Star 2024-10-28

As the executive editor of Business Report and Personal Finance, I stand behind Independent Media’s decision to withdraw from the Press Council of South Africa (PCSA). This was not merely a gamble – it was a necessary response to an increasingly hostile environment where our commitment to press freedom is consistently undermined. In recent days, I have faced numerous enquiries regarding our departure from the PCSA. Let me clarify: News24 journalist Karyn Maughan’s article, titled “Survé targets senior judge”, ignited a flurry of controversy. Columnist Edmond Phiri’s comparison of Maughan to Nazi propagandist Leni Riefenstahl sparked outrage and led to complaints against the Sunday Independent, demonstrating how easily dissenting voices can be silenced. Despite presenting a robust defence, the PCSA ruled against the Sunday Independent and IOL. Their decision, which…

The International Monetary Fund (IMF) has indicated optimism that South Africa’s public finances will recover and that the National Treasury will manage to tame public debt on the back of fiscal consolidation. Finance Minister Enoch Godongwana will on Wednesday present the 2024 Medium-Term Budget Policy Statement (MTBPS), offering an updated view of the medium-term fiscal framework. This will be the first MTBPS presented under the Government of National Unity (GNU), and it is expected to reinforce the government’s ongoing fiscal consolidation efforts. In February, Godongwana said debt will peak at 75.3% of gross domestic product (GDP) in 2025/26. The IMF, in its latest World Economic Outlook, has already revised upwards South Africa’s economic growth projections for 2024 and 2025, forecasting GDP growth of 1.1% for 2024 from 0.9% previously, and…

CEO Vermaak says he planned to fund the proposed capital expenditure with vendor finance agreements with a steel company in Italy for long products, and with a company in Germany for the operation of ArcelorMittal’s shut-down Saldanha Steel plant A R19 billion transformation bid for ArcelorMittal South Africa (Amsa) by local firm Networth Investments has been rejected, despite promises to revolutionise the country’s struggling steel industry with green technology and more profitable stainless steel production. Networth CEO Harold Vermaak told Business Report last week that they had put in an offer to buy out ArcelorMittal Group’s 60% shareholding in Amsa, and around 2% of Amsa’s shares held by other foreign investors, in a leveraged buyout. Broadly, the strategy was to convert Amsa over time so that it ceases to produce…

South Africa’s Competition Commission gave the red light yesterday to Sun International’s proposed acquisition of Peermont Holdings, recommending that the Competition Tribunal prohibit the merger due to its potential effects on market competition. The $396.6 million (R70 billion) deal, announced in December last year, would include Peermont’s Emperors Palace resort and its online betting brand, PalaceBet. Sun International’s share price closed at R44.67 on Friday, up 0.86% on the JSE. The Competition Commission said the merger would significantly affect the casino gambling landscape in South Africa, reducing the number of national casino operators from three to two and creating a highly concentrated market where two companies would control 92% of casinos in the country. “The proposed merger is likely to substantially prevent and/or lessen competition in the provision of casino…

The share price of financial services group FirstRand slid nearly 3% on Friday after it announced its decision to appeal against a recent UK Court of Appeal ruling regarding commission disclosure practices in motor finance agreements. The share price ended Friday 2.78% lower on the JSE at R80.69. FirstRand will appeal to the UK’s Supreme Court and argue that motor dealers do not owe customers fiduciary duties or any other duty around providing advice, recommendations or information on an impartial basis. This judgment follows two pivotal cases where the court ruled that FirstRand’s disclosures were insufficient for customers to make informed decisions about the commission payments to motor dealers. FirstRand operates in the UK via its Aldermore specialist lender and savings bank, which owns UK vehicle finance business MotoNovo. The…

After half a decade in the doldrums, South African (SA) listed property appears to have finally turned a corner, with year to date (28.9%) and one year (55.0%) returns outstripping those of other domestic asset classes. The positive sentiment post-Government of National Unity has played a major role, but so too has the improvement in sector fundamentals as reflected by the recent reporting season. As we cast our eye over the medium term, we still see selective opportunities in the sector despite the recent strong performance, but also some stocks where the risk-reward skew is less compelling. Of the major SA property sub-sectors, modern logistics space has the most attractive underlying fundamentals. Ongoing supply chain optimisation by the country’s largest retailers and growth in e-commerce off a low base, present…