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Finweek - English

Finweek - English 04/23/2021

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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.

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South Africa
Media 24 Ltd
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25 Issues

in this issue

3 min.
from the editor

local government is supposed to be the foundation of service delivery to individuals and businesses. This is the first point of contact for residents in the country with the other party to the social contract. However, it is normally very frustrating trying to do business with municipal officials – often staffed by cadres or family members of the ruling party. Consider, for example, the dysfunctional municipalities in the North West, Free State, Mpumalanga, Northern Cape, Eastern Cape and Limpopo provinces where the party, which is honouring its part of the social contract, by paying for services and taxes, has had quite enough. To make matters worse, the Auditor-General reports year after year on the maladministration of municipalities. Remember when former Auditor-General, Kimi Makwetu, could not sound more desparate as he pointed…

5 min.
the future of the stock market

in 2018, Hank Bessembinder, professor of business at Arizona State University, published a paper in the Journal of Financial Economics with the rather nonsensical question: Do stocks outperform Treasury bills? It seems nonsensical because, from 1926 to 2016, the approximately 25 300 companies listed on US stock exchanges, created $35tr in net wealth for its shareholders, in other words, $35tr more than what investors would have earned on US Treasury bills. But here’s the catch: All that net wealth was created by the top 1 092 companies, or 4% of the total, which means the remaining 96% of listed companies “collectively generated lifetime dollar gains that matched gains on one-month Treasury bills”. One might easily conclude from this research that it is vitally important to pick the right stocks. But that…

5 min.
who will survive the race spat?

i am not a fortune teller, but I can smell from miles away the different approaches that black business lobby groups are taking in the matter of racism allegations against Eskom’s CEO André de Ruyter, who is under pressure to step down barely two years into his tenure to turn around the ailing electricity producer. The Black Management Forum (BMF) has been leading calls for De Ruyter to be suspended after it said it had received several complaints of racism and abuse of power from employees of the state-owned power generator and its suppliers. Curiously, the other two powerful lobby groups, the Black Business Council (BBC) and the National African Federated Chamber of Commerce and Industry (NAFCOC), have been silent on the matter, preferring to shy away from public involvement in the…

3 min.
in brief

“30 DAYS TO VOLUNTARILY STEP ASIDE OR BE SUSPENDED.” – President Cyril Ramaphosa announced that the ANC leaders and members charged with corruption and wrongdoing, including secretary-general Ace Magashule, have 30 days to voluntarily step aside or be suspended in terms of rule 25.7 of the ruling party’s constitution. Ramaphosa made the announcement after a late night session of the National Executive Committee. The implementation of the rule means Magashule, who is facing corruption charges, will have to step aside by the end of April. “We’re at a place where the economy’s about to start growing much more quickly.” —Federal reserve chairman Jerome Powell said the world’s largest economy (US) appears to be at an inflection point, with output and job growth poised to accelerate in the months ahead if the Covid-19 pandemic…

2 min.
double take

THE GOOD In its Quarterly Bulletin, the South African Reserve Bank said SA recorded foreign direct investment inflows of R16bn ($1.07bn) in the fourth quarter of 2020 from outflows of R12.2bn in the third. It said that the inflows in the latest quarter were caused by non-resident parent entities increasing equity investments and granting loans to domestic subsidiaries. Reuters reported that the country saw FDI inflows of R51.1bn for all 2020, down from R74bn in 2019. Portfolio investments, reflecting a record of buying and selling of securities, such as bonds and shares, recorded inflows of R24.1bn in the October-December quarter compared with R39.5bn the preceding three-month period. THE BAD As at 8 April 2021, global confirmed Covid-19 cases were reported at 134m, with 2.9m deaths and 108m recoveries. Cases have increased rapidly in…

2 min.
grisly year for gemfields

One means by which the diamond industry has coped with restrictions on international travel is to route sales of unpolished goods through online auctions, partly assisted by the mechanised way in which diamonds are now able to be valued. However, that is not an option for emeralds and rubies, the coloured gemstones that are mined and marketed by JSE-listed Gemfields, a company that barely escaped the last 12 months with its corporate shirt attached. The company reported a net loss of R1.4bn for the 12 months ended December. Compared with the previous year’s R566m profit, that’s a reversal in fortune year-on-year of roughly R2bn. The performance support the remark by CEO Sean Gilbertson in an earlier trading statement that the company had endured a “grisly” year in 2020. Gilbertson says the resumption of…