Press review: South-African economic news from September 15th to September 26th

Here is a short summary of the major economic news of the past two weeks in Southern Africa.

The Cap40 team regularly publishes news from the French consulate in Pretoria in order to give you fresh insights on the most important economic matters in the country and region.

 

Banking group FirstRand reaps high profits and strengthens its international presence.

The financial results of the second largest South African banking group reveal a 21% increase in their profits. This increase in profitability is particularly due to the good performance of its subsidiaries Rand Merchant Bank and First National Bank.

FirstRand noted that they had constituted a R10 billion reserve in order to finance their international development strategy, particularly in Nigeria and Ghana. FirstRand is already present in Botswana and Zambia, its international activities now accounting for 10% of the group’s profits.

 

Old Mutual Asset Management to launch an Initial Public Offering (IPO) in the US.

Africa’s first insurance company’s US-based asset management company will issue up to 22 million shares for a price ranging between $15 and $17 on the New York Stock Exchange. This operation will enable the American subsidiary of Old Mutual to raise up to $374 million. This IPO is the second one attempted by Old Mutual, the first attempt having failed due to the 2008 financial crisis.    

 

The French company Kusmi Tea has opened its first store in South Africa.

Currently experiencing a significant growth, the French medium size company Kusmi Tea has opened its first store in Johannesburg thanks to a partnership with the South African brand The Tea Merchant.

 

The South African Treasury announces a financial package in favour of Eskom.

At a special meeting in Cape Town, the government approved an intervention plan including an equity injection and an increase of the debt ceiling guaranteed by the government. This package aims at improving Eskom’s balance sheet and reducing the public company’s cost of debt.

Eskom has been facing critical financial difficulties for three year, mainly imputable to the belated delivery of the new Kusile and Medupi coal-fired power plants, and the very high cost of the oil-fired generating plants used as an alternative to Kusile and Medupi to face power consumption peaks.

Following the announcement made by the treasury, the rating agency Standard & Poor’s delayed Eskom’s credit rating decision. Eskom had been placed under “CreditWatch Negative” in June, meaning it had a 50% chance of being downgraded to junk 90 days later. Standard & Poor’s noted that they were awaiting further details on the Treasury’s financial package to make a decision on Eskom’s credit rating.   

 

Hyundai opens a new assembling plant in South Africa.

The South-Korean multinational opened a commercial vehicle assembly plant in Benoni, Gauteng, in order to increase its presence on the South African commercial vehicle market. Hyundai currently owns a 3% market share on medium-sized commercial vehicles. This investment forms part of a wider multi-million rand investment plan aiming at increasing Hyundai’s presence on the South African market, and to subsequently export to Sub-Saharan Africa.

 

China and South Africa to partner for the development of steel production in South Africa.

The Chinese manufacturer Hebei Iron & Steel, the South African Industrial Development Corporation and the Chinese bank CADFund have signed a protocol for a feasibility study regarding a steel production unit in Limpopo. If the conclusions of the study are positive, the construction of the Chinese-owned plant will be launched in 2015 and production start in 2017.

The project is estimated to cost $4.5 billion, partly financed by CADFund.    

 

South Africa and Russia to sign a cooperation agreement for nuclear energy.

The 58th International Atomic Energy Agency conference in Vienna enabled South Africa and Russia to sign an unprecedented intergovernmental agreement regarding the future cooperation between the two countries for the development of nuclear energy in South Africa.

A similar agreement could be signed with France in the near future in order to secure the supply of 9,600 MW nuclear generating capacities to South Africa by 2030.

 

Vodacom to invest massively in optic fibre for professionals.  

The South African internet access provider will invest R1 billion per year in its “Fibre To The Business” programme. Vodacom will in addition acquire the Indian internet access provider Neotel, second operator on the South African landline market, for an amount of R7 billion, therefore adding 22,000 km of fibre to its existing network. Vodacom aims at equipping 5,000 businesses with optic fibre for a speed of 100Mbits/sec.

This investment aims among other objectives at competing with Orange Business Service’s optic fibre offer to corporate clients.    

 

New oil reserves discovered offshore in Angola by ENI.

The Italian multinational announced it had discovered an estimated 300 million barrels deposit 150 kilometers off the coast of Angola, in the exploration block 15/06. The discovery was made less than 10 kilometers away from the Ngoma FPSO, the multimodal platform inaugurated in July 2014 and forming part of the West Hub project.

The closeness to Ngoma’s platform should enable ENI to start producing by the end of 2014, a record time in the industry.

 

The Maputo Development Port Company (MDPC) will invest $3 billion in infrastructure development.

The joint venture between the Mozambican public company CFM, the South African group Grindrod, the Emirati company DP World and the Mozambican group Gesores will invest in new infrastructures in order to increase the capacity of the port’s coal terminal from the current 17 million tons in 2013 to 40 million tons by 2020.

CFM will simultaneously invest $2 billion in railway infrastructure upgrade and purchase of new locomotives in order to shift the transportation of the port’s freight from road to rail.

 

French company Technip to partner with Mozambican companies and universities.    

The energy and industry engineering and construction company Technip signed three long term training and technology transfer agreements in Mozambique. The first agreement relates to the training of Mozambican students and engineers to underwater technologies in partnership with the public Mozambican group ENH. The second agreement with the Eduardo Mondlane University concerns the training of students to natural gas project development. The last one involves Technip in the launch of an engineering training centre in partnership with ENH Logistic.     

Views: 83

Comment

You need to be a member of Le Cap40 to add comments!

Join Le Cap40

© 2019   Developed by Methys   Powered by

Badges  |  Report an Issue  |  Terms of Service