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ICYMI: A roundup of Monday's must-read financial and economic news.
Steinhoff continues trade, appoints subcommittee
Global retail company Steinhoff has established a board subcommittee to bolster independent governance following the resignation of its CEO Markus Jooste over accounting irregularities last week.
In a note to shareholders issued on Monday morning, the group announced that in the wake of Jooste’s resignation it had set up the new board subcommittee, and hired PwC to conduct an independent forensic investigation.
The Stellenbosch-headquartered company's audit committee is also "working with our statutory auditors, Deloitte to facilitate the release of our audited financial statements".
It said the 40-odd companies that fall under the Steinhoff umbrella, from Ackermans in SA to Poundland in the UK, were continuing with "uninterrupted" trade in the important pre-Christmas period.
READ: Steinhoff continues trade, appoints subcommittee
In other Steinhoff-related news, its chair Christo Wiese is seeking to stabilise the embattled retailer by negotiating a standstill agreement on a €1.5bn (R24bn) margin loan under which banks would suspend the sale of stock until next year, according to people with knowledge of the discussions.
READ: Wiese steps up efforts to save Steinhoff, seeks standstill on loan
Read a profile of the group's former CEO, Markus Jooste here.
OPINION: Irrational IRP madness grips SA's energy sector
At a media briefing on December 7 during the so-called Energy Indaba, Energy Minister David Mahlobo announced that the long-awaited Integrated Resource Plan for electricity, IRP 2017, had been finalised and approved by the Cabinet the night before. Chris Yelland, an investigative editor at EE Publishers, gives his take on what this means.
READ: Irrational IRP madness grips SA's energy sector
Threat of split looms as ANC readies to pick new leader
As delegates from the African National Congress (ANC) gather this week to pick a new leader to succeed President Jacob Zuma, they face a challenge that’s threatening to overshadow the contest: to stop the party from splitting.
The likelihood of a breakup is probably the biggest in the ANC’s 105-year-old history, especially if Nkosazana Dlamini-Zuma, the president’s ex-wife and favoured contestant, beats his deputy, Cyril Ramaphosa, in the vote for party leader, according to analysts. The winner will also be the ANC’s presidential candidate in national elections in 2019.
While both candidates have called for the ANC to remain united after the December 16 to 20 conference, they differ on what needs to be done to halt the slide in its support.
Ramaphosa, 65, one of the wealthiest black South Africans, has pledged to revive the struggling economy and stamp out corruption, while former African Union Commission chairperson Dlamini-Zuma, 68, has echoed Zuma’s calls for "radical economic transformation" to place more wealth in the hands of the black majority.
READ: Threat of split looms as ANC readies to pick new leader
Bitcoin futures start with a bang as gain trips circuit breakers
Bitcoin landed on Wall Street with a bang.
Four hours after the debut of Cboe Global Markets’s bitcoin futures, the contracts climbed more than 20% and triggered two trading halts designed to cool volatility. Dealers said initial volumes exceeded expectations, while traffic on Cboe’s website was so strong that it caused delays and outages. The exchange said all its trading systems were normal.
“It was pretty easy to trade,” Joe Van Hecke, managing partner at Chicago-based Grace Hall Trading, said in a telephone interview from Charlotte, North Carolina. “I think you’ll see a robust market as time plays out.”
The launch of futures traded on a regulated exchange is a watershed for bitcoin - testing infrastructure that will make it easier for legions of professional traders and mainstream investors to bet on the cryptocurrency’s rise or fall, potentially helping to steer its price.
READ: Bitcoin futures start with a bang as gain trips circuit breakers
EOH blames 'forced sale' of shares for massive price plunge
As the eyes of SA investors were fixed on Stellenbosch-headquartered global retailer Steinhoff this week, the share price of another JSE-listed firm was in free fall.
The stock of EOH, an information and communications technology services provider, dropped from R69.51 on Thursday morning to just R30.95 on Friday morning, a fall of 55%.
The price recovered somewhat during trade on Friday, and shot up to R60.78 as of 11:00 on Monday, just 12% below its opening price on Thursday.
On Monday, in a stock exchange news service announcement, EOH said the high volumes of shares traded on Thursday and the price drop were caused by “the forced sale of shares by financial institutions against equity financed transactions to various individual shareholders, including two EOH directors”.
The group also announced that it had appointed lawyers Edward Nathan Sonnenbergs to conduct a “full fact-finding review of the commercial activities” of the three companies Grid Control Technologies, Forensic Data Analysts and Investigative Software Solutions.
READ: EOH blames 'forced sale' of shares for massive price plunge
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