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South African rand edged lower early on Wednesday as investors dumped risky assets for safer investments after a key advocate for free trade in the White House resigned, fanning fears U.S. President Donald Trump would go ahead with tariffs and risk a trade war.

At 0645 GMT, the rand traded at 11.7950 per dollar, 0.11 percent weaker than its overnight close of 11.7825. The currency earlier hit a session low of 11.8575.

Dealers feared the departure of White House economic adviser Gary Cohn, a former Wall Street banker, would embolden protectionist forces in the U.S. administration as Trump tries to impose hefty tariffs on steel and aluminium.

“Currency markets don’t seem to like” the possibility of a global trade war, Nedbank analysts wrote in a note.

Stocks were set to open lower at 0700 GMT, with the JSE securities exchange’s Top-40 futures index down 0.81 percent.

In fixed income, the yield for the benchmark government bond due in 2026 was down one basis points to 8.1 percent.

Reporting by Olivia Kumwenda-Mtambo; Editing by Amrutha Gayathri (Reuters)

South Africa’s insurer MMI Holdings reported a 2.6 percent fall in half-year earnings on Wednesday and said it would start buying back some of its shares instead of paying dividends.

MMI, which sells life and short term insurance, said diluted core headline earnings per share (HEPS) for the six months to end-December came in at 97 cents from 99.6 cents in 2016.

HEPS is the main profit gauge in South Africa, which strips out certain one-off items.

“This was largely due to weaker persistency in Metropolitan Retail, weaker profitability in both new generation and legacy life products at Momentum Retail, and an increase in MMI’s share of losses, in line with business plans on new initiatives such as the India joint venture,” the firm said in a statement.

Persistency refers to the volume of business that a life insurance company is able to retain.

Operating profit after new initiatives rose 4 percent to 1.31 billion rand ($110.79 million) from 1.26 billion rand.

MMI, which recently underwent a management shake-up, said it will set aside 2 billion rand for a share buy-back in the next 12 months.

“Given the current discount to embedded value, we are of the opinion that a share buy-back is the most efficient use of capital and will enhance value to shareholders,” said MMI’s Financial Director, Risto Ketola.

The group also updated its dividend policy to target a dividend cover centred at 2.5x core headline earnings from a cover range of 1.5x to 1.7x previously.

($1 = 11.8237 rand)

Reporting by Nqobile Dludla; Editing by Joe Brock (Reuters)

South Africa said on Monday producers of cold meat products were to blame for delays in tracing the cause of the world’s worst listeria outbreak, which has killed 180 people in the past year.

As shoppers queued up to return processed meat items and demand refunds, shares in the biggest food firm in Africa’s most industrialised economy, Tiger Brands, tumbled because of its link to the outbreak that has spread since January 2017.

The government, which has been criticised for taking too long to find the cause, had on Sunday linked the outbreak to a meat product known as “polony” made by Tiger’s Enterprise Food.

It also said it was investigating a plant owned by RCL Foods that makes a similar product, whose shares also slid on Monday before recovering.

Both companies, which say they are cooperating with the authorities, suspended processed meat production at their plants after health authorities ordered a recall of cold meats associated with the outbreak from outlets at home and abroad.

The U.N. World Health Organization called the outbreak the largest ever recorded globally, after 948 cases were reported since January 2017. Listeria causes flu-like symptoms, nausea, diarrhoea and infection of the blood stream and brain.

South Africa’s Health Ministry said the source was found after pre-school children fell ill from eating polony products traced to processed meat producers.

“The meat processing industry was not cooperating for months. They did not bring the samples as requested. We had long suspected that listeria can be found in these products,” the ministry’s communications director, Popo Maja, told Reuters.

“It is not that we are incompetent, or that we have inadequate resources,” Maja said when asked why it had taken more than a year to find the cause of listeria.

He said all firms in the industry were being examined.

South Africa’s processed meat market grew about 8 percent in 2017 to a retail value of $412 million, according to Euromonitor International. Tiger Brands has a 35.7 percent market share, followed by Eskort Bacon Co-Operative with 21.8 percent. Rhodes Food, RCL Foods and Astral Foods each have less than 5 percent.

Tiger Brands, Eskort, RCL Foods, Rhodes and Astral said they had complied with all requests from the health authorities.

Lawrence McDougall, the CEO of Tiger Brands, said there was no direct link between the deaths and its cold meat products. “We are unaware of any direct link,” he told a media briefing.

Health Minister Aaron Motsoaledi had said on Sunday the outbreak had been traced to a Tiger Brands factory in the northern city of Polokwane.

The authorities are also examining a second Tiger Brands factory and have not said when they could conclude tests on RCL Foods, which has a plant under investigation.

Rhodes said it produced processed canned meat, different from the cold processed meat made by rivals. Astral said it produced fresh and frozen chicken, not polonies and items linked to the outbreak. Both those firms said their products were safe.

Fast food chain owner Famous Brands said it was recalling ready-to-eat meat products from its retail outlets.

CLEANING FRENZY
The minister told South Africans not to consume any ready-to-eat processed meat due to the risk of cross-contamination.

The announcement prompted a frenzied clearing and cleaning of the shelves by local supermarkets chains Shoprite, Pick n Pay, Spar and Woolworths, which also urged consumers to return the meats for refunds.

Neighbouring states acted swiftly. Zambia banned imports of South African processed meat, dairy products, vegetables and fruit. Mozambique and Namibia halted imports of the processed meat items and Botswana said it was recalling them. Malawi stepped up screening of South African food imports.

Shares in Tiger Brands sank as much as 13 percent, before recouping some losses to close 7.4 percent lower at 393.38 rand. RCL Foods fell more than 6 percent but later recovered to trade down just 0.5 percent at 17.11 rand.

Dozens of customers lined up outside a Tiger Brands outlet with bags of cold meat products and demanding their money back.

“I lost trust with Enterprise. I’ll be scared even if they say this problem is solved. I would rather go back to peanut butter and jam,” said call centre agent Tshepo Makhura, 37.

Deline Smith, a 57-year-old housewife with three full bags, said: “I hope my grandchildren are going to be okay because we gave them food over the weekend from these parcels.”

Analysts said profits at the two firms were unlikely to be hit hard. Standard Bank analyst Sumil Seeraj estimated the recall would cut operating profit at Tiger Brand’s value added foods division by 6 percent at most.

“The big hit is going to come with inventory write-offs because they are recalling all these products. That’s most likely where they will lose because the inventory write-off will affect operating profit from that division,” Seeraj said.

The Enterprise unit of Tiger Brands had “a very strong brand in meat”, he said, adding: “In the short term consumers will switch to other forms of protein.”

Additional reporting by Tiisetso Motsoeneng, Nqobile Dludla and Mfuneko Toyana in Johannesburg and Chris Mfula in Lusaka and Manuel Mucari in Maputo and Nyasha Nyaungwa in Windhoek and Frank Phiri in Blantyre and Martinne Geller in London; Writing by James Macharia; Editing by Edmund Blair (Reuters) 

While a number of Turkish businesses have expressed desire to enter the West Africa market, they see elaborate procedures involved in doing business in the sub-region as a major disincentive to foreign investment.

This is in addition to lack of credit facilities for such foreign business owners who venture into the sub-region to do business, the Chairman of the Turkish Exporters Assembly (TIM) Mr. Mehmet Büyükekşi stated in an interview.

Many businesses, he said, are willing to invest in areas like healthcare, extractives, construction, textiles and energy, given their vast expertise and the business potentials that exist in the sub-region, but they are constrained by these setbacks.

These challenges will have to be addressed immediately if the sub-region is to become a preferred destination for trade and investment.

He therefore emphasised the importance of the platform created by the government of Turkey and ECOWAS Commission – the Turkey-ECOWAS Business and Economic Forum.

It was organised by the Ministry of Economy and Foreign Economic Relations Board (DEIK) of Turkey, and brought together over 500 businesses from West Africa and Turkey – with a strong delegation from ECOWAS member-states led by the ECOWAS Commissioner for Industry and Private Sector Promotion, Kalilou Traore.

President of the Foreign Economic Relations Board (DEIK) Mr. Nail Olpak, speaking in an interview at the event, said businesses from the ECOWAS region are welcome to operate in Turkey, in response to some claims of uneven trade balance for African businesses.

But toward the end of meetings between ECOWAS ministers and the Turkish authorities, a trade and investment cooperation agreement was reached with the Republic of Turkey as part of efforts to deepen economic cooperation between members of the sub-regional body and Turkey.

The agreement was said to signal commitment toward institutionalising relations between Turkey and the ECOWAS Commission.

Also, the Turkish government committed to increase its trade volume in Africa to US$50billion within a ten-year time frame.

It also projected doubling its trade volume in the ECOWAS region alone to US$5billion in the interim, and US$10billion by the mid-term.

Ghana’s exports to Turkey alone yielded a about US$180.4million in 2016, which is a significant improvement over the previous year’s turnover of about US$168million. thebftonline.com

Turkey, on the other hand, raked in close to US$298.5million within the period, as it is 9th among the leading countries Ghana imports from.

Ghana, conversely, is ranked 20th on Turkey’s global list of import countries. (thebftonline.com)

African mobile towers operator Helios Towers plans to list on the London Stock Exchange in early April, it said on Friday, with an expected valuation of about 2 billion pounds ($2.75 billion).

Helios is the third African mobile towers business scheduled to float in 2018, with IHS Towers and Eaton Towers also preparing for listings to fund infrastructure investment as economic growth in Africa drives increased use of smartphones and demand for data.

“The demographics and growth prospects of the countries we serve are compelling and, with our well invested towers base, we can continue to meet the needs of mobile network operators,” said CEO Kash Pandya, adding that this will boost margins and top-line growth.

The company, which raised $600 million through a bond issue last year, also filed for a secondary listing on the Johannesburg Stock Exchange (JSE).

Helios Towers owns about 6,600 telecoms towers in Ghana, Tanzania, Congo Brazzaville and the Democratic Republic of Congo.

It is owned by telecoms companies Millicom and Bharti Airtel and hedge funds including Soros Fund Management and Rothschild Investment Trust Capital Partners.

In 2017 it reported core profit of $146 million on revenue of $345 million, with net debt up 57 percent at $595.2 million.
($1 = 0.7261 pounds)

Reporting by Clara Denina; Editing by David Goodman London (Reuters)

French energy company Total said it acquired a 16.33 percent stake in Libya’s Waha concessions from Marathon Petroleum in a $450 million transaction.
Waha Oil Company is a subsidiary of Libya’s state-owned National Oil Corp (NOC) and currently produces 300,000 barrels of oil equivalent per day (boe/d). That is expected to rise to 400,000 boe/d by the end of the decade, Total said.

“This acquisition is in line with Total’s strategy to reinforce its portfolio with high quality and low-technical cost assets whilst bolstering our historic strength in the Middle East and North Africa region,” Total CEO Patrick Pouyanne said.

Other Waha stakeholders include NOC with 59.18 percent, ConocoPhillips with 16.33 percent and Hess with 8.16 percent.

Total’s share of Libyan production stood at 31,500 boe/d in 2017 from its concessions in the offshore Al Jurf field and the onshore Sharara field.

Reporting by Ahmad Ghaddar; editing by Jason Neely (Reuters)

 

Barclays Africa Group, South Africa’s No.2 lender by market value, reported a 4 percent rise in annual profit on Thursday, thanks to a substantial decline in impairments. Normalised diluted headline EPS, the primary measure of profit in South Africa that strips out one-off items, came in at 1,837.7 cents in the year ended December compared with 1,769.4 a year earlier.
Net interest income, an important gauge of lending profitability, inched up 1 percent to 42.32 billion rand, while net interest margin was unchanged at 4.95 percent.

Credit impairments fell 20 percent to 7.0 billion rand, Barclays Africa said. Credit impairments occur when there has been a deterioration in the creditworthiness of an individual or entity.

Growth in the United States was the positive surprise in the second half, even as Euro area, Japan and China grew at or above consensus, Barclays Africa said.

This more than made up for slow economic expansion in larger markets that account for about 80 percent of the group’s income, including South Africa.

Barclays Africa, along with rivals, has struggled to increase lending as slowing economic growth in many African markets tempers demand from corporate clients and rising interest rates at home hit consumption by retail customers.

But the election earlier this month of Cyril Ramaphosa as president, pledging to revitalise the economy, has boosted confidence.

Barclays Africa said it expected growth in loans and deposits to improve in 2018 and forecast stronger loan growth at constant currency from the rest of Africa. It also expected stronger loan growth in corporate and investment banking than in retail banking in South Africa.

The group also forecast modest improvement in gross domestic product for South Africa to 1.4 percent in 2018. (Reuters)

Oil production for Angola, Africa’s No. 2 crude producer, averaged 1.632 million barrels per day in 2017, down from 1.72 million barrels the previous year, the chairman of the state-run oil company Sonangol said on Wednesday.
Angola has been grappling with the effects of generally depressed oil prices on its government finances but is constrained from lifting production because it is committed to OPEC-mandated cuts.

Angola is a member of the Organization of the Petroleum Exporting Countries, and it must limit output in line with OPEC’s commitment to cut output by about 1.2 million barrels per day (bpd) as part of a deal with Russia and others.

Sonagol chairman Carlos Saturnino also told a media briefing that the net profit for Sonangol, which regulates Angola’s oil sector, was $224 million in 2017 versus $81 million the previous year when oil prices were lower.

It was his first briefing since Angola President João Lourenço fired Isabel dos Santos, daughter of his presidential predecessor, from the helm of Sonangol.

Lourenço took power in September and is seeking to win credibility with international investors and shed Angola’s image as an opaque oil economy with rampant corruption. (Reuters)

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