21 May 2013

Finance & Insurance

Cloaks without daggers?

Minister of State Security Siyabonga Cwele says that a solid case is being built against South Africans suspected of having links with terrorist groups such as Al-Shabaab; arrests can be expected soon. In passing, however, he also mentioned that the government wants to recruit more spies. That begs the question for some: what for? It also makes some people wonder... given the fact that we have an air force that cannot fly many of its aircraft, and an army that ... well ... hasn't fared too well recently, and a navy that has its subs up on blocks, will our budding 007s be properly trained and equipped to do the job? Or will it be a case of cloaks without daggers.

Durban says, "Yes, we iCANN!" and the city's exclusive internet namespace .durban is on its way after passing its first ICANN hurdle.

One wedding and a whitewash? Minister of Justice and Constitutional Development Jeff Radebe has said that the probe into the Waterkloof incident is to continue. However, a number of commentators believe that the so-called "probe" is little more than a whitewash to protect Jacob Zuma and an assortment of cabinet ministers, with officials taking the heat in their stead.

There's nothing like trying to get the message across... the WWF and TRAFFIC are targeting rhino horn consumers, particularly in Vietnam, as part of their global campaign against illegal wildlife trade. The bodies have developed a series of advertisements to discourage Vietnamese citizens from buying or consuming rhino horn.

Well, good luck and we hope it works, but in the meantime, efforts to stop the poaching must be stepped up, the kingpins be arrested and sentenced to rot in jail, and perhaps local communities around our game reserves be involved in some sort of system that rewards them for reporting suspect activities and people in their areas.

Rod Baker, Content Director

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Weekly top stories

A different inflation cycle
[David Crosoer] The South African Reserve Bank (SARB) expects CPI inflation to average 6.3% in the third quarter of 2013, before returning to the targeted 3% to 6% band in the fourth quarter. In the previous two inflation cycles (see chart below), the SARB started to increase interest rates when inflation exceeded 5%. Read more >>
Bad debts may hurt credit retailers
Safeguard against SARS penalties with a tax opinion
[Graeme Palmer]


Editorial news

Insurance
MMI licence changes approved
The High Court of South Africa in Pretoria has approved the amalgamation of the two main long-term insurance licences of the MMI Holdings. Read more >>

NHI is a reality says Motsoaledi
South Africans should stop wasting time opposing National Health Insurance (NHI)‚ Health Minister Aaron Motsoaledi said on Wednesday (15 May). Read more >>

Assurance complaints reach record level
The Office of the Ombudsman for Long-term Insurance received 9‚592 complaints against assurance companies in 2012‚ the highest ever and 4% more than in 2011‚ according to its latest annual report. Read more >>

Vehicle insurance, a risky business - Von Widdern
The combination of new technology with environmental and behavioural risk analysis appears set to redefine risk and the cost of insurance in the South African motor industry. Read more >>


Accounting & Auditing
SAX says it might make money this year
[Nicky Smith] State-owned regional carrier South African Express (SAX), which has made headlines over the past two years because of its chaotic finances, expects to break even this year after losing R187m in 2010 - the last audited accounts the troubled airline has been able to publish. Read more >>


Banking
Carry multiple currencies on Absa Cash Passport
Absa has launched a multi-currency Cash Passport that enables South Africans to carry multiple foreign currencies safely on just one card. Representing the future of travel prepaid cards; it allows cardholders to load multiple currencies on the same card with global reach of MasterCard, accessing 35.9 million locations worldwide. Read more >>


Credit Services
Bad debts may hurt credit retailers
Credit retailers' share prices came under varying degrees of pressure in the wake of African Bank's warning over soaring bad debts. This has brought into focus the potential of credit retailers being vulnerable to higher levels of bad debt among borrowers. Read more >>


Finance, Accounting & Banking
Retail sales rise marginally
[Ntsakisi Maswanganyi] The expected slowdown in retail sales in March was confirmed when Statistics SA (Stats SA) released its official figures on Wednesday (15 May). Read more >>


Investment Banking
Eskom becomes a farmer (of wind)
The National Energy Regulator of SA (Nersa) has granted Eskom a licence for its Sere wind farm in the Western Cape, the power parastatal said on Monday (20 May). Read more >>

Bricks and mortar for PIC's boss
The Public Invesment Corporation's (PIC) R62bn real estate portfolio, may be one of the most commanding jobs in the SA property sector. Read more >>

No cold frosties for Motsoaledi
A beer maker's plans to boost the sale of its product in Africa has left a sour taste in Health Minister Aaron Motsoaledi's mouth. Read more >>


Investment Management
Income from food, drinks up 9.4%
The total income generated by the food and beverages sector in SA increased in nominal terms (current prices) by 9.4% year-on-year (y/y) in March‚ Statistics SA (Stats SA) data showed on Monday (20 May). Read more >>

Competition intensifying for Vodacom
[Thabiso Mochiko] Vodacom aims to deliver low single digit service revenue growth and "mid to high single digit" growth in earnings before interest‚ tax‚ depreciation and amortisation in the next three years‚ the company said on Monday (20 May)‚ when releasing its annual results for the year to March. Read more >>

Oceana keen to 'hook' a big one
Perennially profitable fishing company Oceana could be angling for an offshore acquisition. Read more >>

Lesotho Highlands scheme gets the nod
[Linda Ensor] The R12bn phase two of the Lesotho Highlands Water Project (LHWP), which will secure a continued supply of water for SA and hydroelectric power for Lesotho, was approved in principle by the two countries this week. Read more >>

SA motor trade sales up 5.1%
Measured at current prices‚ South Africa's motor trade sales increased by 5.1% year-on-year in March according to data released by Statistics SA on Thursday (16 May). Read more >>

Broiler producers roasted by low margins
[Edward West] Sovereign Food Investments‚ which has operations in the struggling broiler industry‚ lifted headline earnings 10% to 74.5c per share for the year to February due to a more profitable product mix‚ good agricultural and production numbers and a focus on cost controls. Read more >>

Probe into medical costs welcomed
[Tamar Kahn] The chief executive of private hospital group Life Healthcare, Michael Flemming on Tuesday (14 May) gave a cautious welcome to the Competition Commission's looming investigation into private healthcare prices‚ saying his company would co-operate with the authorities. Read more >>

A different inflation cycle
[David Crosoer] The South African Reserve Bank (SARB) expects CPI inflation to average 6.3% in the third quarter of 2013, before returning to the targeted 3% to 6% band in the fourth quarter. In the previous two inflation cycles (see chart below), the SARB started to increase interest rates when inflation exceeded 5%. Read more >>

Warehouse profits reach R243,3m
[Zeenat Moorad] Holdsport‚ which owns the Sportsmans Warehouse and Outdoor Warehouse on Wednesday (15 May) said the current retail environment was challenging and the group did not envisage any improvement in its performance during the remainder of the year. Read more >>

Fines, payments choke Stefanutti Stocks
[Alistair Anderson] Construction company Stefanutti Stocks said on Tuesday (14 May) that late payments by debtors and a provision for a hefty fine for anti-competitive behaviour were to blame for the company reporting a record R162m loss for the year to February. Read more >>

Public Enterprises wins Treasury battle
[Nicky Smith] A six-month battle between the Treasury and the Department of Public Enterprises over the empowerment and local content weighting in Transnet's R35bn acquisition of new locomotives has ended with the Treasury agreeing to let the tender go unchanged. Read more >>

AngloGold's focus on cutting costs
[Allan Seccombe] AngloGold Ashanti is gearing up to sell a second mine as the company deepens its focus on delivering value to shareholders in a difficult gold market‚ new chief executive Srinivasan Venkatakrishnan said on Monday (13 May). Read more >>


Taxation
Time runs out for tax practitioners
With SARS' official recognition of controlling bodies being recently announced, the South African Institute for Tax Practitioners (SAIT) is red-flagging a potential bottleneck for registration as the 1 July deadline looms. Read more >>

Safeguard against SARS penalties with a tax opinion
[Graeme Palmer] The South African Revenue Services (SARS) may raise understatement penalties if prejudice has been caused to them or the fiscus. Penalties can be imposed at 25% or 50% in the case of a "substantial understatement". Read more >>


Venture Capital
Coface report highlights strain on SA's growth
The Coface Group, a worldwide leader in credit insurance, has released its latest report on South African growth prospects, taking into account the mining and export slumps. Overall, economic activity remains generally sluggish while upside risks to inflation have increased due to a weaker rand. Coface believes that this will persuade the Monetary Policy Committee to keep policy neutral over an extended period, with interest rates remaining unchanged for most of 2013. A reversal in policy easing is likely only late in the year or even in 2014. Read more >>


International
Cellphones let migrants send money home
BANGKOK, THAILAND: Asia's mobile revolution is set to transform the region's financial services sector, offering a cheap way for millions of migrant workers to send money home to their families, a report said on Monday (20 May). Read more >>

Yahoo! pays US$1.1bn for Tumblr
NEW YORK, USA: Yahoo! is to buy blogging platform Tumblr for US$1.1bn. It said on Monday (20 May) that the two companies "share a vision to make the Internet the ultimate creative canvas." Read more >>

Maersk profits, sales fall 33%
COPENHAGEN, DENMARK: Danish conglomerate A.P. Moeller-Maersk reported a drop in net profit and sales in the first quarter of 33% and blamed its performance on the sluggish economies in North America and Europe. Read more >>

Egyptians want to ban booze sales
CAIRO, EGYPT: Egypt's liquor stores are under growing pressure to stop selling alcohol, they say, but the pressure is not from the country's Islamist government, but from society itself. Read more >>

Glencore Xstrata axes Bond
ZURICH, SWITZERLAND - The chairman of newborn mining and commodities giant Glencore Xstrata, John Bond, was on Thursday (16 May) axed by its annual general meeting, just weeks after the Swiss-based group was created via a merger of two major mining companies. Read more >>

Google branded as 'evil' by lawmaker
LONDON - A senior British lawmaker on Thursday (16 May) described Google as "evil" and accused the US internet company of unethically avoiding paying vast amounts of tax in Britain. Read more >>

Sony urged to sell entertainment unit
TOKYO, JAPAN: Sony shares rose on Wednesday (15 May) after a US hedge fund called for the partial sell-off of its entertainment unit, in a rare bid by a major foreign shareholder to penetrate Japan's staid corporate culture. Read more >>

Bangladesh garment factories to close
DHAKA, BANGLADESH: Hundreds of Bangladeshi garment factories are to close indefinitely after worker unrest sparked by last month's collapse of a nine-storey building, the textile industry's main body said on Monday (13 May). Read more >>

More International...


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