Here’s what caught our attention on Wednesday:
1. Peregrine results
Asset management company, Peregrine Holdings says for the financial year ending March 31 2018, it was able to produce “reasonable results, despite the political uncertainty during the period”. The company is reporting a 7% increase in segmental earnings to R535 million or 248.0 cents per share. Segmental headline earnings relating to operating businesses is also up 6% to R362 million. Dividend for the period is up 10% to 170 cents per share. The company has also announced its intention to dispose of the securities business.
2. Steinhoff receives more creditor support
Steinhoff has won additional creditor support to help it restructure its business as well as its debts, totalling $11 billion. According to Reuters, Steinhoff announced on Tuesday that holders of 75%, 83% and 75% of three convertible bonds, totalling €2.7 billion agreed to a debt standstill agreement. This comes one week after it received creditor support letters.
3. Retail sales figures
South African retail sales rose 0.5% year-on-year in April after increasing by a revised 4.6% in March, the StatsSA showed on Wednesday.
4. IMF on South Africa’s outlook
The International Monetary Fund (IMF), speaking on South Africa’s outlook said fiscal consolidation is needed to strengthen public finances, saying that the downside to the nation’s outlook is ‘prominent’, citing the increased pressure on spending and the higher public wage bill. In addition, the IMF added that government needs to spell out land reform plans, as the land reform policy uncertainty may scare investors away, Bloomberg reported.
5. All roads lead to… nowhere
The construction of roads in South Africa is coming to a halt as members of the so-called “construction mafia” are violently demanding contracts. According to Moneyweb, this is based on their understanding of new Treasury regulations which stipulate that contractors should outsource 30% of their work to local sub-contractors. Sanral says existing projects have come to a standstill, some since August 2017, as staff and property are at risk. This is driving the engineers, contractors and suppliers to the brink of bankruptcy.