Star 2022-12-20

WOOLWORTHS (Woolies) yesterday finally sold off its problematic David Jones Australian subsidiary, in a loss-making deal, but which will remove R17 billion in liabilities from its balance sheet. Woolies announced plans yesterday to sell David Jones to an Australian private-equity firm, Anchorage Capital Partners, but its CEO Roy Bagattini, in a call to journalists, did not disclose how much the subsidiary would be sold for. Bloomberg reported the deal to be worth around A$130 million (about R1.5 billion). Woolies bought David Jones for R21.5bn in 2014, making the buy its biggest acquisition through which it aimed to create one of the leading retailers in the Southern hemisphere. Bagattini said the investment over the past eight years had been painful for Woolies and he was excited about the sale. Investors…

However, analysts cautioned that this was just the first hurdle he has to clear THE RAND rallied to a one-week high yesterday as investors cheered the re-election of Cyril Ramaphosa as the president of the governing ANC. However, analysts cautioned that this was just the first hurdle Ramaphosa has to clear to secure support for his economic policies from the majority of conference delegates. Ramaphosa comfortably won re-election with 2 436 votes against 1 897 votes garnered by his former health minister Dr Zweli Mkhize, following a fiercely contested campaign yesterday. To the investor community this signalled a continuation of policy reforms that Ramaphosa’s administration in government had already embarked on, such as allowing private sector participation in state-owned enterprises. As a result, the rand strengthened from R17.64 against the…

THE SOUTH African government could receive less tax revenue in the next financial year as a result of economic stagnation due to heightened power cuts. This was a warning from a tax expert at CMS South Africa yesterday, an international law firm and tax consultants, as Eskom ramped up its rotational load shedding to Stage 6 over the weekend due to a number of unplanned breakdowns. CMS South Africa head of tax, Bernard Mofokeng, and senior tax consultant, Nico Alberts, in a note said it was shocking that the government did not regard the now regular power blackouts lasting four hours at a time as the single biggest risk to economic growth. Economists estimate the damage to the economy at more than R4 billion a day and that…

The biggest challenge will be to keep the lights on. Eskom may collapse totally. This may push the economy in energy, as crime and looting like the KwaZulu-Natal and Gauteng saga of last year may re-appear. De Wet: Looking back on the highs and lows on the economic front during 2022, what stands out for you? Harmse: On the positive side: The better-than-expected economic growth rate of 1.6% in quarter three (Q3), lower unemployment over each quarter namely 34.9% a year ago, coming down to 33.9% in Q1 to 32.9% in Q3. Few are aware that the economy in fact created more than 1 million jobs over the past year, as employment increased from 1.4 million from 14.282m in September 2021 to 15.765m at the end of September. Although the…

Despite the global economic environment deteriorating considerably this year and a number of macroeconomic trends already pointing to the global economy being in technical recession, the metals and engineering sector continues to show remarkable resilience and tenacity, according to Steel and Engineering Industries Federation of Southern Africa (Seifsa) CEO Lucio Trentini. In an interview with Business Report, Trentini said South Africa’s economy – despite being battered by floods, strikes, record load shedding, soaring inflation and interest rates – was still set to grow by 1.9% this year and the metals and engineering sector by 1.1% (measured on a production basis). However, this was not nearly enough to tackle the many current challenges and those that 2023 will present. “A key achievement this year was Seifsa working closely with other employer…

“WE will approach the year with caution, hoping for the best, but preparing for the worst,” says Aaron Munetsi, CEO of the Airlines Association of Southern Africa (Aasa). Aasa represents most of the airlines based in the Southern African Development Community (SADC) region, and addresses issues affecting their ability to do business. It acts on behalf of members with regard to engagements with airport and air navigation service operators, meteorological services and their respective tariff regulators. They also liaise with airworthiness authorities, transport policymakers, legislators and departmental officials. In an interview with Business Report on 2022 and the outlook for 2023, Munetsi said that as South Africa was so brutally reminded with Covid-19 and then Russia’s invasion of Ukraine, “we’re not always good at accurately reading the tea-leaves”. Going into…