Publications
Partners
Cape Town - A roundup of the day's must-read financial news
We'll pay back the money (but who do we make the cheque out too?) - McKinsey
Global consultancy McKinsey has no objection to paying back the R1bn it earned from work done for power utility Eskom, said David Fine, senior partner at the consultancy firm.
Fine was testifying before Parliament’s portfolio committee on public enterprises during Parliament's ongoing inquiry into state capture allegations at Eskom
In October this year, Eskom said in a statement it had sought the cooperation of McKinsey and Gupta-linked Trillian in returning R1bn and R564m respectively “which appears to have been unlawfully paid out in 2016 and 2017”.
Fine was asked what is stopping McKinsey from paying back the money which has allegedl.
“We’re awaiting confirmation – do we pay the money to Eskom or South African citizens?” Fine said. He added that McKinsey has “reserved” the funds and that it is eager to resolve the impasse.
“Who should receive the money, and how should it be delivered?”
READ: Gordhan grills McKinsey witness over state capture allegations
Zimbabwe business take stock
Most retail outlets in the capital Harare opened for business Wednesday, despite armed forces seizing control of Zimbabwe, including the state-owned radio and television station.
Zimbabwean President Robert Mugabe has been confined to his home in Harare but is otherwise fine, said President Jacob Zuma, who spoke to the 93-year-old leader by phone.
READ: Mugabe's era is ending as Zimbabwean military seizes power
A survey conducted by Fin24 showed that by 10:00 on Wednesday morning most retail outlets had opened their doors, although walk-in traffic at the outlets was much lower than usual.
A Pick n Pay outlet which is less than 200m from the Zimbabwean parliament, where an armoured military vehicle and armed soldiers were deployed, was open for business although the customer count was lower than usual.
A shop assistant who spoke to Fin24 said their head office hadn't told them to close.
“The only communication we got is that we can close if there is any riot or looting. We have just been told safety first, but as you can see we are operating as usual,” the assistant added.
READ: Business as usual in Harare
Cryptocurrency Bitcoin, meanwhile, surged in Zimbabwe in the wake of the change in power. Bitcoin's price jumped as high as $13 499, almost double the rate at which it trades in international markets, according to prices cited on Golix’s website.
READ: Bitcoin is going wild in Zimbabwe
The Zimbabwe Stock Exchange closed lower on Wednesday, but analysts say this may have been due to regular market volatility.
At the close of trading the ZSE’s main Industrials index was down 1.28% to 527.27, while the Mining index was unchanged.Turnover for the day at $13.6m was slightly lower than $15m on Tuesday.
"It’s hard to tell [what cuased the drop], because we have been seeing bouts of profit taking in the last couple of days," said a local stockbroker
Tariff hike could save Eskom - Treasury
National Treasury says the national regulator’s decision on whether to grant Eskom a tariff hike, as well as R60bn in clawback tariffs, could help improve the state utility’s liquidity squeeze.
Fin24 and EE Publishers on Monday reported that the power utility’s poor governance had left it teetering on the edge of insolvency, with only R1.2bn of liquidity reserves expected to be in hand at the end of the month.
This was based on Eskom’s latest report to its shareholder representative, Public Enterprises Minister Lynne Brown, which showed that its liquidity was fast drying up, as it struggled to raise funds in an unsympathetic market.
National Treasury confirmed to Fin24 that it had received the second quarter report this week.
“The team is still reviewing it,” Treasury said, adding that Eskom was exploring alternative sources of funding.
READ: Tariff hike could save Eskom - Treasury
SAA shouldn't rely on bailouts, Parliament hears
Government guarantees to SAA should not be viewed as an easy option to avoid managing risks as currently appears to be the case, the Financial and Fiscal Commission on the SAA debt relief and recapitalisation said on Wednesday.
These guarantees should not be taken for granted and become a default response position, it told Parliament’s standing committee on appropriations.
“Given that guarantees are not exposed to the same level of scrutiny in the budget process as regular spending, the commission advises oversight mechanisms of guarantees should be strengthened to reduce the risk of unintended consequences from materialising particularly at National Treasury…,” the FFC told the committee.
“The commission is concerned that this bailout will create the perception that SAA – and other public entities – can count on government to support it when faced with financial troubles.”
READ: SAA shouldn't rely on bailouts, Parliament hears
Pain at the pumps as the AA projects a sharp fuel price hike
The Automobile Association (AA) on Wednesday predicted a sharp jump in fuel prices at the end of November, based on data released by the Central Energy Fund
It said in a statement the price hikes were due to a weak rand and a rise in global oil prices, and cautioned that fuel price increases could continue into 2018.
READ: Pain at the pumps expected over festive season
SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.
Read Fin24's top stories trending on Twitter: Fin24’s top stories
