TUESDAY, 6.00PM:
SOUTH African business confidence in June fell to its lowest point in six years, largely mirroring the movement of the plunging rand.
Releasing the latest Sacob Business Confidence Index, the chamber’s director of economic policy Dr Ben van Rensburg said the June index registered a 5,7-point drop over May to 92,2 — signalling a further slowing of the economy and a dampening of economic expectations.
Van Rensburg said a possible ray of light is the planned demutualisation of Old Mutual and Sanlam which, it is hoped, will stimulate growth, and the export opportunities the depreciating rand offers. He warned, however, that negative domestic pressure in prices could make the latter windfall short-lived.
Apart from the depreciating rand, the month saw lower share prices, lower imports, lower retail sales and a lower dollar price for gold, while inflation and interest rates went up.
On the positive side, merchandise exports and manufacturing production figures rose.
BUSINESS BRIEFS
LTA MOVES ON OZ MARKET
CONSTRUCTION group LTA Process Engineering on Monday acquired a 50% holding in Ausenco, an Australian-based firm specialising in the design, construction and commissioning of mineral-processing plants. The acquisition will allow the two companies to use their joint capabilities to enter new markets and expand their projects across a wider section of the coal, metallurgical and chemical process industries.
PREMIER SALE EXPECTED
FOOD manufacturer Premier Group’s share price closed 5c lower at R1,56 on Monday, on rumours that the group’s milling and baking assets are to be sold to unlisted food group Genfood. Premier on June 26 issued a cautionary announcement advising shareholders that negotiations are in progress “in regard to a proposed transaction relating to one of Premier’s subsidiaries”.
MONDI, CONSOL CONCLUDE SALE
MONDI, Anglo American Industrial Corporation’s unlisted paper and pulp subsidiary, on Monday announced that it has concluded the purchase of the corrugated carton and Interpak packaging business from Consol. Mondi would not disclose the price of the deal, saying only that the acquired businesses have an annual turnover of R550-million. The deal, announced in March, has been held up while unidentified conditions were discussed. Consol will now focus on its core assets in glass packaging.
N PROV DELAYS CASINO LICENCE
THE Northern Province Casino and Gaming Board delayed announcing the province’s casino licence winner on Friday when two of the bidders applied for a court interdict to stop the announcement, the board said on Monday. Gaming board chairman Lazarus Mahlangu said that Great North Resorts and Hunters Entertainment Centre are challenging the board’s capability and its short-listing procedure. The board is opposing the application, which will be heard on Wednesday. The board announced last month that only one of the available two licences will be awarded to the short-listed bidders, as all the short-listed proposals are in or around Pietersburg. Hunters did not make it onto the short-list.
SA FIRMS IN TOP 200
SOUTH African companies made a strong showing on Business Week magazine’s 1998/99 list of the top 200 emerging market firms. The list ranks companies in terms of their dollar market value. Anglo American moved up one place to number 11, followed closely by FirstRand, the second-highest newcomer at number 13. FirstRand is the recently merged financial services group made up of First National Bank, Southern Life, Momentum Life and Rand Merchant Bank. Also featured on the list are South African Breweries, Dimension Data, Investec, Orion Selections, Liberty Life, Standard Bank Investment Corporation, Nedcor, Absa, De Beers, Rembrandt Controlling Interests, Anglo American Platinum and Sasol. Johnnic and Metropolitian Life, two black empowerment firms, are also ranked.
IMF SLAMS ZIM
THE International Monetary Fund has criticised Zimbabwe’s plan to reduce its civil service, saying that the retrenchment programme, carried out during the first phase of government reforms, was not well planned. The IMF also criticised President Robert Mugabe’s administration for overspending. Finance Minister Herbert Murerwa said the Zimbabwean government plans to reduce expenditure from 36,5% to below 34% by the turn of the century. Zimbabwe, like many other developing countries, is implementing measures worked out by the World Bank and the IMF to improve economic growth.