IMF Sees Tough South Africa Budget Unless Fiscal Risk Sorted

IMF Sees Tough South Africa Budget Unless Fiscal Risk Sorted

JOHANNESBURG (Capital Markets in Africa) – South Africa will face more fiscal difficulties and higher financing costs should state-owned companies’ debt continue rising and if the nation’s local debt is downgraded to junk, the International Monetary Fund said. If state entities such as cash-strapped power utility Eskom Holdings SOC Ltd. and South African Airways request more state support, the government will have to step in to help, removing fiscal space for “more socially useful activities,” Montfort…

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Bonds Extend Rally Ahead of Linker Auction

Bonds Extend Rally Ahead of Linker Auction

JOHANNESBURG (Capital Markets in Africa) – South Africa’s 10-year government bonds rose for a fourth day, set for the longest winning streak in two months, ahead of National Treasury’s inflation-linked bond auction, scheduled later Friday. The rand weakened against the dollar, broadly in line with other emerging-market currencies. National Treasury plans to sell 900m rand ($63.4 million) across inflation-linked bonds maturing in 2029, 2033 and 2050. This is the first linker auction with an increased issuance size,…

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Investec First-Half Profit Climbs 21% as Funds Increase

Investec First-Half Profit Climbs 21% as Funds Increase

JOHANNESBURG Capital Markets in Africa) – Investec Plc, which owns a lender and money manager in South Africa and the U.K., said fiscal first-half profit rose 21 percent as funds under management increased, equity markets rose and the banking business increased lending. Net income climbed to 252.4 million pounds ($332 million) in the six months ended Sept. 30 from 208.6 million pounds a year earlier, the London- and Johannesburg-based lender said in a statement on Thursday. The dividend…

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South Africa Budget Head Resigns Amid Education-Funding Spat

South Africa Budget Head Resigns Amid Education-Funding Spat

JOHANNESBURG (Capital Markets in Africa) – The head of South Africa’s budget office, Michael Sachs, resigned amid speculation President Jacob Zuma is bypassing the National Treasury to implement plans for free university education. Sachs, who headed the office since November 2013, is the third senior Treasury official to leave since Zuma appointed Malusi Gigaba to replace Pravin Gordhanas finance minister in March. Sachs won’t be leaving immediately, “to ensure a proper handover to another senior official and to allow for…

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Factions Threaten South Africa’s ANC Leadership Conference Plans

Factions Threaten South Africa’s ANC Leadership Conference Plans

JOHANNESBURG (Capital Markets in Africa) – South Africa’s ruling party is battling to calm internal divisions that are threatening to disrupt preparations for its national conference next month as factions engage in a bitter fight over who will replace President Jacob Zuma as its leader. The African National Congress’s National Executive Committee decided on Monday to confirm the leadership of the Eastern Cape province after a disputed conference in that region in September, according to two…

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As Leadership Vote Looms, Four Scenarios for South Africa’s ANC

As Leadership Vote Looms, Four Scenarios for South Africa’s ANC

JOHANNESBURG (Capital Markets in Africa) – South Africa’s ruling African National Congress is due to elect a new leader next month and the race is proving to be one of the most hotly contested and divisive in the 105-year-old party’s history. The front-runners to succeed President Jacob Zuma are his deputy Cyril Ramaphosa and Nkosazana Dlamini-Zuma, Zuma’s ex-wife and the former chairwoman of the African Union Commission, with ANC Treasurer-General Zweli Mkhize seen as a possible compromise candidate. While it remains guesswork who’ll…

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Want to Know What Investors See for the Rand? Follow This Stock

Want to Know What Investors See for the Rand? Follow This Stock

JOHANNESBURG (Capital Markets in Africa) – If you want to know what investors are thinking about prospects for South Africa’s rand as the ruling African National Congress’ leadership battle unfolds, look no further than Cie Financiere Richemont SA’s Johannesburg share price. The company has the highest correlation to movements in the rand among stocks in the FTSE/JSE Africa Top 40 Index of South Africa’s biggest listed companies, according to data compiled by Bloomberg. The correlation this month rose…

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