NATIONAL NEWS - Here’s what caught our attention on Wednesday:
It’s mini-budget day
South Africa is in store for one of the most crucial medium-term budget speeches ever on Wednesday. With South Africa’s economy lagging, the tax deficit widening, Eskom’s debt growing and a ratings downgrade from Moody’s looming, finance minster Tito Mboweni will have to sweet talk investors into believing in South Africa and for citizens to renew their confidence in the economy.
Eskom seeks to increase competition in turnaround
South Africa has yet another plan to rescue debt laden Eskom. On Tuesday, public enterprises minister Pravin Gordhan unveiled a policy paper which details the government’s plans to increase competition in the energy sector and reduce fuel costs.
The plan also details the timeline for Eskom’s unbundling into three units, namely generation, transmission and distribution, adding that it plans to complete the split around 2022. A new CEO for the utility is also expected to be announced next week, Gordhan said.
MTN Nigeria results
The Nigerian unit of MTN is reporting a 12.1% increase in service revenue to NGN854.9 billion and a 29% increase in earnings per share to N7.29 000 for the nine months ended September 30, 2019. The company’s Ebitda increased by 39.3% to N460.1 billion while mobile subscribers increased by 100 000 to 61.6 million for the period.
MTN Nigeria’s CEO Ferdi Moolman says the company’s performance is ‘very encouraging … despite a challenging operating environment’.
Edcon’s plans for recovery
The embattled owner of Edgars, Jet, CNA and others is looking to boost credit sales after Absa announced it would sell its Edcon store card debtors’ book to RCS. Edcon CEO Grant Pattison says the sale is part of a bigger agreement between RCS and Edcon to boost the retailer’s credit sales.
Moneyweb is reporting that Edcon’s debtor’s book is currently valued at around R4.5 billion after selling it to Absa for about R10 billion in 2012.
The rand weakened on Tuesday following the release of a policy paper on Eskom which outlined plans to rescue the entity that is buckled under R450 billion of debt. South Africa also saw the release of Q3 unemployment figures, which reached an 11-year high after increasing a notch to 29.1%.
The rand later held steady and trimmed previous losses. Investors are now keeping their eyes on finance minister Tito Mboweni’s medium-term budget speech, to be delivered on Wednesday afternoon.
Moody’s is also due to announce its rating decision on Friday.
The rand was at R14.65 to the dollar at 9:21.