News in South Africa 17th October:

1. Transnet strike drags on:

Workers from the SA Transport and Allied Workers Union (Satawu) have rejected the Commission of Conciliation Mediation and Arbitration (CCMA)’s recommendations to try and solve its wage dispute with Transnet.

Transnet strike drags on
Image taken by: Pixabay

The CCMA Commissioner proposed a settlement between the two parties on Thursday. Estimates are that the the strike by Satawu and the United National Transport Union (UNTU) could cost the SA economy up to R1 billion a day

“The union appreciates the CCMA Commissioner’s presence during the negotiations from 10 – 15 October,” wrote Satawu General Secretary, Jack Mazibuko.  

“Although we appreciate the efforts of the Commissioner…our members have unanimously rejected the recommendations,” he added in a letter addressed to the CEO at the Transnet Bargaining Council, Mthimkhulu Mashiya.

Mazibuko said the union couldn’t accept the settlement recommendation because the Commissioner’s proposal was below inflation.

“Our members feel that accepting anything below inflation will be a detriment of their livelihoods. They will accept anything above inflation,” he said.

Mazibuko said another reason for rejecting the CCMA’s proposed settlement offer was that in Satawu’s previous negotiations with Transnet, their negotiations contained a “no-retrenchment” clause; the union now has to accept a retrenchment clause.

The rail operator employs 40 000 people, and employment costs make up 66% of its cost base.

Satawu said it is willing to compromise with Transnet to ensure that production resumes without delays. But it also wants to mitigate conditions of poverty and structural inequities in SA.

2. Water at critical levels:

Water and Sanitation Minister Senzo Mchunu will be engaging municipalities in Gauteng as well as Rand Water.

That’s after Rand Water systems crashed, causing the water supply to drop to critical levels.

The utility has urged consumers to continue playing their part in conserving water.

Water and sanitation spokesperson Sputnik Ratau said there will be no Day Zero in Gauteng.

Many residents have been without water for as many as three weeks. While no one can point to the root cause of the supply crisis, Mchunu said municipalities are partly to blame as poor infrastructure maintenance has led to water losses through leaks.

Between 30 and 35 percent of water in the province is lost through water leaks.

3. Airport revamp for holidays:

The Airports Company South Africa (Acsa) said that it is gearing up to upgrade OR Tambo International Airport alongside others ahead of the December rush.

Speaking to the reporters, Acsa spokesperson Samukelo Khambule said that the company will focus on expanding infrastructure and capacity in the medium and long term.

Acsa said it aims to move away from outdated business practices, such as parking machines that only accept cash, and recover from the pandemic by reopening shops and restaurants.

With OR Tambo as a starting point, Khambule outlined the company’s massive push towards digitalisation with a revised parking system that can recognise a licence plate and the upgrading of pay stations.

Alongside the tech upgrades, fundamental infrastructure is set to be given a fresh coat of paint, with lighting, escalators, restaurants and windows all to be deep cleaned and bought back to service.

Both King Shaka International Airport in Durban and Cape Town International Airport are implementing similar upgrades to their airport services.

Other improvements include:

  • Security systems
  • Boarding bridges
  • Taxiways
  • Check-in bays

OR Tambo will also be the first airport in South Africa to use the South African Revenue Service’s new digital travel pass, which will come into effect from 1 November 2022.

The new system will simplify passenger movement at South African airports, SARS said, collecting necessary travel information and, in return, granting a traveller pass via email.

It requires that all travellers – including South African citizens and residents, children and infants – leaving or entering South Africa by air complete the declaration. SARS said that once completed and submitted, travellers will receive a pass before they board.

The new online system will be rolled out in all South African international airports, starting with OR Tambo International Airport and then to others in the first quarter of 2023, the revenue service said.

4. Life insurance boasting good investments:

While the pandemic created excess mortalities and hammered life insurers’ profits, it did reinforce how critical life insurance is and how important the institutions that write this cover are to the broader economy.

The pandemic has faded into an endemic, mortalities have drifted lower (though they remain slightly elevated on some metrics and we still do not know the effects of long Covid) and life insurers’ profits are recovering nicely.

Despite this, not a single JSE life insurance group’s share price is trading higher than it was at the close of 31 January 2020 (pre-pandemic) and all of them are currently trading at significant discounts to their embedded values (EVs):

Sourced from Moneyweb


Discovery (DSY) continues to shovel cash into the furnace that is its loss-making bank, while watching members trading down from its higher-end schemes to lower-end (lower margin) ones.

Despite the group’s strong management, it feels like Discovery’s prospects are, at best, likely to tread water for the foreseeable future.


Sanlam (SLM) has set up a good pan-African partnership model, and more recently has made an offer to gain control of AfroCentric Investment Corporation (ACT).

The latter may allow it to go head to head in challenging Discovery’s Vitality, while also bolstering Sanlam’s other (via AfroCentric) offerings.

Old Mutual:

Of the two most discounted against their EV’s, Old Mutual (OMU) has been through several years of clean-up, unbundling its UK operation (now called Quilter plc), its stake in Nedbank, and being embroiled in a public spat with its former CEO Peter Moyo.

The group has a lot of work to do to repair its reputation on this front.

Momentum Metropolitan:

That leaves Momentum Metropolitan (MTM), which is a preferred pick in this sector.

Momentum Metropolitan’s share is both cheap against its peers (average discount to EV is now 34% while MTM’s is currently 49%) and cheap against its own historical discount to EV (which averages 17%).

At a little over 1 500 cents per share, it is currently offering investors the unique combination of a deeply discounted share, strongly recovering profits, and the combination of good dividends and value accretive share buybacks.

5. Private jets soar:

The war in Ukraine and soaring crude oil prices mean the cost of jet fuel is two thirds higher than 12 months ago, according to IATA’s Jet Fuel Price Monitor, based on data from Platts Analytics. 

Higher labor costs, the strong US dollar and inflation in general have pushed up the cost of flying privately by 15% to 20%, says Leona Qi, who runs the  US division of global charter company VistaJet. 

You may not be surprised to learn that the increase has not dampened the appetite of wealthy individuals to fly on VistaJet’s fleet of Bombardier G7500s.

In the first six months of the year, VistaJet’s global membership rose by 25%, with the number of flight hours up by 76%. 

It’s a similar story for flyExclusive, another private jet charter firm. “We’ve got about all the demand we can possibly handle,” says Jim Seagrave, the founder and CEO. Revenues are up 72% in the past year despite a “ballpark 30-35%” increase in charter prices across the board.

“So far it hasn’t negatively impacted demand,” Seagrave tells Insider, but admits that further price rises may have an impact sooner or later. “Right now we haven’t had any issues with that and demand is incredibly elastic.”

The companies that make private jets are also enjoying strong demand. Gulfstream, whose planes like the G650ER can cost as much as $65 million, enjoyed a record sales run over the past 18 months into its third quarter, its sales chief Scott Neal said at the Farnborough Airshow in July. 

All information sourced from articles posted by: Fin24, ENCA, BusinessTech, Moneyweb, and Business Insider.

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