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Top 6 on Fin24: Steinhoff raises R3.75bn in sale of STAR shares, SAFTU threatens to make SA ungovernable

Cape Town - A roundup of Thursday's top economic and finance reads on Fin24.

Tariff hike on imports has businesses fuming

 

A duties increase on trade goods signed off under former minister of finance Malusi Gigaba has captains of local industry seeing red over the costs it will add to their business operations.

The business community claims that the South African Revenue Service (SARS) and National Treasury introduced a 10% increase in the import tariff on components of ready-made blinds without warning or consultation. However, Treasury said the hike was in line with multilateral trade agreements.

A customs and excise schedule, which Fin24 has seen, reflects that Gigaba signed off on tariffs for three categories of items; namely parts of a maximum outside cross-sectional dimension not exceeding 370mm, bars and rods of a maximum cross-sectional dimension exceeding 7.5mm, but not exceeding 160mm, as well as profiles of a maximum cross-sectional dimension not exceeding 370mm.

Traders see rand as haven

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The rand may have been the world’s most volatile major currency over the last year, but traders think that’s going to change as price swings surge in Mexico, Russia and Turkey.

The South African currency's implied, or expected, volatility over the following three months is below that of the peso, ruble and lira for the first time since at least 2005, according to data compiled by Bloomberg. It's a turnaround from just two weeks ago, when investors priced the rand's future volatility higher than any of its peers.

South Africa is becoming something of a haven because many investors are optimistic about economic reforms under new President Cyril Ramaphosa. Meanwhile, they’re fretting about high inflation and loose monetary policy in Turkey, US sanctions against Russia, and Mexico’s elections in early July.

Glencore losing business allies as Trump policy kicks in

The reach and power of US sanctions are hemming in the world’s largest commodity trader.

In just four months, Glencore chief Ivan Glasenberg has lost two of his closest business allies as President Donald Trump’s aggressive foreign policy hits home, forcing him to cut ties with billionaires Oleg Deripaska and Dan Gertler.

The US actions demonstrate the rising risk from international sanctions for companies like Glencore, which has built a global business by cutting deals with powerful people, and leaves the trader without its key men in two major markets. 

STAR stake sale raises R3.75bn for Steinhoff

Steinhoff International Holdings [JSE:SNH] announced on Thursday morning it had raised R3.75bn by selling 5.8% of its shares in Steinhoff Africa Retail Limited, or STAR.

This after the embattled conglomerate launched an accelerated book build offering of 200 million ordinary STAR shares to help refinance debt. This stock sale took place with the Stellenbosch-headquartered retailer still under a cloud related to the valuation of the company and the management of its finances.

The company is still reeling after it announced financial irregularities in its books in December, which caused its market capitalisation to be whittled down by over R200bn.

Steinhoff said it managed to place the placing shares at a price of R18.75 per placing share. This allowed the company to raise total gross proceeds of R3.75bn, representing a discount of 2.6% to the STAR closing price of R19.26 on Wednesday.

Business body rejects Ivan Pillay’s resignation

The Small Business Institute will not accept the resignation of its board member Ivan Pillay, saying in a statement on Thursday that it questions the motives of National Prosecuting Authority (NPA) head Shaun Abrahams.

Pillay is the institute’s director of government liaison, a post that entails cutting down on bureaucracy and red tape, and easing access to markets for small businesses.

Pillay and former SARS colleagues Andries Janse van Rensburg and Johann van Loggerenberg briefly appeared in the Pretoria Magistrate's Court earlier in the week on charges of the illegally interception of communications and corruption relating to the alleged installation of cameras at the offices of the NPA.

The institute said that while it would normally accept the resignation of a board member who is facing criminal charges, it questioned the intention behind the charges.

Federation threatens to make SA ungovernable

The South African Federation of Trade Unions (Saftu) has threatened to make the country "ungovernable" if government continues with its plans of a R3 500 minimum wage.

Saftu demands what it calls a living wage and, furthermore, rejects proposed Labour bills and the 1% VAT increase to 15% which came into effect on April 1.

"We will put the economy of this country down for them to listen. This economy is built on our own sweat and blood," the federation's deputy chairperson for the Western Cape Nyaniso Siyana said during a protest march to Parliament in Cape Town on Thursday.

It said the aim of the march was to make known the plight of the working class and poor South Africans.

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