South Africa

Naspers takes first step to shrinking Tencent gap

18 Sep 2018

The South African group is valued at a hefty discount to its $120 bln stake in the Chinese internet giant. Floating its African TV unit should therefore provide some relief to frustrated investors. To unlock more value, though, Naspers may need to shed its remaining operations.

Investec fund float could attract predators

14 Sep 2018

The Anglo-South African financial group is listing its asset management arm in London. Decent growth and increased focus should support a healthy valuation. With assets of 109 billion pounds, it may also make a choice morsel for a bigger rival.

South Africa slump comes at worst possible time

4 Sep 2018

The first recession in nearly a decade is a blow for President Cyril Ramaphosa. Barring a sharp recovery, it will be harder to control debt and push through reform. Jittery emerging market investors and an election in eight months put his credibility as economic saviour at risk.

China and Africa struggle to kick debt habit

3 Sep 2018

President Xi Jinping pledged another $60 bln to the continent while warning against the kind of binges that have led countries to default. Yet Africa shows no sign of restraint, and China’s lending remains opaque. Accusations of debt-trap diplomacy are likely to linger.

UK-Africa trade is tiny plaster for Brexit wounds

28 Aug 2018

Prime Minister Theresa May hopes deeper ties with the continent will help cushion the blow of leaving the EU. But UK trade with sub-Saharan Africa is less than 3 pct of what it exchanges with Europe. With Nigeria and South Africa in the doldrums, prospects for growth look slim.

South Africa has thin defense against Trump thump

24 Aug 2018

The U.S. president’s complaint about the killing of white farmers didn’t much rattle markets, but South Africa’s trade-dependent economy can’t afford a fight with the White House. The only comfort: leader Cyril Ramaphosa is more business-friendly than his ousted predecessor.

Steinhoff swaps sovereignty for a lifeline

19 Jul 2018

A debt deal with creditors means the scandal-hit retailer is close to removing the imminent threat of default. Lenders have to wait three years to get paid. But on paper they get a higher payout, a say on asset sales and returns that might otherwise go to shareholders.

U.S. salvo at Glencore has unintended consequences

12 Jul 2018

A request for details on anti-corruption practices wiped more than $6 bln off the commodities giant's value in a week, raising questions over its future. Yet action is not without a sting for Washington too - if it leaves China even more dominant in resource-rich trouble spots.

Steinhoff payout may test South Africa reform zeal

27 Apr 2018

Hedge funds piled into 1.6 bln euros of the failed retailer’s bonds betting that its healthy South African unit will honour them. The fallout from Steinhoff’s collapse may make a payout politically tricky, and challenge new President Cyril Ramaphosa’s market-friendly credentials.

Vivo Energy offers pricey road to African growth

24 Apr 2018

The operator of 1,800 fuel stations across the continent is planning a stock market listing that values it at up to $3.3 billion. Earnings growth is healthy, and the company has scale. But a comparison with smaller regional rivals suggests the premium price tag is a stretch.

KPMG woes force South Africa to consider Big Three

18 Apr 2018

The audit firm’s future in the country is in doubt after it was sacked by the government – its biggest client – following the second scandal in under a year. Regulators have long worried about losing one of the Big Four global firms. South Africa provides a reluctant test case.

Hadas: Even Trump can’t make graft great again

11 Apr 2018

Resistance to corruption is evident in cases against ex-leaders of South Korea, Brazil and South Africa. Old royal privileges make no sense in modern economies. U.S. officials and the corporate elite have strayed, but rising middle classes will keep straightening out the crooked.

Naspers selldown prolongs Tencent dependence

22 Mar 2018

The South African group is offloading shares worth up to $11 bln in the Chinese giant. But it’s keeping the remaining 31 pct for at least three years, and will invest the proceeds. Shareholders have little reason to give it any more credit for its highly profitable Tencent bet.

Market tools can slake Cape Town’s water thirst

19 Mar 2018

The South African city’s taps may not run dry this year, but low rainfall, population growth and invasive flora keep the threat alive. Poor governance adds to the risk. Tradable water rights could bypass many of those problems, and set an example for other arid regions.

Barclays throws money at its many problems

22 Feb 2018

The UK bank’s boss Jes Staley has pledged to double payouts this year to boost shares trading at 0.7 times book. Yet Barclays needs to reverse falling revenue to meet a 9 percent return on tangible equity target by 2019. Even then, regulatory risks linger in the background.

South African bond rally has further to go

22 Feb 2018

The republic’s first budget under President Cyril Ramaphosa hiked taxes, an encouraging sign of fiscal rigour. South Africa still has to tackle its structural problems and avoid a junking of its debt. But with reform momentum gathering pace, its debt still looks attractive.

Stuffed KFC only has itself to blame

20 Feb 2018

The fried-chicken chain owned by Yum Brands had to close hundreds of UK restaurants after running out of poultry. Its plan to cut costs by ditching a long-term supplier for a cheaper one backfired. The cock-up shows that chasing higher margins is no sure way to feather your nest.

South Africa is nearer redemption than it looks

13 Feb 2018

The ruling ANC has decided to remove Jacob Zuma. While the scandal-hit president could still dig his heels in and force parliament to sack him, the party’s united front means his exit is probably imminent. That improves the chances of his successor delivering economic recovery.

Zuma exit spat exposes South Africa reform hurdles

7 Feb 2018

Thursday’s state of the nation address should have been delivered by President-elect Cyril Ramaphosa. Instead it was postponed because scandal-hit incumbent Jacob Zuma refused to step down. Even after he goes, political divisions could continue to hamper vital reforms.

Steinhoff reminds creditors they are not all equal

1 Feb 2018

The scandal-hit retailer is planning early repayment of a $1.3 bln South African bond in return for releasing funds to cash-strapped European brands. Other mainly international creditors will be asked for waivers. It’s an early indicator of the unofficial pecking order.