South Africa

Naspers spinoff wades into UK food delivery fight

22 Oct 2019

Newly listed Prosus slapped down a 4.9 bln pound order for Just Eat, beating rival Takeaway.com’s all-share bid. Though the UK delivery group rejected the offer, its $120 bln suitor has deep pockets. Rivals like Uber Eats and Deliveroo have a new competitor to worry about.

Corporate South Africa feels expansion’s downside

5 Sep 2019

The nation’s banks, retailers and telcos have spread across the continent. With rioters in Johannesburg now attacking African migrants and their businesses, they’re facing boycotts in Nigeria and Zambia. That’s a problem for the likes of MTN that get lots of revenue from abroad.

Japan is laggard in China-led scramble for Africa

30 Aug 2019

Tokyo wants its companies to pour more money into the continent, partly to counter Beijing’s influence. The U.S. is beefing up overseas finance for similar reasons. But with China’s $43 bln of Africa investments set to overtake America’s, rivals have a lot of ground to make up.

Old Mutual row shows merit of the quiet CEO payoff

31 Jul 2019

The South African insurer’s shares lost 5% after sacked boss Peter Moyo convinced a court he should get his job back, at least temporarily. A public slanging match looks damaging for all concerned. There’s a reason why warring boards and bosses usually settle disputes quietly.

Naspers’ double discount

15 Jul 2019

The South African group is spinning off its stake in China’s Tencent into an Amsterdam-listed subsidiary. Will this narrow the persistent valuation gap between the two?

Naspers hopes two discounts are less than one

15 Jul 2019

The South African group is persistently worth less than its $135 bln stake in Chinese web giant Tencent. Listing assets in Amsterdam might shrink the gap, but the parent will still suffer a markdown. Investors should only click “accept” if the combined shortfall is much smaller.

Africa growth outlook puts democrats on back foot

3 Jul 2019

Ballooning populations mean per capita wealth is falling in key democracies Nigeria and South Africa. That’s a recipe for trouble. Alongside a stronger performance by autocratic Egypt, it also makes worrying reading for those who believe a democratic Africa is a more stable one.

Acacia and Barrick pay price for Newmont escapade

19 Jun 2019

Barrick CEO Mark Bristow won’t sweeten his offer to minority investors of the Tanzanian gold miner. A small raise could defuse the damaging stalemate. But after an expensive and failed tilt at Newmont, Bristow is under pressure to be seen to defend his shareholders’ interests.

South Africa’s central bank debate goes off-piste

5 Jun 2019

A shrinking economy is prodding the ruling ANC to talk of “quantity easing” and changing the respected central bank’s remit. The constitution protects monetary policymakers’ independence and inflation mandate. But the growing confidence of would-be money printers is worrying.

Airtel debt diet prepares it for Africa price war

28 May 2019

The Indian telecom giant is floating 25% of its African arm in London to help cut debt. The continent’s telecom market is growing quickly but competition is fierce. With less debt Airtel will be better positioned to fight back.

Barrick’s lowball Acacia offer is easy to refuse

22 May 2019

The Canadian bullion producer offered to buy out minority shareholders in the Tanzanian miner at an 8% discount. That gives an out from an $180 bln tax dispute with the East African country. It’s a bitter pill, but looming arbitration gives shareholders reason not to swallow it.

Jumia reveals risky allure of big African numbers

13 May 2019

The online retailer’s first-quarter operating losses widened even though revenue doubled. After falling 63% from their post-IPO peak the shares still trade on a similar multiple of future sales as Alibaba. Africa has promise but merits a steeper discount to the Chinese behemoth.

South African election rebuke sets up reform test

10 May 2019

Support for the ruling ANC dropped below 60% for the first time since apartheid. That gives President Cyril Ramaphosa the impetus to reverse the country’s downward slide. Voters and investors will judge him on how he tackles corruption, overmighty unions and shoddy state firms.

South African reforms need gentle voter kicking

7 May 2019

Elections will likely hand the ruling ANC party a majority, albeit a smaller one than in 2014. That might help President Cyril Ramaphosa force his party to clean up its act, and take steps to boost growth. Too bloody a nose, however, and his own position could be under threat.

Naspers relocates its Tencent discount to Europe

25 Mar 2019

The Johannesburg group is shifting internet investments, including a $134 bln stake in the Chinese web giant, to an Amsterdam-listed unit. That might tempt investors wary of South African risks. But it does little to address fears that Naspers will squander its Tencent windfall.

MTN’s Nigerian blessing may yet become a curse

7 Mar 2019

Africa’s biggest phone firm reckons revenues can grow faster than 10 percent annually. If fast-growing Nigeria can deliver, its $12 billion market value will rocket. Based on recent evidence, however, investors are right to curb their enthusiasm.

African retailers get sobering reality check

26 Feb 2019

Shoprite, the continent’s biggest supermarket chain, suffered its first half-year earnings drop in a decade. The big hit was from inflation and devaluation in frontier markets like Angola. Chasing Africa’s billion-plus consumers is one thing; doing so profitably is another.

South African power bailout puts consumers on hook

20 Feb 2019

A $4.9 bln government lifeline is the bare minimum needed to keep indebted utility Eskom afloat. Likely union resistance to mass layoffs means consumers will have to swallow higher electricity costs. President Cyril Ramaphosa can only hope hikes are delayed beyond a May election.

African miners get mix of red carpet and red card

8 Feb 2019

The continent can’t work out whether to shake hands with the sector, or shake its fist. Warm welcomes from Ghana, South Africa and Ethiopia contrast with the aggressive resource nationalism of Tanzania. A nasty slowdown there would bolster the open-door approach.

MTN’s Nigeria fix promises longer-term headaches

2 Jan 2019

The African phone giant has paid $53 mln to settle an $8 bln dispute with Abuja. That looks like a cheap way of maintaining good relations in its most important market. But the speed of the resolution, and modest size of the penalty may encourage further interference.