Star 2021-05-26

Siphelele Dludla siphelele.dludla@inl.co.za PUBLIC Enterprises Minister Pravin Gordhan yesterday said Eskom has managed to reduce its debt by R83 billion in the 2020/21 financial year. The reduction of Eskom’s debt could bode well for the economy and mitigate South Africa’s credit ratings status, as the troubled utility has been the single-biggest threat to the fiscus. Eskom’s debt has been weighing heavily on the country’s finances for many years. Tabling his department’s budget, Gordhan said Eskom’s debt had been reduced from R484bn to R401bn, mainly because of the repayment of the maturing debt and changes in the exchange rate. Gordhan said the government was trying to address operational efficiencies and the financial stability of state-owned enterprises, particularly in the context of a constrained fiscus. On top of reducing its debt,…

THE RAND yesterday rose to a near two-year high as economic data showed that early signs of turning points in business cycles in South Africa continued ticking up in March. The South African Reserve Bank (SARB) said yesterday that the composite leading business cycle indicator increased further by 1.7 percent in March following an upwardly revised 2.8 percent increase in February. This was the strongest leading indicator print since October last year. In response to this data, the rand strengthened to R13.82 against the dollar, its highest level since mid-July 2019, as the dollar continued to weaken in May despite favourable seasonality. The greenback also lost ground after dovish comments from the US Federal Reserve officials tempered fears about inflation-driven rate hikes. TreasuryONE’s currency strategist, Andre Cilliers, said…

Edward West edward.west@inl.co.za US PRIVATE and equity investment firm Sassoon Group has approved $50 billion (R692.5bn) for possible investment in South Africa over five years, chairperson David Sassoon told Business Report yesterday. J Sassoon Group, which is more than 500 years old and is the world’s oldest independent family-owned investment firm, planned to launch a Joburg office before the end of the year, said Sassoon. Sassoon said the group’s first investment in the country was $20 million in finance to a South African 100 percent black-owned energy start-up, Bluedrop Energy, for the construction of a state-of-the-art LPG cylinder manufacturing plant. The $20m was the first investment that formed part of $100m private equity funding that was available to invest in emerging, entrepreneurial and innovative businesses in South Africa.…

EDWARD WEST edward.west@inl.co.za INFORMATION and communications technology group AYO Technology Solutions (AYO), which posted moderate results for the six-months to February 2021 amid the subdued Covid-19 restricted economy, expected a “far improved” second half, chief executive Howard Plaatjes said yesterday. Not beating around the bush, he said: “One can’t really expect great results from any business in this environment. The pandemic has contracted revenues across all industries, which leads to a reduction in customers’ spend on IT infrastructure and services, and has a knock-on effect on our group performance.” He said low interest rates had also put pressure on investment income. While the group had “taken a knock in some divisions,” there had been good demand in other divisions, as well as strong potential for the second half of the…

EDWARD WEST edward.west@inl.co.za CORONATION Fund Managers’ headline earnings a share increased by 43.5 percent to 255.8 cents after it benefited from fast-rising markets since March last year and a strong outperformance of its client mandates, chief executive Anton Pillay said yesterday. Pillay said the unprecedented stimulus that was pumped into economies by central banks globally had buoyed capital markets, resulting in record-breaking short-term returns. As at March 31, 2021 most major indices were up well over 50 percent from their March 2020 lows. “Market reaction to Covid-19 presented rarely-seen opportunities for active investors like us, which, in turn, we converted into strong returns for our client portfolios, which positively impacted our revenue,” he said. However, Coronation’s management viewed this as a cyclical high for investment returns and…

GRINDROD Shipping Holdings, the JSE listed logistics group said yesterday that it had completed sales of the 2013-built medium-range tankers Leopard Moon and Leopard Sun. In conjunction with the sales, appro-ximately $24.7 million (R344.4m) debt remaining on the credit facility with NIBC Bank NV was repaid in full. The sales generated $17.9m in net proceeds after debt repayment with a further $2.7m release of restricted cash associated with the loan. Last month’s sale of the 2009-built small tanker Breede, which constituted part of the security package for the group’s $100m senior secured credit facility and was released from the security package in connection with the closing of the transaction. The group said that some $3.8m debt was repaid on the facility and the sale generated net proceeds to the company…