Cape Times 2022-03-10

Siphelele Dludla siphelele.dludla@inl.co.za BUSINESS confidence in South Africa remained in contractionary territory despite slightly improving at the beginning of this year, buoyed by strong domestic sales and exports. However, Rand Merchant Bank (RMB) yesterday warned that business sentiment could well be dealt a blow by geopolitical tension in eastern Europe between Russia and Ukraine. The RMB/BER Business Confidence Index (BCI) increased to 46 points in the first quarter of 2022 after remaining unchanged at 43 points in the fourth quarter of 2021. This means that business confidence this quarter reached its highest level since the second quarter of 2021 before the July civil unrest. Although this is just below the neutral- 50 mark reached in the second half of last year, RMB said the latest reading was nonetheless…

Edward West edward.west@inl.co.za NEDBANK Group’s headline earnings per share (Heps) increased 115 percent in the year to December 31 due to lower impairments, a recovery in revenue and well managed expenses and further growth is anticipated in the new financial year, The past year’s Heps was, however, still 7 percent below 2019 levels. The 2021 results were supported by a better than expected economy at the start of the year, the low interest rate environment that drove retail credit demand, and higher levels of transactional activity post-Covid 19, chief executive Mike Brown said in a presentation yesterday. “We are on track to meet our medium-term target set for the end of 2023. We now expect to meet the diluted headline earnings per share target (greater than 2…

Siphelele Dludla siphelele.dludla@inl.co.za THE WORLD Bank has urged five Southern African countries, including South Africa, to put in policy frameworks to address the highly skewed distribution of productive assets, in a bid to reduce the persistently high inequality. South Africa, the largest country in the Southern African Customs Union (Sacu), is the most unequal country in the world, ranking first among 164 countries based on gini coefficients of income per capita. Released yesterday, the World Bank’s report assessing inequality in the region showed that disparities at birth were a crucial driver of inequality in the region. The report found that at least one-fifth of inequality in Sacu was explained by inherited circumstances such as location, gender, age and parental background. However, when race was included in the analysis the contribution…

Siphelele Dludla siphelele.dludla@inl.co.za SOUTH African-based platinum group metals (PGM) producers could be in for a big pay cheque this year as supply disruption of palladium from Russia has enhanced demand for the globally sought-after metal and shot up its prices. Paul Wilson, the chief executive of the World Platinum Investment Council (WPIC), said yesterday that early indications were that supply disruption of palladium from Russia might enhance platinum demand. (Platinum is denser and stronger than palladium.) “While global economic growth in 2021 surprised to the upside and was expected to stay strong in 2022, the consequences of the Russian invasion of Ukraine are difficult to predict at this juncture,” Wilson said, comment- ing as the WPIC yesterday released its Platinum Quarterly for the fourth quarter of 2021, with a full…

Edward West edward.west@inl.co.za MOMENTUM Metropolitan Holdings achieved really strong growth in its investment returns in the six months to December 31 due to firmer equity market returns generally and the growing success of its fintech-focused private equity investments, chief executive Hillie Meyer said yesterday. Momentum’s Investment returns increased to R740 million from R122m, and had compensated for net mortality losses of R378m, results released yesterday showed. Meyer said in a telephone interview that the group had invested R700m in two venture capital funds about seven years ago, one in the UK and one in South Africa. Each of these funds had invested in about 10 to 12 companies, and two to three of these companies in each of the funds were currently performing very well, he said. Consequently, some…

Sizwe Dlamini sizwe.dlamini@inl.co.za FORMER Judge Willem Heath’s Review Report of the Proceedings and Findings of the Public Investment Corporation (PIC) Commission of Inquiry reveals a scathing rebuttal of the Mpati Report findings on the valuation of AYO Technology Solutions, criticising the commission for relying on one former executive’s evidence. In the report, Heath highlighted that the Mpati Commission further noted that: “The valuation of AYO was based on a forward price-earnings multiple (P/E) of 16 times based on AYO’s estimated normalised earnings,” and that, “the premium paid by the PIC represents the additional value in the listed space and was based on the present value of future cash flows based on growth opportunities identified”. However, as Heath emphasises, when considering the statements and testimony of the PIC’s employees involved in…