Star 2022-12-02

NAMPAK’S share price plunged 30.26% to R1.36 after it forecast lower earnings and announced a R2 billion rights issue to refinance debt, because “self-help” measures to raise the finance were not sufficient. Shareholders typically don’t like rights issues, because the increased number of shares dilute a company’s earnings and dividends. The rights issue also drew sharp commentary on social media, with tradinglikeafox (@tradinglikeafox), for instance, saying on Twitter: “Nampak down 35% today on a disastrous trading statement and a massive rights issue SA inc is struggling.” The Finance Ghost (@Finance- Ghost) said: “Of the R2bn that Nampak wants to raise, R150 million is needed for transaction costs of the refinancing and rights offer. You know those fancy buildings in Sandton full of bankers and lawyers? Now you understand…

THE NEW VEHICLE market in South Africa continued its resilient performance in November, rising by 18.2% and registering its eleventh consecutive month of year-on-year growth. This was despite a myriad negative economic pressures, including rising interest rates, a drastic increase in load shedding, high fuel prices, a weak economy and ongoing stock supply shortages. The National Association of Automobile Manufacturers of South Africa (Naamsa) yesterday said the aggregate domestic new vehicle sales grew by 7 618 units to 49 413 units in November compared to 41 795 vehicles sold in the same month last year. Naamsa said export sales recorded an increase of 13 479 units, or 64.7%, to 34 310 units in November compared to the 20 831 vehicles exported in November 2021.…

Shockwaves ripple through the local markets, and rand buckles under pressure POLITICAL uncertainty in South Africa related to President Cyril Ramaphosa’s future has left a bloodbath on the JSE, with the rand tanking and financial stocks plummeting. Bank stocks plunged nearly 10% yesterday, led by Absa, which fell 9.6% to R185.40 per share; followed by Capitec, which was down 9.3% to R1836. 31 per share. FirstRand and Nedbank lost 9.2% and 8.8% to R60.79 and R208.45 per share, respectively. This followed reports that Ramaphosa was considering resigning in the wake of preliminary evidence he may have committed serious misconduct. The rand fell by more than 3% to R17.90 to the US dollar in intraday trade, the lowest since November 4, before paring losses to R17.66 to the dollar by…

IN THE 2021/2022 financial year, Ayo Technology Solutions (AYO) contributed almost R95 million to the Government Employees Pension Fund (GEPF) in the form of dividends. AYO, the country’s single largest most transformed ICT investment company, announced its results earlier this week, and despite posting a loss made the decision to pay out dividends. This, of course, has been greeted with some scepticism by the armchair traders who are vocally outspoken on everything AYO. However, if we look beyond the obvious and remove the disparaging external chatter, there are sound reasons for the technology giant to dip into its reserves to bolster its shareholders’ pockets, especially those of the pensioners whose hard-earned money it is, through the GEPF, which is managed by the Public Investment Corporation (PIC). The PIC is…

SASOL’S share price closed 4.72% lower on the JSE yesterday at R285.05 after it reported production issues that have forced it to revise downwards its guidance for local production of fuels and chemicals operations. It nevertheless forecast a more than 20% increase in headline earnings per share (Heps) for the six months to December 31. In explaining the higher earnings, the group said in a trading statement: “We continue to see the favourable impact of the higher Brent crude oil price, refining margins and weaker rand/US dollar exchange rate on gross margins. “These benefits were partly offset by the downturn in chemical sales prices and higher chemical feedstock prices in our international operations.” An internet search, however, shows the oil price has fallen steadily since July with, for instance, the…

AFRICAN Equity Empowerment Investments’ (AEEI) headline loss per share (Heps) widened 68.36% to 37.16 cents from 22.07c a share for the year to August 31 as the weakening global economic environment and resulting disruptions impacted the operations and valuations of the group’s diversified investments. Net asset value per share fell 9.9% to 993.32c per share from 1 102.54c per share. The board did not declare a dividend. The group’s directors said revenue fell slightly by 0.24% due to a challenging global economic environment characterised by increasing pressure on prices, resulting in lower margins and this, coupled with accounting adjustments on investments, led to an overall loss of R330 million. The basic loss per share increased to 45.78c from a loss of 26.48c a share in 2021, mainly…