Here’s what caught our attention on Monday:
1. Prosus listing kicks off with a bang
Naspers spinoff Prosus’s debut listing on the Euronext in Amsterdam kicked off with a bang on Wednesday. The company listed at R1 238 a share and shares surged more than 25% during the first minutes of trading, valuing the company at more than $100 billion. Meanwhile Naspers shares fell by 30% during the course of the day.
In other Naspers news Moneyweb is reporting that CEO Bob Van Djik and CFO Basil Sgourdos will receive a total of up to $2.7 million and $2.1 million respectively in performance stock units which will vest in full after three years, if performance conditions are met, although the specifics of the conditions remain unclear.
2. Group Five shareholders give green light to business rescue plans
Group Five creditors have given the green light for the company to go ahead with business rescue plans for the listed entity as well as Group Five Construction. Moneyweb is reporting that rescue plans for both the entities are now adopted and binding. Accordingly, Group Five’s listing on the JSE will be terminated and the company will be wound up. The restructuring and sale of the business will also effectively save between 3 000 and 3 500 jobs, according to Moneyweb.
3. ARC results
African Rainbow Capital’s intrinsic net asset value increased by 2.4% to R9.34 per share for the year ended June 30, 2019. The company says this was below the medium- to long-term expectation of 16% per annum, mainly due to the economic environment. The company says the period was characterised by strained economic conditions, which negatively impacted most of the companies in its portfolio. It however added that its TymeBank and Rain portfolios are meeting their milestones, which is a fair value write-up of R640 million.
4. Mining production data due
South Africa’s mining production figures for July are due on Thursday. In June, mining production shrank 4.2% year-on-year, following a 5.1% decrease in the prior month. Output slowed significantly for gold, diamonds and platinum group metals. Positive contributions were recorded for manganese ore, other metallic minerals and other non-metallic minerals.
Update to follow.
5. Unsecured lending boom leaves millions in debt
About 7.8 million of the country’s 60 million residents have taken out a combined R225 billion of loans without collateral, according to a report by Differential Capital. This has resulted in 40% of these borrowers defaulting on their loan repayments and has left millions in debt. Bloomberg is reporting that South Africa eased control of unsecured lending in 2007 to boost financial inclusion but this led to a consumption-driven lending boom that has left the industry in tatters.