Star 2022-12-08

SUNRISE Energy, struggling operator of an LPG (liquid petroleum gas) import terminal in Saldanha Bay that supplies the Western Cape, said the takeover by the Strategic Fuel Fund (SFF) of gas importer and distributor in business rescue Avedia would result in Sunrise having to close its doors. This was according to RBB Consulting economist Jacob Muller, who yesterday presented the economic case to the Competition Tribunal that the proposed merger of Avedia’s operations with those of the state-owned SFF should be prohibited. He said the likelihood of Sunrise having to shut its 5 500 metric ton capacity LPG storage and terminal facilities in Saldanha Bay if the Avedia deal went ahead would result in less competition, in an unnecessary duplication of facilities and less gas import capacity being available to…

Financial Sector Conduct Authority (FSCA) on Wednesday said it had issued a much reduced revised penalty of R20 million to disgraced former Steinhoff CEO Markus Jooste for insider trading. On October 29, 2020, the FSCA imposed an administrative penalty of R161.6 million on Jooste for breaches of the Financial Markets Act. But it said the revised penalty was in line with the Financial Sector Tribunal’s decision on insider trading regarding Steinhoff International Holdings. The FSCA said R1m of this penalty had been levied for encouraging Jaap du Toit to sell his Steinhoff shares. “Mr du Toit never acted on the contents of the warning SMS. The provision prohibits an insider from encouraging or discouraging another person to deal in securities which the inside information relates to,” it said. The…

South Africans should brace for candle-lit Christmas dinners as utility implements Stage 6 SOUTH Africans should brace for candle-lit Christmas dinners this year, as Eskom has not ruled out higher stages of power cuts – up to Stage 8 – after implementing Stage 6 load shedding for the first time since September 18. The struggling power utility yesterday increased load shedding from Stage 3 to Stage 4 in the morning, then ramped it up to Stage 6 indefinitely, at noon. Eskom said this was due to a high number of breakdowns since midnight on Tuesday, as well as the requirement to strictly preserve the remaining emergency generation reserves. The utility currently has breakdowns totalling 17 800MW of capacity, in addition to planned maintenance of 5 400MW, together taking 23 200MW…

CONFIDENCE levels among South African manufacturers have remained muted amid a challenging outlook for the sector, due to the country’s ongoing intensifying energy crisis. The Absa Manufacturing Survey for the fourth quarter showed that overall business confidence during the quarter remained unchanged at 26 points, after two consecutive quarterly declines. Justin Schmidt, the head of the manufacturing sector at Absa Relationship Banking, said this was in part due to pressure from load shedding, water restrictions and transport constraints, which continue to weigh on local manufacturers. “Despite the fourth quarter being a peak sales period for manufacturers, increased production costs and insufficient demand as consumers struggle with the rising cost of living hampered potential improvements in confidence this quarter,” said Schmidt. “Additionally, insufficient demand will remain a concern as many manufacturers…

ABSA Group, a South African lender, said yesterday due to the uncertain economic outlook for next year, it expects its credit impairments to increase due to higher interest rates negatively affecting consumer finances. In its trading update for the 10 months ended October 31, 2022, the group said credit impairments increased, with its credit loss ratio in the upper half of its through-the-cycle target range of 75 to 100 basis points. Personal loan credit impairments were also expected to increase materially, in part due to new business strain. “Within our South African retail portfolio, higher inflation and the 325 basis points rise in policy rates are expected to increase credit impairments. “Vehicle finance credit impairments are expected to grow materially, despite improving noticeably in the second half, while home loans…

SOUTH Africa keeps on getting distracted in its policies and approaches geared towards raising the long-term growth of its economy, said economist Keith Lockwood. He spoke with Business Report following Altron FinTech’s release of its latest Short-term Credit Impact Index, known as the AFSCI Index, which tracks the impact of short-term credit extension on the South African economy on a quarterly basis. The index for the third quarter of 2022, showed a 0.9% quarter-on-quarter increase in net short-term credit extension. Explaining why the index remains pertinent, Lockwood said while short-term credit represented a very small share of total consumer credit, it was important because it provided a barometer of the financial health of a vulnerable, and often neglected portion of South Africa’s population. He asked whether the country wanted to…