is punchy, but a fraction of Paytm. And it’s a strong foothold in a big emerging market.

South Africa has no money to throw at its problems

15 Jul 2021

The Rainbow Nation is suffering its worst civil unrest since the end of apartheid in 1994. The ruling ANC’s usual response to cracks in the social fabric is to fill them with new subsidies. With debt at 80% of GDP and rising fast, that has a limited shelf-life.

South Africa’s arm of the law gets slightly longer

29 Jun 2021

Jailing ex-President Jacob Zuma for contempt of court is far from a conviction. Still, it’s another sign of the country’s institutions losing patience with graft and waste. With his predecessor neutralised, Cyril Ramaphosa can speed up reforms, including at power giant Eskom.

Anglo spinoff points to darker future for coal

7 Jun 2021

The mining giant’s thermal coal unit, Thungela, was valued at just $250 mln on its market debut. That’s a third of the EBITDA its South African mines may earn this year. It’s a stark reminder of the black stuff’s rapidly declining worth, and of public investors’ aversion to it.

The Exchange: South Africa’s prospects

25 May 2021

Johannesburg Stock Exchange CEO Leila Fourie tells Swaha Pattanaik how South Africa’s economy has coped with Covid-19. In an interview recorded for the International Economic Forum of the Americas, she also flags sectors that will rebound fastest and discusses ESG investing.

Poundland’s knock-down IPO is reassuringly cheap

13 May 2021

Pepco, owner of the chain that flogs cheap toiletries, is listing with a 4.8 bln euro price tag. Links to scandal-hit Steinhoff and weak sales growth justify a cut-price valuation of below 10 times this year’s EBITDA. If it can grab more market share, the discount won’t last.

Naspers goes all-in to crush South Africa discount

12 May 2021

The $100 bln internet group will swap shares with Dutch offshoot Prosus, removing some pressure on its stock. The resulting cross-shareholding is as far as CEO Bob van Dijk can go. Shrinking Prosus’ persistent shortfall to its $212 bln stake in China’s Tencent is a harder task.

Africa’s digital payments race becomes a scramble

5 May 2021

The pandemic has brought the region’s mobile-based money networks and their 159 mln users to a crossroads. Airtel and MTN may spin off their payment arms. Banks and card giants like Mastercard are joining in. The victors will hold sway over an increasingly cashless continent.

Anglo American tests shareholders’ ESG bona fides

8 Apr 2021

The miner is giving investors one share in its spun-off thermal coal unit for every 10 already held. The commodity’s kryptonite status means many European institutions will want to get rid of them for the same reason as Anglo. But rising coal prices may turn some heads.

Naspers remains strapped to Tencent roller coaster

8 Apr 2021

Selling a $14.6 bln stake in the Chinese internet giant restocks the South African group’s war chest. But its residual $220 bln shareholding towers over other investments. The best hope for investors is that Naspers finds a way to shrink its weighting on the Johannesburg bourse.

Viewsroom: Turkish trouble and emerging markets

25 Mar 2021

President Tayyip Erdogan’s abrupt firing of a third central bank governor forced investors to contemplate whether this might precipitate a run on financial assets in other developing markets, including South Africa. Breakingviews columnists discuss the implications.

South Africa offers Erdogan an inflation lesson

23 Mar 2021

A steep plunge in the lira, of the sort seen this week after Turkey’s president fired his central bank boss, usually drags down the rand. Not this time. The South African currency’s resilience shows the value of a credible and independent central bank left free to control prices.

Naspers can tackle one-third of Tencent problem

19 Mar 2021

Despite listing a Dutch subsidiary in 2019, the South African company still trades at a big discount to its $239 bln stake in the Chinese internet giant. Its inability and unwillingness to sell are enduring factors. An outsize weight on the Johannesburg bourse is easier to fix.

South Africa enters greener bond-market crosshairs

11 Mar 2021

With 90% of its power coming from coal, the Rainbow Nation is one of the worst CO2 emitters. Mining’s political heft also means foot-dragging on climate policy. With big external funding needs, the kick from bond investors when they flick the green switch will hurt hardest.

Anglo takes quick, dirty route to greener pastures

8 Feb 2021

The miner may dump its African coal unit, worth maybe $1 bln. A spinoff could add six times that sum to the $45 bln group’s value by luring eco-conscious investors. Yet it doesn’t cut global emissions, and Anglo American’s iron ore assets may soon feel the environmental heat.

Africa’s debt chickens return to restive roost

31 Dec 2020

Even before Covid-19, the continent faced a reckoning. Low commodity prices remove a major growth pillar, while mounting leverage rules out more foreign borrowing. With budgets and citizens under pressure from Angola to Zimbabwe, Africa Rising looks more like Africa Uprising.

Naspers finds one bargain internet stock: its own

30 Oct 2020

The $82 bln South African group and its Amsterdam-listed offshoot have lagged behind a surge in big technology stocks this year. A $5 bln buyback highlights the discount to its stake in China’s Tencent and shows it won’t chase overpriced deals. Other investors should take notice.

Ethiopian swoop would seal South Africa’s descent

4 Sep 2020

Pretoria’s bankrupt state airline may secure a parachute from Addis Ababa, a stunning reversal of fortunes from the 1990s. After apartheid, South African firms blazed trails across the continent. With corruption and dogma hobbling their home base, the tables are turning.

Sampo takes pricey UK joyride with Hastings deal

5 Aug 2020

The Finnish group has made a $2.2 billion offer for the London-listed motor insurer. A 42% premium looks chunky given few cost savings on offer. CEO Torbjorn Magnusson needs to boost revenue in the cut-throat British market and swerve a likely increase in claims to avoid a crash.