News in South Africa 18th March:
1. Covid-19 cases increase in SA:
Coronavirus cases increase to 116 in South Africa as local transmissions rise.
The new 31 cases are as follows:
Health Minister Zwelini Mkhize says that as part of tracking and tracing, they have collated background information on how these patients were infected.
They will provide information to the public, so as to give a sense of how these local transmissions occur.
Mkhize says they will not disclose full details as this information is subject to patient confidentiality.
2. Sasol releases plans for the year:
Following a disastrous share crash, oil and chemicals company Sasol on Tuesday released a new plan to raise at least $6 billion (R100 billion) by the end of 2021.
Sasol has now lost 90% of its value over the past year, and suffered major losses last week after a shock fall in the oil price. Sasol lost two-thirds of its value last week.
Investors are concerned about the company’s debt burden of R121 billion – largely built up to finance the problematic Lake Charles chemicals project in the US. Sasol is valued at only R28 billion by the market.
Some of Sasol’s loan conditions require that its debt-to-profit levels remain above a certain level. Sasol’s profits will take hit a from the lower oil price, which will probably leave it in breach of these debt covenants. This means that its loans could become payable immediately.
On Tuesday, Sasol confirmed that it will be able to comply with these debt covenants – as long as the the rand oil price is consistent at around R580 per barrel. Currently it is at R515.
3. Old Mutual comes out on top:
The Johannesburg High Court has dismissed an urgent application by former Old Mutual CEO Peter Moyo to stop the company from hiring a new chief executive on a permanent basis pending the appeal of a January ruling that found his dismissal was lawful.
The ruling is a setback for the embattled former head of the financial services group, who has faced his former employer in a drawn-out legal battle since his axing in June 2019.
Moyo had previously argued that Peter Moyo has said he would suffer further reputational harm if the financial services company appointed a new CEO while there is an ongoing court battle.
On Tuesday, Old Mutual welcomed the ruling by Judge Colin Lamont, saying the company “looks forward to continuing with our intensive process to recruit a permanent CEO”.
“This will give us and the market much-needed certainty,” the company said.
4. Wall Street stocks rally:
Wall Street stocks rallied on Tuesday on expectations for massive federal stimulus to address the economic hit from the coronavirus, partially recovering some of their losses from the prior session.
The Dow Jones Industrial Average finished up 5.2 percent or around 1,050 points at 21,237.38, a day after shedding almost 3,000 points.
The broad-based S&P 500 gained 6.0 percent to 2,529.19 while the tech-rich Nasdaq Composite Index jumped 6.2 percent to 7,334.78.
US Treasury Secretary Steven Mnuchin said the White House is focused on a stimulus that would include sending checks to Americans within the next two weeks.
The White House is targeting an $850 billion (R14 trillion) package, the Washington Post reported.
5. Rand steadies:
The rand is steady at R16.58/$ ahead of tomorrow’s key South African interest rate decision.