It’s 102 years later, and we’re still not sure of the source of the 1918 Spanish flu epidemic. The only thing we know for sure is that it wasn’t Spain.
That country has carried the tag simply because it was the only country in the ‘West’ where journalists weren’t prohibited (by war censors) from mentioning the devastating impact of a deadly strain of flu. Spain was neutral during World War I. The source could have been the US or China.
Now here we are in 2020 and governments across the globe are being forced to take decisions that have life-threatening implications for individuals and economies on the basis of a flood of data that seems to point in any direction you like. Every new bit of data highlights how little we actually know about Covid-19 and where it might be going.
Only one thing is certain – that no matter what they do, governments will be accused of doing the wrong thing.
When it comes to companies, we have seen some obvious steps and missteps, as well as a little opacity.
PSG’s titillating cautionary
PSG shareholders at least had some distraction from last week’s generally grim wall-to-wall Covid-19 coverage. Just hours before President Cyril Ramaphosa outlined the five levels of the Covid-19 lockdown, PSG threw its shareholders a bone of sorts in the form of a titillating cautionary announcement.
It was so delightfully open-ended there was no limit to the speculation.
All PSG said was that it was “considering a corporate action/transaction, which if implemented, may have a material effect on the price of the company’s securities”.
The most popular strain of speculation pointed to a transaction involving 44%-owned Zeder, which has just pocketed R6 billion cash from PepsiCo’s acquisition of Pioneer Foods in which it had a stake. Taking out the minorities was thought the most likely transaction on the cards. The least likely was thought to be an unbundling of PSG’s extremely valuable Capitec holding.
And, perhaps in keeping with the ‘anything could happen’ mood of the times, one investor wondered about a Chinese fund making a play for the conglomerate.
Talking of Capitec, last week the company bought up a nice chunk of shares at bargain-basement prices to distribute among select senior managers. No crisis should go unwasted.
Which is perhaps what some Dis-Chem executives were thinking when they risked the wrath of the competition authorities by allegedly hiking the prices of face masks.
Dis-Chem’s PR disaster
Dis-Chem is denying any wrongdoing but its executives may not have heard about how rigorously the new ‘price-gouging’ restrictions are being imposed by the authorities.
On Friday the Competition Tribunal ruled – in a similar matter – that a Gauteng hardware store had to refund customers overcharged for surgical gloves. The Tribunal doesn’t seem to be getting too bogged down in precise economic argument about the definition of an ‘excessive’ price.
Just a few weeks ago Dis-Chem caused a bit of a ruckus when it embarked on a rental go-slow even though many of its ‘essential service’ stores continued to trade.
Optimism, survival and relief …
One individual evidently optimistic things will look okay by at least 2024 is Ralph Mupita, MTN’s chief financial officer. Last week Mupita bought 320 000 of MTN’s Mauritius Investment Ltd bonds, due to mature in 2024, with a total nominal value of $298 million – that’s R5.7 billion. The Sens announcement gives no indication of what he actually had to pay for them.
Coronation Fund Managers survived the March stock market mauling reasonably well. Assets under management at end-March were R508 billion, down just 12% from the end-January figure of R576 billion. All things considered that’s not too bad, but presumably there’s worse to come.
Prosus and Naspers shareholders might have heaved a sigh of relief last week when they heard the UK competition authorities had given the all-clear for Amazon to up its stake in Deliveroo.
The authorities had sat on the proposed funding tie-up for almost a year but caved in the face of Covid-19’s threat not just to Deliveroo but to the restaurant industry which has increased its reliance on deliveries during the lockdown period. A close relationship with Amazon will make Deliveroo a much more formidable competitor for Just Eat, which Prosus tried, but failed, to acquire last year.
The good news – it’s all relative – is that not all companies are taking Anglo American’s shockingly minimalist approach to annual general meetings during the lockdown.
Anglo, which in critical respects such as taking care of employees is behaving commendably, is requiring shareholders to send in their questions and their votes, days before the ‘meeting’ to which they will have no access. Answers to the questions will be put on the group’s website after the meeting.
Mondi went one step further and said answers to just some of the questions would be published on the website after the meeting.
In contrast to that mid-20th Century offering, investment holding company Sabvest is providing its shareholders with a truly 21st Century option. They will be able to sign into a virtual meeting at which they will be able to ask questions and, after hearing the answers, vote on the meeting’s resolutions.
Well done to Sabvest.