Here’s what caught our attention on Wednesday:
1. Old Mutual board asks not to be jailed
Old Mutual is pleading with the Johannesburg High Court to soften the blow to its board members if they are found to be in contempt of court. Old Mutual says the potential imprisonment of board members would be ‘excessive and inappropriate’. The pleas come after Old Mutual’s ousted CEO Peter Moyo filed a case to declare Old Mutual in contempt of court for defying a court ruling reinstating him as CEO. According to Moneyweb, board members will now have to argue in court why they should not be imprisoned for their actions.
2. Medupi and Kusile are bleeding SA dry
There are two power plants draining Eskom and South Africa’s finances. Medupi and Kusile were meant to be completed in 2015 at a total cost of R163.2 billion. However, the completion dates for the plants have been pushed back on numerous occasions and cost estimates have ballooned. The two power plants are among 11 others which were approved in 2007 and valued at more than R200 billion.
3. Sacci business confidence
The South African Chamber of Commerce and Industry will be releasing its business confidence index for September on Wednesday. In August, business confidence slumped to 89.1, the lowest recorded level since April 1985, on the back of South Africa’s weak economic growth, rising debt and high unemployment rate. In the August, seven of the thirteen sub-indices in the business confidence index deteriorated, the poorest being export volumes, the exchange rate weighted against major trading and investment currencies and the share price on the JSE.
Update to follow.
4. Tharisa results
Mining company Tharisa is reporting a quarterly operational improvement in the reef tonnes mined, up 8% to 1 248.2 kt and tonnes milled up 6.9% to 1 291.2 kt. It also highlights a recovery in platinum group metals and chrome. Tharisa CEO Phoevos Pourolis says during the year ended September 30, 2019 the company significantly reset its mining operations. The change lowered production levels but paved a clearer path for the company to deliver on its Vision 2020 strategy.
5. SA could be heading for junk
South Africa’s credit rating will be cut to junk when Moody’s Rating Agency announces its decision in November. This is according to the chief economist at Renaissance Global, Charles Robertson, who according to Bloomberg, has correctly predicted eight out of nine sovereign rating decisions in emerging Europe and the Middle East since May. South Africa’s poor growth, tough public finances and subdued commodity outlook are among the reasons he uses to strengthen his forecast.