Bank takes a big bite out of Discovery’s profits

Discovery’s interim operating profit took a knock as the company invested in several new initiatives, including the long-awaited Discovery Bank scheduled for public rollout next month. The financial services giant saw normalised profit from operations decrease by 4% to R3.79 billion, while headline earnings fell 18% to R2.25 billion and normalised headline earnings dropped 16% to R2.37 billion. By the end of December 2018, R6 billion had been invested in the bank. This comprised R3.28 billion paid to FirstRand Group, R1.31 billion regulatory capital invested in the bank, and R1.42 billion…

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Oil price hits Comair’s interims

A spike in the oil price in October last year impacted Comair’s results for the six months ended December 31, but the fundamental business performed in line with the previous year and Comair has maintained its record of 72 years of profitability, CEO Erik Venter said on Tuesday. Comair operates the low-cost brand Kulula as well as the British Airways brand in the local market. Comair’s share price dropped marginally on the day and closed at R5.74. It is still more than 20% up over the last seven days, thanks…

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Funders are talking to SAA again – Jarana

South African Airways has started negotiating with lenders to extend its R9.2 billion in loans that mature on March 31. The airline hopes the progress it has made with its long-term plan to turn the struggling company around will be enough to convince lenders to extend the loans by four to five years, chief financial officer Deon Fredericks told Moneyweb on Monday at a media roundtable. This is ‘old debt’ that lenders earlier converted to short-term debt due to concerns about the continued existence of the airline, he said. Read:…

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Local CIS industry quietly supporting government

South Africa’s collective investment scheme industry did not panic in January when the ANC said in its election manifesto that it may investigate the introduction of prescribed assets in financial institutions’ funds in order to open resources for investments in social and economic development. But they certainly pricked up their ears. Many in the industry remember prescribed assets under the National Party government where pension funds were forced to invest an average of 55% of their assets in state-owned enterprises (SOEs) – including Sasol, Iscor and various homeland development corporations…

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Audit firms up in arms over Irba’s possible search and seizure powers

SA’s biggest audit firms are riled by amendments to legislation that could give the Independent Regulatory Board for Auditors (Irba) more teeth in the form of search and seizure powers during its investigations into financial reporting failures. If proposed amendments to the Auditing Profession Act by National Treasury pass muster in parliament, they will give the audit watchdog the power to search the premises of auditors and seize documents in the course of conducting its investigations. Irba’s investigating committee would be able to enter the premises of auditors without prior consent or…

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The bear and bull case for MultiChoice

Ahead of its unbundling from parent Naspers and separate listing on the JSE, the bear case for MultiChoice is fairly well understood – and perhaps even accepted – by the market. It goes something like this: subscribers are abandoning pay-TV in droves for services such as (and primarily) Netflix. The conjecture is that the business is in decline, or at the very least ex-growth, and will become a prodigious generator of cash, and not much more. The reality, as always, is a lot more nuanced. DStv’s core business is not…

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Business Unity South Africa keen to restore SA manufacturing

Hosting its inaugural Business Economic Indaba, Business Unity South Africa (Busa) has unveiled vital areas for partnership with the government that includes equipping people with the means to earn a living, developing ideas to up research & development investment, building the right infrastructure and improving South Africa’s ease of doing business. The indaba, which was conceived in late 2018, brought government and business together to  discuss how to build a partnership that would help drive inclusive growth and transformation. Inevitably topics under discussion included the governance challenges in state-owned entities (SOEs), the…

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What is the future of money?

The growth of the digital economy has already distorted many industries, from media to transportation, just as technology has changed the face of payment systems. Next in line? Money itself. Currencies have taken on many shapes and sizes over the past seven centuries – from the Yapese who used 12-feet stone wheels called rai when executing exchanges, to the famous ‘gold standard’. However, ask any monetary economist when the tide changed for money as we know it and they will say August 15, 1971. A historic day indeed when then US…

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Eleven power station units out of action due to Eskom financial woes

Eskom has shut down 11 power station units due for major maintenance because it lacks the funds to fix them up. This comes as the embattled power utility struggles to find coal to feed its coal-fired power stations – the bulk of its fleet. Moneyweb earlier reported that 11 of Eskom’s 15 coal-fired power stations have less than the required 20 days’ coal stock – and of those, five have less than 10 days’ stock. The power stations that do have adequate supply are being run extremely hard, which could…

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‘Capping fuel price could sink industry transformation’

Capping the price of 93 octane unleaded petrol (ULP93) will kill new entrants in the fuel retail sector and has little potential to benefit consumers. If government really wants to make a difference, it should rather target the margin of oil companies or the fat chunk of taxes and levies government itself has piled onto fuel prices. This is the warning issued by Sbonelo Mbatha and Mark Harper, co-founders of PetroConnect, a company that assists new entrants to purchase and run filling stations through among other things their PetroConnect Academy. Read: From…

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