South Africa

Steinhoff meltdown shows market fallibility

6 Dec 2017

The furniture retailer shed more than half its market value after a probe was launched into accounting irregularities and its CEO stepped down. Investors who had ignored red flags such as a 2015 investigation and oddly low tax rates are paying the price of being too trusting.

McKinsey needs to run a matrix on itself

10 Nov 2017

The consulting firm has been facing tough questions over hiring in Saudi, and work in South Africa. Neither helps its image. But more worrying is how data is making consulting a commodity. Doling out advice looks less valuable when one’s own business is struggling.

Mediclinic takes advantage of sickly Spire

23 Oct 2017

The operator of hospitals in South Africa and the Gulf has bid 1.2 bln pounds in cash and shares for its UK peer. Spire Healthcare has been hit by a scandal, government cuts, and an executive vacuum. Mediclinic is offering a stingy premium and too much of its unappealing stock.

FirstRand makes punt on post-Brexit housing market

16 Oct 2017

The South African bank has offered 1.1 billion pounds for Britain’s Aldermore. Shares in the mortgage lender had slipped amid concerns about the slowing property market. At 8 times expected 2018 earnings, FirstRand could be getting a bargain – provided bad loans don’t shoot up.

Telco banks may be consigned to fringes of finance

4 Oct 2017

Orange and Altice plan to offer banking services to capitalise on a boom in digital finance. It’s a novel solution to slowing telecom revenue growth, and similar ventures were a hit in Africa. But mobile operators are entering a crowded field, with no obvious advantage.

Rocket Internet rejig exposes valuation mismatch

28 Sep 2017

The German tech investor is jettisoning half its stake in Delivery Hero for 660 mln euros. That’s welcome, but investors still don’t trust boss Oliver Samwer with the cash. Unless he pledges to return more of it to shareholders, Rocket’s stratospheric discount will persist.

Agarwal’s Anglo wager is risky way to plot breakup

21 Sep 2017

The Indian billionaire is doubling down. Paying as much as 1.5 billion pounds to raise his stake in the UK-listed miner to 20 pct may be a way of trying to force a breakup. But unpredictable commodities prices and South Africa’s volatile politics could scupper any such plans.

Bell Pottinger falls victim to PR disruption

5 Sep 2017

The UK public relations firm is in meltdown after a divisive South African campaign. The rise of online media makes it harder to justify big fees and spurs forays into far-flung markets. The result in this case is a warning to an industry that has so far shrugged off media woes.

Naspers’ addiction to Tencent is unhealthy

3 Jul 2017

The South African group is worth $28 bln less than its stake in the Chinese gaming giant. Naspers boss Bob van Dijk rules out a spinoff, but that would be the best fix. Unfortunately for would-be activists, supervoting shares make it hard for outsiders to apply pressure.

South Africa kicks miners, scores own goal

15 Jun 2017

Shares in Anglo American and peers fell after the government lifted the minimum threshold for black ownership of resource companies. The new rules are a blow to efforts to rebuild confidence at home and abroad. An economy that is already in recession will share investors' pain.

Barclays faces unfamiliar issue: excess capital

1 Jun 2017

The UK lender is offloading all but 15 pct of its African unit for $2.9 bln after strong demand from investors. The sale should lift its capital ratio above 13 pct. After a year of retrenchment CEO Jes Staley can begin to think about how the slimmed-down bank can reward shareholders.

Barclays has honourable Africa retreat in sight

31 May 2017

The UK lender is offloading a $2 bln stake in its Johannesburg-listed unit as part of its exit from the continent. Political turmoil in South Africa may have interfered with a sale. But a supportive local fund and the robust rand have allowed Barclays to effect an elegant escape.

Zimbabwe takes monetary lunacy to the next level

22 May 2017

The African state suffered hyperinflation in 2007 after paying bills by printing its own currency. A decade on, it is doing so by printing U.S. dollars instead. The idea of conjuring foreign currency from nowhere with the tap of a keyboard sounds too good to be true – and is.

Abu Dhabi cure has limits for Mediclinic investors

27 Apr 2017

The emirate has thrown a sop to citizens by agreeing to pay more of their healthcare costs. That's good for local hospital operators like UK-listed Mediclinic. But a near-20 percent jump in its share price looks exuberant. Abu Dhabi may try to recoup its money in other ways.

South Africa’s slow burn cuts chances of quick fix

6 Apr 2017

President Jacob Zuma seems to be doing his best to get foreign investors to dump domestic assets. That may not lead to a sudden stop: only a small minority face being forced sellers. The bad news is that this could slow the process to replace him with a more responsible leader.

Gordhan exit is dual blow for South African debt

31 Mar 2017

President Jacob Zuma has fired his respected Finance Minister Pravin Gordhan. Instead of action to rein in South Africa’s debt, it will probably now rise. The damage to the state’s credibility means the cost of servicing the debt pile will head in the same unsettling direction.

South Africa’s real problem: credibility downgrade

28 Mar 2017

President Jacob Zuma's abrupt recalling of his respected finance minister hit domestic assets. The latest spat could speed a downgrade of the state's sovereign debt, although much of that appears priced in. The greater damage would be to South Africa’s institutional solidity.

Anglo raid is a complex way to do simple thing

16 Mar 2017

Indian magnate Anil Agarwal appears to be building roughly a 12 percent stake in the mining group. In fact he is renting it, using an exchangeable bond to get access to the votes. The structure is clever, but suggests he is more interested in influence than direct financial gain.

Agarwal weakens Anglo’s breakup defences

16 Mar 2017

Indian billionaire Anil Agarwal’s raid on the UK-listed mining giant may be a prelude to asking for the company to break itself up. Splitting off South African assets might create value. Boss Mark Cutifani may still prefer another course, but the pressure on him is now rising.

Best of Breakingviews 2016: Our readers’ top picks

30 Dec 2016

You demonstrated a varied, voracious appetite for insight in 2016. The most-clicked columns, podcasts and graphics encompassed the rise of Trump and Brexit Britain to Singapore, Saudi Arabia, negative rates, tech titans and an ethical dilemma for Harvard's business school dean.