Here’s what caught our attention on Tuesday:
1. Old Mutual terminates Peter Moyo’s employment
Old Mutual announced via Sens on Tuesday that it has terminated the employment of suspended CEO, Peter Moyo, citing a conflict of interest with the NMT group of companies, which he helped found.
According to Old Mutual’s statement, concerns emerged around Moyo’s conduct in relation to his conflict of interest, when the company requested a report on his related party transactions.
Reuters is reporting that while Moyo’s interest in NMT Capital was declared and protocols were put in place to manage it, the two payments made by the firm in 2018, totalling R115 million, were a breach of its rights as a preference shareholder.
2. Alexander Forbes results
Financial services company, Alexander Forbes says it experienced difficult internal trading conditions during the year ended March 31, 2019, after the departure of the former CEO, Andrew Darfoor and members of the executive, which the company says brought closure and surfaced a need to review the company’s strategy.
Alexander Forbes says it is now able to focus on its core businesses of consulting, administration and investments, after exiting its insurance business. Headline earnings per share decreased by 1% to 44.0 cents, while operating income for the total group increased by 6% to R3 863 million, during the period. A final dividend of 12 cents per share and special dividend of 30 cents per share has been declared.
3. Schroders European Reit results
European based, Schroders Reit, is reporting a 0.4% increase in net asset value of €182.8 million or 136.7 cents per share for the six months ended March 31, 2019. The company’s profit for the period amounted to €3.2 million and a total dividend of 3.7 cents per share was declared, in line with the target of 5.5% annualised yield against the euro IPO issue price, the company says.
Schroder’s chairman, Julian Berney says the company was able to improve its long-term income profile and increase its exposure to higher growth regions and sectors during the period under review.
Schroders reit’s fund manager added that the company’s exposure to European markets has been rewarding, as the recent French logistics acquisition proves, while the majority of European real estate markets, including those in, Berlin, Frankfurt, Hamburg, Stuttagart and Paris, have been performing well.
4. GEPF considering reducing its stake in Naspers
The Government Employees Pension Fund is considering reducing its shareholding of about 16% in media giant Naspers, worth R245 billion. The GEPF is Naspers’s biggest shareholder and is being encouraged by the PIC to reconsider its stake, reportedly because it is concerned the pension fund is overexposed. Naspers is one of the biggest companies on the local bourse and its growth is mostly attributed to the success of Chinese gaming developer Tencent, after its early investment in the company.
Bloomberg is reporting that Naspers currently makes up almost 21% of the value of the GEPF’s listed equity holdings.
5. The week ahead and rand update
President Cyril Ramaphosa is due to deliver his first state of the nation address of the sixth democratic parliament on Thursday, June 20, under the theme, ‘Let’s grow South Africa together as we celebrate 25 years of democracy’.
South Africa’s core inflation rate for May is also due in the week ahead.
Over the long weekend, the rand held steady after strengthening against the greenback on Friday. In the US, the Federal Reserve’s policy announcement is due on Wednesday.
The rand was stead this morning, trading at R14.78/$ at 9:00 am.