Business & Finanz
Finweek - English

Finweek - English 29 August 2019

Finweek is South Africa’s leading financial weekly magazine focusing on investment. With its brisk, creative and authoritative analysis of business and investment issues, it’s an essential business tool in the daily battle for competitive advantage. Today's business decision-makers have to cope with increased pressure on their time and are expected, more than ever before, to succeed in the face of stiffer competition. Finweek provides relevant information in quick bytes, along with award-winning investment advice.

South Africa
Media 24 Ltd
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2 Min.
from the editor

a few weeks ago, I found myself standing in quite a longish queue at an ATM in the Botswana town of Serowe. It was a Friday afternoon, shortly after five, so I assumed that everyone in the queue was readying for Phuza Friday. There were three ATMs, but everyone queued at the last one. I assumed (once again) that the other two were out of order, and I made peace with the fact that I’d have to settle in for a long wait. But barely 30 seconds in, and a friendly security guard inside the bank knocked against the window and called me over. He asked if I was hoping to withdraw money. I told him that was indeed the case. Well, he said, then I’m standing in the wrong queue. The very long…

4 Min.
the real (and unaccounted) costs of coal power

on 25 July, the highest-ever temperature was recorded in Paris. The 42.6 °C measured comfortably beat the previous record of 40.4 °C of July 1947. The heatwave hit much of the rest of Europe too. Highest-ever temperatures were recorded in Germany, the Netherlands, UK and Norway during the last week of July. The extraordinary temperatures in Europe should come as no surprise to those who have followed scientists’ predictions about climate change. The rapid industrialisation inWestern Europe and North America since the mid-nineteenth century, and in most parts of the world since the mid-twentieth century, has made humans the main culprits in a warming world where temperatures are rising at an unprecedented rate. There are many consequences of a warmer planet. Nasa’s website mentions, to name a few, warming oceans, shrinking ice…

3 Min.
in brief

“THE PUBLIC DEBT TRAJECTORY IS NOT FAVOURABLE AND BECOMING UNCOMFORTABLE.” – Montfort Mlachila, senior representative for the International Monetary Fund (IMF) in SA, warned that the country’s public debt, approaching 60% of economic output, is becoming uncomfortable, reported Fin24. “SA has the highest level of debt in its history.” He attributed the ballooning debt-to-GDP to, among others, state capture, wherein “a lot of public investment was wasted or ineffective”. SA’s decline in growth “is dramatic for a country not facing civil war”, he said. Mlachila also laid speculation about a bailout to rest, confirming that no such request was made by SA. (Also see p.23.) “The mistake we made at the end of planning the new democracy was that we should have planned for the socioeconomic transformation of our country.” – Roelf Meyer,…

3 Min.
using big data to combat sa’s scourge of corruption

as a credit bureau TransUnion has access to a big consumer data universe. It holds a wealth of information on consumers – their payment profiles (affording the bureau an understanding of how financially distressed someone is), information on the ownership of assets such as vehicles and properties, including how much is still outstanding on them, and more. TransUnion essentially has a bird’s-eye view of the financial standing of the average South African consumer, making it uniquely placed to help with the fight against corruption with the rollout of its Lifestyle Assessment – a service that enables organisations to identify fraud and corruption indicators linked to employees and suppliers. TransUnion runs this service on employees and suppliers on behalf of organisations – sometimes not to find the rotten apple, but to also…

4 Min.
where will the yellow brick road lead?

no commodity in the world needs a health warning quite like gold. Just ask Gold Fields’ chief financial officer, Paul Schmidt, who earlier this year wrote forward sales contracts on a gold price assumption of $1 200 per ounce, and made similar local currency assumptions of some A$1 600/oz and roughly R555 000/kg for Australian and SA production respectively. The hedge book duly locked in a tidy $130m in pre-tax free cash flow. The problem is that the rand gold price is currently around R740 222/kg. At the time of closing its interim results on 30 June, Gold Fields registered a mark-to-market non-cash loss on its hedge book of $120m. “Gold Fields currently has about 50% of gold production hedged for 2019 and this morning states that 950 000 ounces of new hedging…

3 Min.
the case for harmony gold

There used to be a number of SA gold mining counters that ‘sold’ themselves, especially to US retail investors convinced the yellow metal was heading north of $2 000 per ounce on the basis of ‘leverage to the gold price’. Now there’s probably only one left: Harmony Gold. The share has doubled in price since May precisely on the back of an improved gold price. Analysts, however, still think there’s more room for Harmony to benefit from this dynamic. “Although Harmony’s shares have rallied, they have not re-rated,” said JP Morgan Cazenove in a note following Harmony Gold’s full-year results, released on 20 August. The stock was cheap compared to its international peer group, the bank said. There is an argument to be made for Harmony if you believe gold is still…