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/ 12 September 2005
The JSE touched fresh highs this week amid a frenzy of activity in the futures market, an unexpected, slight dip in the oil price and good retail figures.These pushed the All Share Index to test, but not quite touch, the magical 16 000 points level. On Wednesday, the index reached a record 15 968 before closing at 15 939 points.
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/ 6 September 2005
A savvy investment banker and businesswoman is about as close as one can get to choosing an ideal candidate to run the investment arm for South Africa’s economic engine room, Gauteng. Nomhle Canca slipped quietly into her job as CEO of Blue IQ Investments Holdings last September.
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/ 6 September 2005
The delay in the release of the second set of the black economic empowerment codes of good practice is causing "a marked confusion" in the market, an industry source told the <i>Mail & Guardian</i>. The drafting of the empowerment codes has been under way since December last year, when the first set of codes was released for public comment.
A "private" belly dancer, an aspiring Kilimanjaro climber and, if it tickles her fancy, a corporate environmental activist, if one does not deem that to be an oxymoron. These are the current and future projects of Mpho Nkeli, the executive director for human resources and black economic empowerment (BEE) at Alexander Forbes.
Telkom looked outside its own structures for new leadership when it named United States-educated, charismatic former youth leader Papi Molotsane as its CEO. A senior Transnet staffer described Molotsane as a "people’s person" who can be firm. Molotsane is a director of Arivia.kom, South Africa’s America’s Cup Challenge and Fike Investment.
Old Mutual’s short-term growth prospects will not be severely harmed if its planned acquisition of Swedish insurer Skandia fails to materialise. This is according to Julian Roberts, the group’s financial director. Roberts spoke to the <i>Mail & Guardian </i>after the group unveiled its interim results for the six months to June.
A R250-million pension and social grants payout tender, thought to benefit the African National Congress and senior officials in the Limpopo government, has been set aside by the Pretoria High Court. The tender was awarded to Cash Paymaster Services in late 2002, with its contract commencing in March 2003.
This week’s acquisition by SABMiller of Columbia’s Grupo Empresarial Bavaria adds another chapter to the story of a South African company that taught the world’s brewers a lesson. SABMiller took to the world stage by listing in London in March 1999. In the period since, the company’s share price has appreciated by 144% to Wednesday’s close of 968 pence (R112,47).
The Industrial Development Corporation can reflect on its results in one of two ways. It can bask in the glory of a robust nine-month period, as it did recently. The other view is to say that the stock market boom has given it considerable but artificial strength. The funder unveiled its results for the nine months to March as it prepares to move up a gear in its big project investments.
The unveiling of Transnet’s results this week highlighted how South Africa’s privatisation programme has been reshaped by sensible compromise and a convergence of interests between the government and labour. In his Budget vote in May, Public Enterprises Minister Alec Erwin announced the government expected to raise R8-billion from privatisation proceeds over the next 18 months.
Thulane Gcabashe possesses the modesty to realise that being CEO of a company such as Eskom merely offers a chance to make a small contribution to a phenomenally huge project. He is about to lead Eskom into what he calls "a new era of growth" in the form of a R93-billion capital expansion phase, which, he readily admits, "will never be completed in my time".
Philisiwe Buthelezi, the newly appointed CEO of the National Empowerment Fund (NEF), is just what the tainted and beleaguered funder needs. Someone to imbue it with credibility beyond reproach and to infuse it with a sense of urgency. She takes over an institution that is suffering a credibility crisis.
First the good news: the oil price spike witnessed recently is a temporary phenomenon, set to last only a few months. The bad news is that, because the greenback has strengthened over the past month, there is no inflationary shield usually offered by a weaker dollar.
The government is set to climb down on black economic empowerment (BEE) funding requirements when it unveils the final draft of the BEE Codes of Good Practice this week. A source privy to the drafting process said that the contentious requirements will be loosened. The Codes of Good Practice were unveiled in December, and have since been through an intensive consultation process.
South African residential property is still not overvalued, despite at least two years of phenomenal growth. At the same time, the number of property investors has risen, though they are buying fewer properties, and in the years ahead they will experience falling yields.
Old Mutual MD Roddy Sparks epitomises the company’s energy. On Thursday the insurance giant threw a big bash to celebrate 160 years of existence. Yet, with its new-found empowerment partners, the company has confidently branded itself the "New Mutual". Well, there is nothing like acquiring a young partner to make one feel new again.
If the Reserve Bank believes it has conquered inflation and is more concerned about socio-political holy grails of growth and employment, it should cut interest rates next week, according to Mandla Maleka, chief economist at Eskom Treasury. This in a week when French idiosyncrasies wreaked havoc on local currency.
This week’s results by banking group Absa emphasise the bank’s attraction to Barclays, and the British bank could make it soar. On Monday, South Africa’s largest retail bank unveiled an increase in headline earnings of 23,3% and an average return on equity of 25,5%, a figure that analysts expect to see increase.
President Thabo Mbeki’s questioning of employment statistics is not in any way denialism, but rather an "explanation-seeking necessary interrogation", says Haroon Bhorat, director of the Development Policy Research Unit at the University of Cape Town. More importantly, as Mbeki concedes, the questioning should not distract from the serious lack of formal, quality employment.
Statistics South Africa is facing a crisis, in the short term at least, in its attempt to improve the quality of its output. This is according to Dr Hillary Southall, chairperson of the Statistics Council. Southall describes the agency as being "woefully short of capacity" and says that if it is left unattended it will just "fall apart".
There is no end in sight to the consumer spending boom that has driven the economy for the past two years. Financial results released by food, clothing and furniture retailers recently show that, at best, we are in the middle of a phenomenon that will only be fully explained in hindsight.
South Africa’s short-term prospects of job creation lie in the growth of medium-sized companies (employing between 100 and 1 000 people) as small businesses are hampered by red tape and the big ones may be looking to foreign markets. But growing the medium enterprise sector requires tough action, such as breaking the Telkom monopoly to help grow the IT sector.
The Old Mutual empowerment deal, concluded last week, comes pretty close to satisfying the Department of Trade and Industry’s upcoming empowerment codes of good practice — tough requirements on ownership. Stopping short of giving it full endorsement, Philisiwe Buthelezi, the department’s chief director for empowerment, praised large parts of the deal’s funding at its unveiling.
Private higher education has presented new and exciting possibilities for career building in South Africa. It has helped supplement strained public education resources but, as is always the case where the profit motive is at play, there have been problems. ‘Private education providers in partnership with state institutions are critical at this stage of development […]
South African gold miners have to grin and bear the crunch in the short term, because "gold’s day is coming", according to mining investment analyst Dennis Mashile. Mashile spoke to the <i>Mail & Guardian</i> in a week when figures released by the Chamber of Mines showed that gold production last year plummeted to 308 tonnes — a level not seen since the Great Depression.
Mergers and acquisition activity continued its recovery in 2004, with BEE deals providing a now customary boost to liven "a controversial year", according to the 14th Ernst & Young mergers and acquisitions survey. The survey found that in 2004 the number of mergers and acquisitions deals increased from 790 to 823. The value of deals rose from R150-billion to R177,4-billion.
A chance of a rate cut by the South African Reserve Bank later this month was put out of reach by this week’s weakening of the rand, persistently high oil prices, a widening current account deficit and robust credit growth. On Thursday, the Reserve Bank reported that private sector credit extension in February grew by 17,01% compared to a year earlier, up from 15,22% in January.
South Africa’s robust economic growth made a small, hardly noticeable dent in the country’s massive unemployment rate. Yet those who are lucky enough to be employed in the formal sector saw earnings increase faster than the number of their peers. The latest figures show youth unemployment remains chronically high, while 60% of discouraged work seekers are female.
South African business retained its confidence, but that buoyancy may be tempered in the months ahead by high oil prices and runaway consumer spending.
On Thursday, the South African Chamber of Business (Sacob) released its Business Confidence Index for February at 126,9, but the index was recorded ahead of last week’s Budget and does not include this week’s spike in the oil price and continued consumer spending.
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/ 17 February 2005
As the National Economic and Development Labour Council (Nedlac) celebrates its 10th anniversary on Friday, it has to reinvent itself or run the risk of being sidelined as irrelevant. That is according to commentators who spoke to the <i>Mail & Guardian</i> ahead of its milestone anniversary. The institution now finds itself challenged on a range of fronts.
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/ 15 February 2005
Dali Mpofu’s emergence as a central figure in the Deutsche Bank empowerment deal marks his transition from an advocate, of legal and social matters, to an economic player in the empowerment arena. He is also currently driving the formulation of the empowerment charter for Information and Communications Technology. He spoke to the <i>Mail & Guardian</i> last week.
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/ 8 February 2005
"There were no guarantees when I started. I was brought in to learn about the business, the culture, the people and strategic issues. The agreement was that when the time was right, I would make the move. The timing for me is perfect."
New Anglo American CEO Lazarus Zim talks to the <i>Mail & Guardian</i> about transformation, South Africa’s place in the group and political risk.