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US keeps close eye on Walmart appeal

Feb 17 2012 09:34 Sapa

Company Data

MASSMART HOLDINGS LIMITED [JSE:MSM]

Last traded 144.04
Change 0.04
% Change 0.00
Cumulative volume 47683
Market cap 31.27bn

Last Updated: 22/07/2014 at 12:30. Prices are delayed by 15 minutes. Source: McGregor BFA

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Johannesburg - Whether Walmart ultimately succeeds in buying a controlling share of major South African chain Massmart Holdings [JSE:MSM] could affect whether other Americans come to do business on the continent, a US Chamber of Commerce official said Thursday.

An appeals board for South Africa's Competition Tribunal is currently considering challenges made by agencies and unions who question the approval of Walmart's bid. The government agency is charged with discouraging monopolies and protecting consumers.

Myron Brilliant, senior vice-president of the US Chamber of Commerce's international division, said Americans are closely watching the issue.

"How Walmart is treated does have some bearing on how potential investors look at the continent," said Brilliant, who was leading a chamber team visiting South Africa this week.

According to South African government figures, total US-South African trade last year was more than R100bn, compared to R173bn with China.

Brilliant described South Africa as a gateway to the rest of Africa, and he said increasing trade between the US and South Africa could create jobs in both countries.

Both countries "want growth. We want to see economic growth, and we want to see job growth," Brilliant said. "The message is clear: jobs, jobs, jobs."

Unemployment in the US in January was 8.3%. In South Africa, unemployment figures of 23.9% released earlier this month for the end of 2011 were applauded, because that represented the biggest growth in employment for South Africa since its 2009 recession.

Earlier this month, South Africa's president announced ambitious infrastructure projects. Brilliant said American companies will want some of the business that is likely to generate. But they needed reassurance.

"There's been some uncertainty about the direction of the government," he said.

On mining, South African policy makers have repeatedly said nationalisation is not on the agenda. But some within the governing ANC party continue to raise the issue, and Brilliant said he may not be able to take a clear answer back to investors after his first trip to South Africa.

Brilliant said he also needed to learn more about the reality of a labour force with a reputation of being quick to strike. But he noted a number of US companies are already working in South Africa, proof that management-labour issues can be resolved.

The US Chamber of Commerce calls itself the world's largest business organisation, representing more than 3 million businesses ranging from small shops to international corporations.

 
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