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Five things making headlines in South Africa today

Q1 GDP shrinks 3.2%, trouble spelled for SOEs and Ramaphosa, Intu Properties appoints CFO, IMF calls for speedy SA economic recovery and more.

Here’s what caught our attention on Tuesday:

1. Q1 GDP figures

South Africa’s gross domestic product for the first quarter of 2019 contracted 3.2% with manufacturing sector suffering most. This is compared to the 1.4% increase in the last quarter of 2018. The contraction is just less than double the 1.7% forecast by economists polled by Reuters. Year-on-year growth in South Africa was zero compared with forecasts of growth of 0.7%. The rand weakened to R14.60 to the dollar at 11:49 in response to the announcement. 

Read: Economy nosedives in Q1, hurting rand

2. SOEs in hot water

In just over a week, the CEOs of two very key, yet very troubled state-owned enterprises handed in their resignations. Eskom CEO, Phakamani Hadebe, alongside SAA CEO, Vuyani Jarana threw in the towel. Reuters is reporting that the resignations spell trouble for President Ramaphosa and his reform drive, and have the potential to hurt investor sentiment and the view of credit-rating agencies. Both CEOs quit after being in the role for less than two years, with the monumental task of replacing the them now beginning. 

Read: Eskom CEO resigns for health reasons

3. Intu Properties appoints chief financial officer

British real estate investment trust, Intu Properties has appointed Robert Allen as the company’s new chief financial officer, effective from Monday, June 10, 2019. Allen previously served as the group chief financial officer of Crest Nicholson for two years and has also held senior finance positions in British American Tobacco, among others. Allen will be replacing Barbara Gibbs, who has been acting as interim CFO. Gibbs will resume her role as director of finance at the company.

4. IMF calls on SA to accelerate growth in key areas

In a report released on Monday, the International Monetary Fund called on South Africa to take swift action in implementing policies to drive economic growth and accelerate job creation. A number of reform processes and strategies were named by President Cyril Ramaphosa ahead of the elections that took place last month, but, the IMF says the ball needs to get rolling, to reignite the economy, while key institutions, like Eskom, will require “bold action to redefine its business model”.

Read: IMF urges SA to speed up reforms to boost growth

5. Shoprite halts buyback of deferred shares

Retailer Shoprite was meant to embark on an agreement to buy back deferred shares held by chairman Christo Wiese in an attempt to simplify the retailer’s voting structure and effectively reduce Wiese’s voting power and influence. However, the retailer announced on Monday that it had halted the deal as it did not receive enough support from shareholders. Reuters is reporting that Shoprite received written warnings from more than 15% of shareholders, saying they would not vote in favour of the resolution.

Read: Shoprite halts deal that would cut chairman’s voting influence

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