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Five things making headlines in South Africa today

Old Mutual suspends CEO, Tradehold results, trade tensions spread to SA and more.

Here’s what caught our attention on Friday:

1. Old Mutual suspends CEO

Old Mutual has suspended its Chief Financial Officer, Peter Moyo, following a ‘material breakdown in trust and confidence’ between him and the board. The company released a Sens announcement on Friday, notifying shareholders of the change, adding that Moyo has been suspended with immediate effect. The company’s chief operating officer, Iain Williamson, will assume the role as acting CEO.

Read: Old Mutual suspends CEO, citing ‘material breakdown in trust’

2. Tradehold results

Investment holding company, Tradehold, published its financial results for the year ending February 28 2019, in which it highlights its restructuring after its financial services interests were unbundled and listed separately on the JSE’s AltX as Mettle Investments, adding it therefore cannot be directly comparable to the corresponding period. Headline earnings per share amounted to 8 pence. Revenue amounted to £96.4 million, while total assets now amount to £859 million. The company says unbundling Tradehold has turned it into a property business with net assets split between the UK in pound, in Africa as dollar assets and South Africa in rand. The board has declared a gross cash dividend of 55 cents per ordinary share.

3. Trade war pains can hit SA 

The ongoing tit-for-tat trade war between the US-China is not seeing much reprieve, with the US continuously taking a hit at Chinese goods and technology in particular. This is however, not just an international war. Bloomberg is reporting that South Africa has a ‘small and open economy, which grows by selling into the global demand’ is no different from other emerging markets feeling the heat. The flaring trade war can stagnate SA’s efforts to grow the economy and worsen negative sentiment around equity prices.

Read: South Africa part of collateral damage from US-China trade war

4. Zondo commission hears of Anoj Singh’s involvement in Transnet

The ongoing commission of inquiry into state capture, which is still focusing its attention on freight utility Transnet, heard evidence from former Transnet engineer Francis Callard on Thursday. Callard claimed that the interference of executives, in the procurement of new locomotives, resulted in the price of 1 064 trains increasing to R55 billion from R38 million. Callard made special mention of then Transnet CFO, Anoj Singh who he says requested the delivery of locomotives be reduced to four years from seven years. According to EWN, Callard says the executive decision to accelerate delivery made no operational or commercial sense.

5. Rand update

An eventful week has had the rand moving in a pendulum. Locally, Wednesday’s inflation rate slipped below the Sarb’s midpoint target of 4.5% and slowed to 4.4% causing the rand to reverse gains it made in a previous session. The Sarb decided to keep the repo rate unchanged on Thursday at 6.75% for a third consecutive time. It also cut South Africa’s growth outlook and appeared dovish towards future growth. On an international front, the US-Sino trade war continues to flare up with the US taking a hit at most tech stocks in China, and imposing a ban on Huawei Technologies. Finally in India, PM Narendra Modi will retain power, after his party won 303 seats in parliament, following a six-week long election process. On Friday, the rand was at R14.42 to the dollar at 8:57. 

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