South African News and Market Update: July’s unrest in KZN deals R158 million blow to Tongaat Hulett’s turnaround plans, and more

 South African News and Market Update: July’s unrest in KZN deals R158 million blow to Tongaat Hulett’s turnaround plans, and more

South African News and Market Update.

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The all-share index closed down 0.27% at 72,207, while the blue-chip Top 40 index closed 0.32% lower at 65,779. Sugar producer Tongaat Hulett was among the main losers, slumping 8.62% after the company posted a first-half loss and withheld a dividend on Thursday. Data from the South African Bureau of Statistics showed industrial production fell 8.9% year-on-year, while economists had expected a 1.4% drop, likely due to a strike in the steel and engineering sectors. Other data showed the current account surplus narrowed in the third quarter and mining output rose 2.1% in October.

The rand fell nearly 2% on Thursday as manufacturing output slumped much more than expected in October. At the close of trading, the rand was trading R15,92 or 1,43% weaker. In the foreign exchange market, the US dollar slipped 0.11% against a basket of similar currencies this morning to trade at 96.17, having risen to 96.27 from levels around 95.97 in the previous session. Analysts said fresh concerns about the impact of the crisis on the economic recovery may have supported the dollar overnight.

Gold prices rose slightly this morning but were on track for a fourth straight weekly decline as investors held back ahead of key U.S. inflation data that could influence the Federal Reserve’s next monetary policy move. Oil prices eased early today as traders took profits from this week’s sharp rise, fueled by growing confidence that the rapid spread of the Omicron coronavirus would not hurt global growth and fuel demand.

July’s unrest in KZN deals R158 million blow to Tongaat Hulett’s turnaround plans

JSE-listed sugar producer and land developer Tongaat Hulett has suffered a R158 million financial setback as a result of the July unrest that affected its home region of KwaZulu-Natal (KZN). This is according to the group’s half-year results (to 30 September) released on Thursday morning. The financial blow could not have come at a worse time for the group, which is in the midst of a turnaround plan following the2019 accounting scandal involving former executives. Tongaat Hulett highlighted in his interim Sens statement that the unrest and riots not only had a “158 million rupee impact on the South African sugar company’s profit” but also led to delayed property sales in its real estate division. The group reported a total loss of R254 million (from continuing operations) for the half-year, in contrast to a total profit of R59 million for the comparable interim period.

Toll compliance at lowest level in Gauteng

The current compliance rate for the payment of e-tolls under the Gauteng Freeway Improvement Project (GFIP) has continued to decline and now stands at 18% – the lowest level ever. This was confirmed to Moneyweb this week by SA National Roads Agency (Sanral) spokesperson Vusi Mona. He also confirmed that the agency has again renewed the operating contract with Electronic Toll Collections (ETC) for the Open Road Tolling (ORT) system on the GFIP and the Transaction Clearing House (TCH). “During the full shutdown [Stage 5 and 4], when traffic volumes declined primarily for light vehicles, the compliance rate increased to 23%, indicating a higher compliance rate for heavy vehicles, whose traffic volumes remained largely unchanged,” he said.

Mandy Nunes

https://gvmarkets.com/

Mandy Nunes is the Chief Marketing Officer for GV Markets. With 15 years of experience in the Financial Services Industry within the South African market, she has held various responsibilities within the business development, marketing, operations and regulatory space – leading to a very fitting position within the Trading and Investment environment. Mandy has notably been the editor of 'The Ordinary Millionaire', along with having written numerous pieces within the industry at large. Holding both legal and wealth management qualifications, her goal is to bring about massive success for, and within, GV Markets. GV Markets is a South African forex and CFD broker that offers comprehensive trading solutions to both retail and professional traders. GV Markets prides itself in being a well-regulated and reputable STP brokerage that works according to a No-Dealing Desk trading model, offering traders access to some of the best liquidity providers in the country.

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