MONDAY, 2.30PM:
FIGURES released on Friday make it unlikely that interest rates will be cut soon, and economists are speculating that a cut will come only in mid-March, perhaps to be followed by another later in the year.
The Reserve Bank announced that December money supply grew 17,16% year-on-year, lower than the expected 17,81% rise, largely because of reduced net claims on government. Private sector credit extension grew 14,18%, higher than the hoped-for 13,92%. This is blamed on private use of overdrafts and credit cards.
The easing of interest rates is expected to be postponed until the introduction of the Reserve Bank’s securities repurchase system in mid-March.
However, if monetary aggregates continue to slow down in line with inflation and the trade balance, as it is speculated they will, a Bank rate cut could well be on the way.
BUSINESS BRIEFS
GOLD FIELDS LISTED
THE new company formed by the merger of Gencor and Gold Fields of South Africa will be listed on the Johannesburg Stock Exchange on Monday. An application for secondary listing on the London Stock Exchange and plans to trade in sponsored American depository receipts in New York are already in progress.
ADCORP FIGHTS FOR SIMEKA NAME
ADCORP Holdings could face a court interdict halting its use of the Simeka brand name, after negotiations to resolve a fall-out with three former directors of its joint-venture partner, Simeka Holdings, stalled on Friday. Christine Qunta, attorney for the three directors, said Adcorp had made a “ridiculous and insulting” offer to her clients, and accused Adcorp of fronting practices.
CAPITAL ALLIANCE COULD SELL LIFE ARM
CAPITAL Alliance could be about to sell its life arm, Capital Alliance Life, to Fedsure. The deal is thought to be worth at R1,2-billion, and will free Capital management — led by erstwhile JCI chairman Mzi Khumalo — to concentrate on investment holdings.
ROWLAND TO CANVASS SA BROKERS
TINY ROWLAND, former founder and chief executive of British multinational Lonrho, is to canvass South African stockbrokers for the appointment of two new non-executive directors to the Lonrho board. Rowland has slated the recent performance of the Lonrho board, most notably its proposed merger with the now-collapsing mining group JCI.
SADC OWED $4,5m
SOUTHERN African Development Community funds are short $4,5-million owed by member countries, all of which pay equal amounts in dues. The trading bloc, slowed by the creeping pace at which member countries are ratifying its treaties, has an operating budget of $12,5-million for this year.
ZIM COST OF LIVING UP 20,1%
ZIMBABWE’S central statistical office has announced that the cost of living in the country rose 20,1% last year. The figure, which does not take into account the 50% drop in the value of the Zimbabwean dollar in November/December last year, is regarded as highly conservative.