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Chronology
Business
Johannesburg
With rumours still fresh of Time Inc not being a strategic part of TimeWarner’s future, it appears that CEO Ann Moore is soon to fire an opening salvo in what could become a decisive battle for definition and the nature of the future of Main Stream Media (MSM).
The company is facing serious problems: the websites it owns do not generate much cash and the content (print articles AND online-only offerings) is free online, while printed magazines face the spiral of never-ending, debilitating declines in circulation and advertising revenues. Coupled with what is also an almost-continuous stream of newsroom cuts and ‘rationalisations’, the picture is looking grim, very grim. To top it all, the distribution of electronic versions of printed entities is in genuine danger of being dominated by the distributors, not the publishers. (Read Malcolm Gladwell’s analysis of the publisher vs distributor face-off in his critique of… More
5 October 2009
Johannesburg
There are numerous business-related costs Sappi will save by delisting from the London Stock Exchange, not least the cost of keeping administrative staff in the city and in its wine bars. And this can only be good for the company and its shareholders.
In heading back to Jozi, the global paper giant will see these costs fast amortised by increasingly efficient trading technologies and contemporary stock market rules that smooth cross-border trade and fit well into the paradigm of globalisation. Sappi CEO Ralph Boettger says it’s now much easier for foreign shareholders to trade directly on the JSE. Anyway, the company is still retaining its NYSE listing.
Apart from listing and publicity costs, the fact that British-based shareholders only have a meagre 0.036% of Sappi’s total issued share capital is another reason it’s coming home. Sappi says the British register will be closed… More
4 October 2009
London
The tantalising prospect that the truth about the SA arms deal will finally become known took a tiny step closer yesterday, with the decision by British prosecutors to file corruption charges against BAE Systems.
The decision follows what appears to have been stand-off between the UK’s Serious Fraud Office (SFO) and BAE Systems, Europe’s biggest weapons maker, after the company rejected a plea bargain to resolve allegations it paid bribes in Eastern Europe and Africa to win contracts.
BAE Systems has in the past, like many other arms companies, adopted a kind of “lock-down” policy, in which it admits nothing and attempts to ride out the allegations – often a very successful strategy. In the rare situations prosecutions actually loom, frantic lobbying of politicians is the normal tactic, and that often works too.
BAE… More
2 October 2009
For a decade SA’s policy on the rand was: Only an idiot takes a knife to a gunfight. Is that about to change?
Since the “emerging market” crisis in 1997/98, the SA Reserve Bank has been loath to intervene in currency markets. As first Asian, then South American, then African markets got caught in the economic downturn, the Bank forged the impression this was an “Asian” economic crisis, rather than an “emerging market” one. Hence, it avoided intervening in currency markets, theoretically to soak up rand sales so it wouldn’t collapse and drag SA into the crisis.
From today’s perspective, this whole notion seems very odd.
Emerging markets now underpin the global economy, maintaining growth while established markets swoon. But this was before… More
1 October 2009
The failure, even at the second attempt, of cell-companies Bharti and MTN to agree on merger terms is a story of the failure of governments as much as it is a failure of the companies concerned
In its explanation of the failure, of what would have been the largest inward investment into South Africa, the largest investment to go out of India, and the creation of the third largest cell-phone company in the world, Bharti laid the blame firmly at the door of the South African government.
“This structure needed an approval from the government of South Africa, which has expressed its inability to accept it in the current form,” Bharti said in a statement.
MTN could easily have said the same thing. The SA government has seen company after company depart for foreign shores with… More
30 September 2009
A slew of new economic indicators for South Africa show that the nation has develop a sixties-style aversion to credit and borrowing of every kind. Despite cumulative interest rate cuts of 500 basis points since January, and general signs of recovery, credit-caution is the word of the day.
The show-stopper numbers are those on credit demand. Reserve Bank figures reflect the slowest rate of increase in credit demand since the market wobbled wobbled after the assassination of Hendrik Verwoerd in 1966 (down to 2.34% year-on-year, compared to 3.31% in July).
That was confirmed by Nedbank, which said its internal credit growth is slower than it has been since 1968. At Nedbank instalment sales and leasing finance fell 4.2% year-on-year, the fastest pace in its records, reflecting weak corporate and consumer demand for vehicles and equipment.
Things don’t look much brighter inside the heads of consumers. Regular index numbers… More
30 September 2009
New York
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Tina Brown may have a resume that’s the envy of the entire journalism world – if you’re a journalist and you don’t envy Tina, that inscription on the Mont Blanc in your pocket obviously says Graydon Carter – but hey, there’s always room for improvement. The former editor of Tatler, Vanity Fair and the New Yorker, best-selling author of The Diana Chronicles, winner of four George Polk Awards and ten National Magazine Awards, and most recently founder of The Daily Beast, is about to branch out into book publishing.
The initiative will be a joint venture between Perseus Books and… More
30 September 2009
Johannesburg
The notion that the proposed Bharti/MTN cell-phone merger, which would create the world’s third largest cell-phone company, would include dual Johannesburg/Bombay listings has been nixed by the Indian government.
The decision constitutes a setback for SA government which sent a high level team from the Finance Department to India to try and convince the Indian authorities to consider the plan.
The obvious concern is that if Bharti takes over MTN, all three SA cell-phone companies will be foreign owned, the top five companies on the JSE will be headquartered outside South Africa, and the lead exponent of SA’s corporate African expansion will be gone.
Where this leaves the mega-deal – one of the very few M&A transactions of note this year – is hard to say; Bharti, or at… More
29 September 2009
Johannesburg
The SABC uses jackboot tactics against its own in a hunt for Zapiroistas in its midst.
Internal auditors at the SABC are sequestering disk drives and demanding that staff of the Special Assignment investigative show undergo lie detector tests. Was somebody murdered? Perhaps there was a daring office robbery? No. The whole rumpus is about that programme on Jonathan Shapiro (who cartoons as Zapiro) that the channel didn't want to broadcast.
To us the biggest irony is that the show in question was mostly about Jacob Zuma, a man who knows a thing or two about raids and document seizures. Wonder what he thinks of this one.
It reads like a badly written thriller, despite the… More
29 September 2009
Johannesburg
It may as well be the end of the world: the last bastion of uncompromising, high-quality, high-cost magazine publishing still standing, Conde Nast, is about to undergo the unthinkable: a cost-cutting drive.
The imminent exercise is a culmination of a three-month project by McKinsey to establish how and where to cut without killing the company’s cherished brands.
From McKinsey’s perspective the job is simple: all the fat can be excised and a leaner, meaner company will emerge. Some estimates believe almost 25% of costs can go without affecting the magazines in readers’ hands. And they’re probably right: the world of publishing is having a pretty bad run right now and disaffected staff have nowhere to go anyway. Conde Nast has already closed Portfolio and Domino.
But, to many, Conde Nast’s culture has… More
29 September 2009
Johannesburg
The lavish party at his upmarket home first drew attention because of irate neighbours. Then the questions started: how, exactly, does Julius Malema sustain his lifestyle of a R20 000 a month Youth League pay cheque?
Eyewitness News this morning reported that Malema is a director of at least four companies, having resigned from another. That, perhaps, explains how he funds the Sandton pad and the Merc.
It is not yet known whether these businesses are active or what they do. One is listed as being in “the retail sector”, while the one he resigned from was involved in something called “financial inter-mediation”. The Youth League itself is not going to comment, and Malema is not speaking either.
Of course, Malema is partly a private citizen. He doesn’t hold public office, none of our tax money… More
29 September 2009
Johannesburg
National airliner SAA has surprised by announcing a fat after-tax profit of R398m. But the parastatal’s financials are rather like the food on its flights – it’s hard to tell what’s really in there. By Tim Cohen
For years, SAA has been a serial offender in the hedging disaster category, and past hedging errors complicate this year’s results – among many other things.But to its credit, the numbers at the very top of the income statement are good: passenger turnover is up by a healthy 20% which is remarkable during the current downturn. Costs are also up but only as a result of fuel prices.
But then, the further down you go, the muddier it gets. SAA has suffered a R399m loss from interest and hedging premiums. It then suffered an outright hedging loss of just over… More
28 September 2009
Johannesburg
National airliner SAA has surprised by announcing a fat after-tax profit of R398m. But the parastatal’s financials are rather like the food on its flights – it’s hard to tell what’s really in there. By Tim Cohen
For years, SAA has been a serial offender in the hedging disaster category, and past hedging errors complicate this year’s results – among many other things.
But to its credit, the numbers at the very top of the income statement are good: passenger turnover is up by a healthy 20% which is remarkable during the current downturn. Costs are also up but only as a result of fuel prices.
But then, the further down you go, the muddier it gets. SAA has suffered a R399m loss from interest and hedging premiums. It then suffered an outright hedging loss of just… More
28 September 2009
Johannesburg
Chinese President Hu Jintao put his stamp on the one-day UN climate change summit held on September 22 in New York, promising to cut carbon dioxide emissions per unit of GDP by "a notable margin" by 2020 from the 2005 level. The notable margin is still a quantitatively obscure concept, but at least it envisions driving the primary engine of world economic growth away from coal and oil towards a mixed-energy policy. By Mark Allix
It is also some sort of public commitment to act, which is far removed from China’s usual stance on its economy, where statistics are often treated as state secrets. One Chinese official in New York said this was the first time a Chinese leader has revealed the country's target at an international conference – whether Hu really revealed anything or not.
China has good reason to take climate change seriously. It has a population of about 1.3 billion that makes up some 20% of the world total, and GDP growth that has averaged between 8% and 12% over the past… More
28 September 2009
London
In a post-G20 world, many a finance minister will have to deliver very, very bad news to the local bankers
After last week’s G-20 statement on curbing excessive pay in banking sector, Alistair Darling has summoned the remuneration chiefs of the biggest banks in his country to tell them that executive pay needs to start showing at least a passing association with reality. Depending on your point of view that could be seen as political (British general elections are due before mid next year), unreasonable (how would banks keep their best and brightest talent out of the clutches of Goldman Sachs?), or plain justified – if slightly late. Last week the G-20 laid out clear guidelines on what it would… More
28 September 2009
New York
A strange, new fear envelops US tax-dodgers these days: A fear of the Postman.
In February this year, the biggest Swiss bank, UBS was forced to hand over the names of 285 US citizens and pay a $780-million fine. It still owes the US government 4 450 names after another deal struck in August. UBS is currently informing its clients they are about to be outted to the Internal Revenue Service. One by one outted citizens are pleading guilty to tax evasion. The latest is Juergen Homann of New Jersey who has agreed to open the whole process, and open wide. Homann’s whole smorgasboard of law firms, accountants, advisers, foundations, sham corporations and secret… More
28 September 2009
Hong Kong
Sarah Palin, in what was billed as her first speech overseas, spoke on Wednesday to Asian bankers, investors and fund managers.
A number of people who heard the speech in a packed a hotel ballroom, which was closed to the media, said Mrs. Palin spoke from notes for 90 minutes and that she was articulate, well-prepared and even compelling. “The speech was wide-ranging, very balanced, and she beat all expectations,” said Doug A. Coulter, head of private equity in the Asia-Pacific region for LGT Capital Partners. “She didn’t sound at all like a far-right-wing conservative. She seemed to be positioning herself as a libertarian or a small-c conservative,” he said, adding that she mentioned both Ronald Reagan and Margaret Thatcher. “She… More
23 September 2009
New York
Well, it's official: Dan Brown is a bigger star than Bill Clinton. Far, far, far bigger star.
Doubleday announced Tuesday that hardcover, audio and e-book sales for "The Lost Symbol" topped 2 million copies for its first week of release in the United States, Britain and Canada. The total is "well over" 2 million for English-language editions worldwide, according to Doubleday spokeswoman Suzanne Herz, who declined to offer a specific number. Herz did say that around 5 percent, or 100,000 copies, of "The Lost Symbol" were sold as e-books. Doubleday released the digital edition at the same time as the hardcover despite industry worries that e-sales might take away business from the more expensive paper text.Amazon.com reported… More
22 September 2009
Dalas, Texas
Somehow, he always manages to come out on top of money pile. Almost 25 years after he sold EDS to General Motors for $3Bn, Ross Perot will sell another company, Perot Systems, for $3.9Bn. The victim this time: Dell.
Dell, which has struggled with flagging sales of personal computers and servers during the downturn, has bought itself a piece of the federal government’s stimulus pie.
The company said Monday that it would spend $3.9 billion in cash to buy Perot Systems, a provider of technology services that is especially strong in the growing field of electronic health records. The government is pouring $19 billion over the next five years into technology to help doctors and hospitals digitize medical records.
Dell and Perot were already working together on some medical projects, but the combination brings tremendous firepower to the task.… More
22 September 2009
Johannesburg
The price of gold could hit $1,600 an ounce if crude oil goes to $100 a barrel in the next six to 18 months, the chief executive of South Africa's Gold Fields (GFIJ.J), the world's No. 4 gold producer, said on Wednesday at the Denver gold conference.
"Some people say oil is going up to $100 a barrel in the next six to 18 months. If that's true, and if you look at the long-term relationship between gold and oil, you should find that gold would go to $1,500 to $1,600," Nick Holland told Reuters in an interview during the… More
19 September 2009
Johannesburg
The end of the road for once all-mighty, multiple championship-winning Flavio Briatore
There’s no doubt that the world of sport is dirtying its moral carbon footprint. Especially motorsport, it seems. Remember the movie Rollerball, dated as it may now be in the face of cage fighting and other adventure sports. Win at any cost. Well, that happens sometimes in boxing, where dead fighters may have been murdered by proxy, as it were, when refs don’t stop the fight. Soccer has its prima donnas who dive to exact an unsportsmanlike penalty, and Maradona’s “Hand of God” goal in the quarterfinals of the Mexico City 1986 World Cup against England should have made world… More
18 September 2009
Johannesburg
Results from the latest Bureau for Economic Research (BER) Retail Survey reveal that retailer confidence declined sharply during the third quarter of 2009, falling from 47 to an eight-year low of 35 index points.
The downward adjustment in retailer sentiment comes after retailer confidence remained resilient around the 50 mark for six consecutive quarters, with the recorded readings only varying between 47 and 53 since the first quarter of 2008.
The BER's retailer confidence index depicts the percentage of respondents reporting that they are satisfied with prevailing business conditions.
Although the retail sector is not yet out of the woods,… More
17 September 2009
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