Financial News in South Africa 4th November:
1. Moody’s cuts outlook to negative:
Moody’s didn’t downgrade South Africa to junk on Friday night. But our outlook has been cut to “negative” – the last step before junk. “The negative outlook signals in part Moody’s rising concern that the government will not find the political capital to implement the range of measures it intends, and that its plans will be largely ineffective in lifting growth,” the agency said in a statement.
“While high unemployment, income inequality and the social and political challenges they imply for policymakers are long-standing features in South Africa, the obstacles that they pose to the government’s plans to raise potential growth and contain fiscal deficits are proving more severe than expected a year ago,” Moody’s added.
2. Rand strengthens:
The rand has strengthened substantially thanks to the Moody’s reprieve – to around R14.82$ from above R15.16 earlier last week.
3. Dischem suffers after trade update:
Dischem is expected to have an extremely tough Monday after a bruiser of a trading update on Friday evening. The retailer’s half-year profit could be more than 40% lower due to accounting changes and costs related to a strike.
4. Starbucks in SA sold:
The Starbucks franchise in South Africa has been sold for R7 million. Taste, is selling Starbucks to consortium of shareholders, including Rand Group, which is owned by Adrian Maizey, a non-executive director of Taste.
Taste also plans to sell its other food brands – including Domino’s Pizza, Maxi’s and The Fish & Chips Co – after the company calculated that it would need at least R700m to generate a positive cash flow from these businesses.
5. Data costs could drop:
In a breakthrough that could cut data costs by 25% in three years, Icasa has finally released guidelines for the licencing of high-demand spectrum.
The country’s communication regulator has released guidelines for the licencing of high-demand spectrum which is expected to improve broadband access, competition among service providers and secure lower prices for consumers.
Spectrum is a range of radio-waves that are used for communication – including radio, television and wifi.
All information sourced from articles posted by: