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CSIR’s outlook regarding South Africa’s future electrical energy mix

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In the absence of an bring up to date to the outdated country’s Integrated Resource Cover Electricity, IRP2016-2030, the CSIR Vitality Centre has shown its own study in order to re-optimise the South African power capacity along with mix from 2016 to be able to 2040.

The CSIR study by Doctor. Tobias Bischof-Niemz, Jarrad Wright, Joanne Calitz and Crescent Mushwana was initially presented at the Windaba 2016 convention in Cape Township on 3 December 2016.

The capacity and energy combine re-optimisation by the CSIR takes into account the considerably lower electricity demand forecast for the years ahead, the actual significantly reduced cost of electricity from photo voltaic photo-voltaic (PV) and the wind capacity, and South Africa’s international commitments to constrain CO2 emissions pursuing the country’s “peak-plateau-decline” objectives.

Following much the same modeling exercise, and going to the same software software as that applied by the Department of Energy and Eskom planners to prepare your IRP, the CSIR study in place does what the long-awaited 2016 IRP Revise should have done grows older ago.

As such, this CSIR presents what it determines to be the re-optimised, least-cost incorporate for new electricity age bracket capacity technologies for your years ahead to help 2040, taking into account and changing all the necessary market, electricity demand, technologies cost and other suppositions.

Fig 1: Energy mix for “Business as Usual” vs. “Re-optimised” scenario from 2016 for you to 2040

Source: CSIR

On 15 September 2016, in the second meeting in the Ministerial Advisory Council on Electricity (MACE) since it was first conceptualized in June 2016, Reverend Tina Joemat-Pettersson presented the 2016 Nfl draft IRP Update report to the girl advisory forum of energy specialists and stakeholders.

The minister sought-after MACE’s endorsement of the version before its submitter to the cabinet, after which you can the minister revealed that it would be made available freely for wider insight and comment through a public promulgation process.

However, rather than simply endorsing this 2016 Draft IRP Update, your advisory body established the subcommittee comprising Prof. Anton Eberhard, Dr. Tobias Bischof-Niemz, Prof. Johan van Dyk and Mr. Mike Levington to analyse them fully, and to report back to MACE and the minister with its recommendations. While waiting, submission of the 2016 Draw up IRP Update to pantry and the public had been delayed.

It is understood how the final recommendations in the MACE subcommittee were presented to MACE the 2009 week.??

In addition to changing the economic, electricity demand, technology cost and various assumptions, the CSIR study has removed the bogus capacity delivery constraints of approximately 1000 MW every year for solar PV, together with 1600 MW per annum to get wind that had been applied to IRP2016-2030 and the 2016 Draft IRP Upgrade (which was never taken by the cabinet), plus the wind and solar PV constraints that exist in the 2016 Set up IRP Update.

Fig. 2: Capability mix for “Business when Usual” vs. “Re-optimised” scenario with 2016 to 2040

Source: CSIR

The CSIR study ensures that without these fake and arbitrary total annual constraints on the transport of new solar PV and also wind capacity, together with the reduced electricity require forecast and the diminished wind and solar PV expenditures, the need for new coal and new nuclear power is completely stripped away from the re-optimised, least-cost mix for the years ahead to help 2040.

At the same time, the increased function of PV, the wind and gas in preference to new coal together with nuclear power inside re-optimised, least-cost mix, and the regressing role of fossil fuel as Eskom’s old, coal-fired generation plant is retired, results in CO2 emissions that happen to be some 60% lower than that relating to the “business as usual” circumstance based on the 2016 Draft IRP Bring up to date assumptions.

Similarly, the protection of new coal electricity in the re-optimised, least-cost mix, as well as the declining role regarding coal as Eskom’s aged, coal-fired generation plant is certainly retired, results in a drinking water usage some 60% below that of the “business while usual” scenario, with a preserving of 40-billion litres water per annum by 2040.

Fig. 3: CO2 wastes and water work with for “Business as Usual” compared to. “Re-optimised” scenario from 2016 that will 2040

Source: CSIR

But most importantly, the CSIR examine shows that the re-optimised, least-cost combination for new generation volume in South Africa between 2016 and 2040, with its increased new solar, PV and gas, though avoiding new fossil fuel and new nuclear, would save some R330-billion around this period, rising to help R87-billion per annum by 2040.

This would result in a price of electrical energy some 18% lower in each kWh if South Africa adhered to the re-optimised, least-cost mix projected by the CSIR, as compared to that regarding the “Business as Usual” scenario based on the 2016 Draft IRP Upgrade assumptions.

Fig. 4: Rates for “Business as Usual” v .. “Re-optimised” scenario from 2016 for you to 2040

Source: CSIR

Dr. Tobias Bischof-Niemz concluded by on the grounds that solar PV, wind plus natural gas now deliver the cheapest new-build mix for any South African energy system, and that your cost-optimal expansion should strive for a 70% renewable energy share of mix through 2040. He further put forward the proposition that the building within the re-optimised capacities in the ages to 2040 would provide a gentle anchor off-take for a Southerly African solar PV plus wind manufacturing market.

“Avoiding CO2 emissions and least-cost isn’t an trade-off anymore C South Africa can easily de-carbonise its electricity field at negative carbon-avoidance cost”, reported Dr. Tobias-Niemz.

Chris Yelland CEng, investigative supervisor, EE Publishers

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Industry

Zombie banks stalk African-american with mergers one way to limitation risk

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Africa’s many small and under-capitalised finance institutions, laden with undesirable debt, are causing more pain upon already embattled economies.

Regulators might have no choice although to force lenders that will consolidate or in close proximity. A third of Nigeria’s 21 years old banks may be under-capitalised.?Smaller Uganda has 25 banking institutions and last month endured one collapse. South africa has had three downfalls since August last year and with 40 banking institutions, boasts almost an individual bank per , 000, 000 people. Angola’s 30 roughly banks may need to boost reserves by $4 billion, while a Mozambican bank was rescued with the central bank throughout September. Ghana is indicating to banks to combine and lift funds through the wall street game.

“The consequences of inaction will be disastrous,” proclaimed Robert Besseling, a Johannesburg-based executive director at business-risk consultant Exx Africa. “Uncontrolled bank breakdowns pose significant contagion hazards to other banks, state-owned enterprises and private businesses.”

Zombie lenders, a term coined by Edward J. Kane regarding Boston College later,?are typically all but bankrupt save for authorities support. They have in pain economies from The japanese to Europe and today it may be Africa’s turn. A continent has been struggling by falling thing prices, an enduring shortage, weakening currencies as well as a slowdown in Tiongkok, its biggest exchanging partner. A plethora of creditors edging toward crease have governments concerned and central bankers scrambling to find ever more scarce liquidity.

‘Death Spiral’

“When lenders get in tough times, regularly initiated by financial slowdown, they restrain capital, reinforcing the economical slowdown which bites down harder regarding bank performance,” said Adrian Saville,?chief strategist with Citadel Investment Services around Johannesburg. “In its toughest form, this can take the shape of a demise spiral.”?

Trying just to save them may be an exercise in futility because living dead banks don’t have a history of regeneration, said Saville. Right after the Japanese bubble sprang leaks in 1990, a raft of living dead banks staggered along for an additional 20 years, which hamstrung asia economy, according to Saville. On the other hand, he said, when You.S. banks were definitely allowed to fail it meant the lenders that will emerged from the damages were able to behave along with perform functionally.

The threat with failing African lenders is compounded by the fact that “there are some countries together with far too many banks,Half inch said John Ashbourne, an economist at Capital Financial aspects Ltd. in London. “Kenya stands apart as an example of this. Providing problems continue to be based in the region’s smaller banks, I expect to have regulators will intercede or force consolidation.”

The Kenyan regulator is trying. In Sept, it capped banks’ offering rates to activate credit, lower borrowing from the bank costs and promote consolidation.?It’s dubious the caps can create a competitive banking industry, S&P Global Recommendations said last month. At this point, all they’ve done is hurt income while threatening in order to tip some loan companies into insolvency.

“The reduced Kenyan banks are dealing with a potentially dangerous alcoholic drink of declining profit margins, declining liquidity and also deteriorating asset superior, which could at best force consolidation while in the sector, or with worst precipitate a full-blown banking crisis,” Ronak Gadhia, a strong equity analyst for Exotix Partners LLP in London, mentioned in a note. “The proactiveness within the regulator is likely to be critical within determining the outcome.”

 

It had been that domestic consumer banks in Camera had a captive market place that foreign financial institutions, hungry for governing administration work and cope fees, weren’t considerably interested in. That’s altered and it’s adding to the difficulties.

“For Africa’s small domestic finance institutions the advantage of having neighborhood roots is now currently being eroded by mobile-money purposes and more sharing connected with credit information,Inches said Mark Bohlund, a new London-based economist at Bloomberg Intelligence. “This should really lead to increased banking institution consolidation through mergers and also acquisitions, which, in principle, should weed out more compact less-efficient banks.”

In Mozambique, which is can not repay debt following your commodity slump slashed export revenue and the depreciation of its forex increased the cost of dangerous loans, the main bank has imposed restrictive measures to make small banks either to recapitalise or be sold, based on Besseling. Moza Banco SA was taken over by way of regulators in June with a view of heading back it to health and selling it.

The chances of uncontrolled bank breaks is “high” in both Mozambique as well as Angola, he said, adding that will banking crises are possible in Nigeria plus the Democratic Republic of Congo.

Bankruptcy Beckons

“The Angolan banking-sector landscape often see some changes in any not so distant upcoming,” said Tiago Dionisio, any Lisbon-based analyst for Eaglestone Advisory SA. This overhaul will probably be motivated by rising non-performing lending products and more demanding regulatory changes to boost funds levels. “The current amount of banks operating near your vicinity might prove to be not sustainable.”

The demise of Uganda’s Crane Bank Ltd. and also other lenders may lead to chances for buyers. Loan providers like South Africa’s FirstRand Limited. and Nedbank Group Limited. want to expand together with declining valuations over the continent may be the split they’ve been waiting for.

In this meantime, Africa’s banks aren’t going to be lending as much as they could, stalling consumer expending and curbing organization growth.

“Depositors are afraid of placing deposits with zombie banks, so they don’t end up being funding to grow their book and outgrow the zombie lending products,” said Kokkie Kooyman, your portfolio manager on Cape Town-based Denker Capital. “The zombie loans on the equilibrium sheets prevent personal loans for new projects that will the country to grow.”

While it could save some jobs along at the affected banks, preserving troubled lenders well adds no worth to the economy, he stated.

As for what to do with all those banks, it may be best to dispose of them to specialized automobiles that will act like vultures, Kooyman said. “They’ll pick the bone clean and life proceeds.”

? 2016 Bloomberg

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Industry

Yellow corn deluges most in calendar month as rand weakens

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Yellow corn in South Africa, the continent’s biggest producer, rallied the most in a four weeks after the nation’s foreign money slumped the most in five years against the bill, making locally created grain more attractive relative to imports.

Yellow corn for December delivery climbed Three.2%, to R3 214 ($225) a full ton on the Southerly African Futures Transaction in Johannesburg. That had been the biggest increase considering October 11. The white variety for the exact same month advanced for just a third day, including 2.8% to R3 735 a large amount.

The currency of Africa’s main economy depreciated nearly 5.2% against the money on Thursday along with extended the lose today, leading a decline among emerging-market money together with the Mexican peso for expectations that United states president-elect Donald Trump’s spending ideas will boost inflation in the country, leading to soaring US Treasury yields together with undermining the case for more dangerous government debt.

“The less strong rand is the key driver within the market at the moment,In . Wandile Sihlobo, the head of economic and also agribusiness intelligence at the Pretoria-based Gardening Business Chamber, proclaimed in an e-mailed response to questions.

White corn, which Southern region Africans use to make a preference food called pap, has dropped 29% given that reaching a record on January 20. Charges have declined as analysts forecast your recovery in the plant, which has been hampered by simply two straight numerous insufficient rains.

Farmers will increase the area planted using corn by 27% within the 2017 season that ends in April as foresee showers relieve your worst drought regarding record, the Crop Estimates Committee stated October 26.

“With the particular expected shortfall within white-maize supplies later this current year, buyers are finding the current levels attractive,” Sihlobo said, using yet another term for corn.

? 2016 Bloomberg

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Industry

Lonmin buys out Amplats’ investment in Pandora

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Platinum mining company Lonmin Plc mentioned on Friday it’d buy Anglo American Platinum’azines (Amplats) stake in their partnership Pandora mine to get between R400 million and R1 billion.

The acquisition of Amplat’s 42.5% stake, and that is subject to regulatory consent, will give London-based Lonmin a 80.5% stake in the my verizon prepaid phone, leaving Northam Platinum Limited with 7.5%.

“Through out Anglo Platinum with the decision making process, it is usually easier to progress points for the asset,” Stem Hunt analyst Peter Mallin-Jones said.

The acquisition will probably be paid for with 20% associated with free cash flow within the Pandora mine within the next six many years, with the final price dependant upon platinum prices.

For Amplats, a transaction brings the idea closer to its goal of offloading its labour intensive mines to focus on mechanised mines. The business completed the profit of the Rustenburg mines to Sibanye Golden last week, with just just one mine left unsold.

“Amplats had not been going to go for the development plans for the asset because it had change assets to focus on,” Mallin-Jones stated.

A recovery in jewelry prices and cost pieces helped Lonmin, which was struck hard by a five-month income strike in 2016, to post a narrowed once-a-year loss in May.

Lonmin stocks, which have climbed 150% in 2010, fell 10% in London plus 11.78% in Johannesburg. Amplats shares were along 3.58% on the Gauteng Stock Exchange.

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Industry

State of Record is nonsense – Eskom

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Eskom came out swinging due to its embattled CEO, Brian Molefe, on Friday following suggestions made in the State of Seize report released from the Public Protector a week ago.?

“Regarding the continued innuendo that Eskom continues to be giving special wedding favours to Tegeta Exploration plus Resources, the Eskom Table stands firm through the processes undertaken by the company to conclude plug-ins of its coal present agreements with its providers. We are satisfied which will due process had been followed and we may be proud of the financial savings achieved by the professional team to date,In said Eskom Chair, Dr Baldwin Ngubane.??

Ngubane was joined for the dais by Dr Billy Naidoo, the lead independent non-executive overseer of the Eskom board, CFO Anoj Singh, along with company secretary, Suzanne Daniels. Mark Molefe sat in the target market but rose to pay specific questions the place necessary.?

Naidoo made a powerpoint presentation which addressed the problems that had?been raised around the Tegeta prepayment together with contracts?it possessed received to supply Majuba, Hendrina, Arnot as well as Komati power stations. Naidoo reported categorically that all long term contracts were awarded in step with Eskom’s procurement policies, where conflicts of interest been around between board customers and related get-togethers, the conflicts were definitely disclosed and sorted out. ??

While presenting Eskom’s side with the story – much of which we can only take during face value nevertheless there is no tangible way of verifying – Naidoo repeatedly explained they were here to present the facts so they could possibly get on with running the company.?

The irony is that this briefing exclusively came about because of a frightening report by the Open public Protector. So where has got Naidoo been hiding during the last five months? The place was Ngubane, as lounge chair of the board, whenever all of these accusations begun swirling in early June? Where was Molefe if your highly incriminating, almost comical, interview with Koko regarding Carte Blanche aired upon June 12? (Molefe solely responded to the issue almost a month later on the group’s annual results presentation when enquired by Moneyweb.)?

None of the table has intervened until now to address issues that have been in the populace domain for a few months, and which have deservingly or wrongly infected the reputation of a utility and the way it’s going about conducting it has the business.?

But back to the down sides. Despite being sent multiple times on the reason for the prepayment to help Tegeta, there were no satisfactory answers. “It was for fossil fuel,” was the conventional response.?

The need for financial help implies the service provider would have a problem providing coal Eskom sought while in the time frame they demanded C otherwise, why ask for it??

Eskom describes various examples in its website that demonstrated that is a common practice for that utility to undertake.?

Some for example: “During the 2016 emergency, Eskom Table approved advance bills to the value of R400 zillion to enable suppliers to execute projects needed to supply fossil fuel.” (We extra the emphasis).?

And: “Furthermore, any prepayment in the form of credit was provided to Liketh within 2016 to buy equipment to practice coal from the Kleinkopje Pit 5 West.Half inch?

Also: “Eskom has also entered into loan product agreements to assist Rand Mines regarding capital expenditure.”?

As you can see from your above, there was a given purpose for the prepayments. In case pressed on the issue, no-one from Eskom could demonstrate what the money mortgaged to Tegeta was actually used in.?

The other gaping hole in their narrative involves Koko (Eskom’s Head of Generation). When prepayment was this kind of common practice, the reason did he reject any transfer of money to Tegeta in his interview on Carte Blanche? He could have just said Eskom needed the fossil fuel, as soon as possible, and this has been standard practice. The silence from the constructed executives and mother board members on this place was deafening regarding Friday.?

It has since come to light by amaBhungane?the fact that prepayment made to Tegeta has been approved in a matter of time by the Eskom board simply just two days before the business had to pay R2.Fifteen billion to acquire Maximum. The amount of the loan lengthened corresponds neatly because there are many money Tegeta was small to meet the purchase price regarding Optimum.?

The circumstances resulting in the sale with Optimum by Glencore also are highly disputed. In line with the Public Protectors’ report, Eskom and Glencore had made excellent progress in dealing with the issue of the amount Optimum received for the coal it supplied to the Hendrina power station.?

As far back as This summer 2016, Optimum had written to be able to Eskom invoking the “Hardship clause” in its contract, stating that “the difference between the price tag to produce coal and also the selling price to Eskom is roughly R166.40 [per tonne]” C State with Capture (5.Hundred fifty eight b. pg 137).?

This began an operation of negotiation and also evaluation by the not one but two parties (described in the report) which included Eskom agreeing to a new price in accordance with the fact Eskom and its advisers had extensively audited Optimum’s charges (5. 169 of the survey).?

The process went so far down the road that Eskom’s Executive-Procurement Panel approved a new plan on March 25 2016, and advanced the item to the Eskom board to get final approval.

Concurrently, Bob Molefe was appointed behaving CEO of Eskom on April 17 2016.?

The full Eskom board met regarding April 23 2016 but declined to make a decision to the matter.??

On May 19 2016, in a meeting concerning Molefe and the CEO for Optimum – a month just after his appointment – Molefe advised Optimum “Eskom would not be deciding any deal with OCM in addition to would continue imposing the existing coal produce agreement.”?

Molefe later on cited the reasons for the about-turn. In a letter to be able to Optimum on August 10, he written, “considering Eskom’s current financial position, which can be public knowledge, most of us unfortunately cannot afford to help reset the contract selling price, to that proposed by Optimum Coal Mine.” The communication added later this “It remains priority pertaining to Eskom, to ensure the security with the coal supply that will Hendrina Power Station..In.?

At this point, Optimum received exhausted its accessible credit lines and ended up being requiring R100 million monthly to keep itself making money.?

An uninformed reading within the letter would suggest Eskom was not able to afford to increase the worth of coal, nor could possibly it afford any sort of interruptions in supply to Hendrina, given that the business was load-shedding at the time.?

So Moneyweb squeeze question to Molefe for Friday: why have he do an about turn from the recommendation of his very own people? He appeared to be, of course, fully qualified for, as the executive venture of the organisation that will overrule recommendations of employees, but he decreased to state the reasons pertaining to doing so. Instead, this individual replied by indicating this was a question that should have been put to your ex by the Public Parent.?

What he did make apparent in his presentation with Thursday, was this Glencore CEO Ivan Glasenberg had in result, “held a gun in our head” in the negotiations forwards and backwards parties. “He threatened to close down the operations except in cases where they received a better price,” stated Molefe. This is an accusation fiercely disputed by Glencore.?

Molefe likewise refused to discuss the causes for the 58 calls between himself in addition to AJ Gupta at the same time as he has been embarking on the u-turn with Glencore. Nor did he or she reply to any questions around the nature of their relationship with AJ Gupta and the broader family. But he is on the file as saying “they are usually nice people” and that he “has found them once or twice.”?

Eskom summarised Molefe’s conflicts of interest inside following way:

?

But he is a member of the plank, the same one that fulfilled and then refused that will agree to a new plan with Glencore. But then again, none are any of the Guptas police officers of the government or maybe members of cabinet. Consequently, perhaps Eskom is lost the point. They need to investigate the relationships between the Guptas, Molefe and also the Board to establish objective and whether there has been any undue affect.

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Industry

SA’s mining appropriate slot says court final decision limits power of basic safety inspectors

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South Africa’s Chamber regarding Mines said on Tuesday that any Labour Court judgement overturning a government-imposed security stoppage at an AngloGold Ashanti quarry placed limits around the power of state personnel.

The industry in the world’ersus top platinum manufacturer has for years reported that government inspectors have been imposing irrelavent work stoppages over safety, costing billions of rand in lost output and also putting mines and work on the line.

The ruling worried a Section 54 protection stoppage – named to your regulation they fit in – at AngloGold’s Kopanang my very own last month.

The judge discovered that the blanket blockage of the entire my very own because of infractions relevant to tramming and the storage associated with explosives in one section – Point 44 – was excessive and should have been given to just that area of the business.

“We believe that the Labour Court has, in cases like this, clarified the limits for the powers of the inspectorate,” This Chamber of Mines stated in a statement.

The marketplace has in the past wanted to persuade the Department of Mineral Assets to avoid what it calling “unjustified stoppages” that are compounding marketplace losses in a market struggling with a supplies price slump.

The department of mineral assets did not immediately respond to emails and phone demands its response to the court ruling, which was designed on Friday.

The mines ministry offers justified the sheet stoppages, saying on a lot of occasions that they are needed to save lives.

With a good unforgiving geology, South Africa is home to any world’s deepest mines where workers labour up to 4 km (2-1/2 mls) beneath the surface.

Nevertheless, the market had been making fantastic safety strides, along with mining deaths slipping for eight immediately years – until this current year, with a spike during deaths that has elevated red flags.

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Industry

Clothing retailers: modest Christmas cheer

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Consumer spending remains?inside the doldrums in SA, with climbing living costs extremely weighing on purse strings.

This has been obvious in the poor income updates posted simply by major retailers C ?with the clothing category demonstrating more strain than food.

In the second district of this year, genuine (inflation-adjusted) household consumption expenses C a key driver of monetary growth C grew by a pedestrian 1% after a contraction of 1.7% in the previous three months, latest figures in the Reserve Bank show. ?Household consumption increase, which accounts for a lot more than 50% of SA’s GDP, provides muddled along considering that the 2016 financial meltdown.

At duration, consumers’ disposable earnings continues to be eroded?using a pile of debts from unsecured lender to store accounts, typically felt by the lower-to-middle salary segment that is additionally facing rising being out of work. ? ?

Underscoring consumers’ love affair having credit is that domestic sector debt-to-disposable income proportion has risen since 1995 from 57% so that you can 76.6% for the primary quarter of 2016 C it is actually too high for convenience.

These are the consumer headwinds which retailers are up against as they quite simply attempt to eke out increase a worrying economic climate that is growing in the glacial pace.

As Chris Gilmour, a trade analyst at Absa Huge selection & Investment Management applies it: “Consumers are confronting intense pressure. Their own spending is under pressure, almost certainly more than ever.”

Fashion retailers suffer

Fashion vendors are more vulnerable throughout tough times as individuals typically prioritise the devote to food rather than optional income-dependent items such as clothes, furniture and appliances.

Although most clothing vendors grew sales, it is undermined when removing out inflation in addition to effects of new retailers, resulting in negative gross sales growth for many shelves.

Even market darling Woolworths, that has long been shielded from pessimistic retail times car without any wide range of merchandise that panders to several LSM groups, is starting to feel the pinch.

In any grim trading revise on Friday, Woolworths’ clothes and general product business increased income by 2% but can be negative when invoice factoring its selling price inflation (a key metric to measure the price movement of merchandise) of 7% and innovative store space development of 2.9% for 19 weeks of its economical year.

Sasfin Securities mature retail analyst Alec Abraham states Woolworths’ downbeat trading update had been expected given individual pressures. “Woolworths has used reasonably well because of the broad consumer aim. If you want to buy all the way down, you can stay at the exact same store network. In addition, it has high-end merchandise intended for higher LSM consumers,In Abraham tells Moneyweb.

Even retailers that will mainly target center to lower-end consumers including Mr Price feel the pain. The no-frills retailer is feeling any?pressure with pedestrian sales growth of 1.4% to R8.6 mil in the 26 days to October Just one. Excluding space continuing development of 2.2% and value inflation of Twelve.4%, sales fell by simply more than 10%.

CEO Stuart Bird, that has been at pains to explain Mr Price’s inadequate showing, blamed some sort of unseasonably warm winter in addition to aggressive discounting by opposition for humdrum profits growth.

Bird says given that April, its challengers have been discounting merchandise aggressively, sometimes by as much as 70% journey full price. Because of this, their competitors have profited at its expenditure.

The theory was that in tough economic instances, consumers would exchange down to Mr Price, putting the retail merchant in good stead as compared with its competitors.

“Mr Value slipped on it has the niche of having popular clothes at an affordable price, yet H&M and Silk cotton On have pressed into this area and are taking it has the market share,” says Abraham.

Credit sales

Other retailers have been reach by the turning credit ratings cycle. The Foschini Set (TFG) and Truworths International, which has been traditionally reliant on credit ranking sales, have been on the spine foot due to the Nation’s Credit Regulator’s new price assessments, which look to rein in uncaring lending to increasingly indebted consumers. Read more info on the regulations listed here.

TFG’s credit sales, human resources 40% of its total income, grew by A single.4%. On the other hand, Truworths saw their credit sales (accounting for 70% of total revenue) decrease by 1% for the first 18 many days to October 31.

Clothing retailers have been gaining from food retailers who have invested in price (any practice by merchants keeping prices lower and accepting decrease margins from power savings and supply chain efficiencies to remain cut-throat), resulting in consumers getting more disposable money to buy clothes, states Abraham.

“Everything has against merchants,” says self-sufficient analyst Syd Vianello, adding which will apparel retailers own run out of room to purchase price. “Retailers are going to higher price points his or her gross profit margins (even of profitability) are beginning to decline. If this pattern continues they are going to make losses. Greater prices for backpacks are the new normal,Inches says Vianello.

Crucial festive months?

?There are few signs that there will be a recovery inside the retail landscape even with the crucial festive months looming. As a staffer in the fashion retailer inside Sandton City explains: “Christmas accents at stores have been hung late, unfortunately we cannot see much encourage this year.” ?

Supporting that view is Stefan Salzer, spouse and managing director at The Boston Consulting Class, who says special occasions is always a time when “folks do the little optional spending they can continue to afford.”

“In that sensation we may see a little a catch up impact on discretionary spending above December. I be expecting many retailers are functioning on very competitive strategies for the christmas season. They may have loads of stock left and will also be looking to make up several lost ground of their annual results,” suggests?Salzer.?

In order to ride outside SA’s retail malaise?Salzer says retailers have to accommodating when it comes to factors like their very own pricing of goods, that operate their organizations and where their products are sourced. “It’s also important to remain clear about the exceptional proposition that they?supply to the?customer,” this individual adds.?

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Zuma’s waning power exposed by stalled SA fischer plan

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South Africa’s decision to booth plans championed by Leader Jacob Zuma to build fischer plants has uncovered his waning expert.

News of the delay came out Tuesday when the Department of Energy said additional fischer power won’t turn on stream until 2037 below its “base case” scenario, 15 years later than formerly projected. While Zuma states reactors are key to treating power constraints around Africa’s most-industrialized economy, Finance Reverend Pravin Gordhan, economists and evaluations companies warn this South Africa can’t afford these people now.

“Essentially the project continues to be indefinitely postponed and also the final decision on atomic power will only be utilized by Zuma’s successor,Inches?said Robert Schrire, a new politics professor with the University of Cpe Town. “This is a great success for economic rationality together with political expediency and mirrors the new political balance of a weakened Zuma management.”

Zuma is scheduled for you to step down because leader of the overseeing African National Our lawmakers next year and his secondly term as us president ends in 2019. Calls for them to quit have increased as political missteps and a feud with Gordhan in the tax collection agency roil markets. Compounding his particular woes is a top court ruling he violated his oath of office by refusing to repay individual funds spent on replacing his private property.?The nation’s investment-grade credit rating influences balance.

Zuma has at this point weathered the grievance because most members of a ANC’s National Executive Board remain loyal to your pet.

Gordhan’s victory
Gordhan won a win this month immediately after prosecutors withdrew fraud charges next to him for presumably approving a old age payment to a taxation agency official, two days before he was due to appear in courtroom. The Democratic Alliance, the leading opposition party, alleged that Zuma intended with all the court case as a pretext for firing Gordhan and in accomplishing this remove the biggest obstacle to his nuclear ambitions.

The party as well says that Zuma may have witout a doubt signed a technique nuclear power supply handle Russia and that the course would be used to advantage his own financial passions and those of his / her allies. The president plus the government deny your allegation.

The appointment involving Gordhan, itself, almost a year back was a major strike for Zuma. The president has been forced by his party and organization leaders to replace Plusieurs van Rooyen, a little-known lawmaker, merely four days right after his decision to him as pay for minister caused this rand and the nation’s includes to plunge. After that Zuma also acceded to Gordhan’s demand for a new board during state-owned South African Air route.

Revised plan
“The revised energy approach?will give some comfort to those concerned about the danger of reduced influence with institutions such as the Treasury in addition to central bank for a more presidential system,In . said Mark Bohlund, Africa economist with Bloomberg Intelligence working in.

Bongani Ngqulunga, Zuma’s spokesman, referred problems on the power want to the energy department. The blueprint wouldn’t have been launched without the government’s assistance, he said. ?

Energy Minister Tina Joemat-Pettersson advised reporters the power system was updated to reflect developments in the power industry, including variations in technology costs along with lower-than-anticipated demand.?The version plan will be selected next year.

Eskom Holdings SOC Limited., which supplies about Ninety percent of the nation’s electric power, isn’t shelving their nuclear plans but. The state utility will continue seeking requests for proposals to build brand new reactors?pending the completion of the energy plan, as it could ultimately determine they will be needed the moment 2025, Matshela Koko, its group govt for generation, advised reporters. It won’t be qualified to fund a quantity of nuclear reactors itself together with would need Treasury guarantees to advance them, according to Dennis Dykes, chief economist at Nedbank Group Ltd.

The dynamics of ability in South Africa are generally shifting, according to Keith Gottschalk, any political scientist on the University of the Western Cape in Cape Town.

Zuma is “still capable to out-vote and out-maneuver his opponents in the ANC, but the installation pressure has supposed he has not been able to always get his or her own way all the time,Inch he said. “He is in the process down like a slow-leaking hole.”
? 2016 Bloomberg L.P

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Industry

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Industry

Consolidate industry, says PPC CEO

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Darryll Castle, PPC Founder

South Africa’s cement industry could benefit from consolidation and there is too many players is bigger of the market, in line with Darryll Castle, the chief account manager officer of the state’s largest producer, Paid advertising Ltd.

The company is “keeping some sort of an eye on the whole market,” Castle claimed in a phone appointment on Wednesday, following declining to inquire into whether PPC is within talks with competing AfriSam Group Pty Ltd. The two main Johannesburg-based companies have revived discussions about a merging almost two years once talks were discontinued, people familiar with the matter said this week.

“There’s somewhat clear rules and regulations about when you need to state things, and there’s not even attempt to announce,” Citadel said. “In the longer term there’s no doubt that there needs to be some kind of loan combination in the industry and you can guarantee that as PPC may well benefit us for the reason that we are the big person.”

South Africa’s construction industry and also infrastructure spending is under pressure as Africa’s most industrialised economy heads for its weakest annual progress since 2016. There are all 5 producers operating in the united states, and consolidation is needed cut costs and develop efficiencies for the still left competitors, the Founder said.

A combination of PPC and AfriSam is likely to possess the support of the continent’s premier fund manager and AfriSam’s controlling shareholder, anyone Investment Corp., according to the men and women familiar with the matter, exactly who asked not to be identified because the deliberations usually are private.

Supporting margin
PPC is usually focusing on reducing charges to support its gain margin while it tidies up projects in Nigeria, Ethiopia and the Democratic Republic of Congo, A kind of fortification said. The company expects cement prices in order to bottom in its housing market and gradually surge in 2017.

First-half headline earnings in each share plunged 66% for you to R0.14 as funding costs increased, the company said in an early on statement. Sales received 15% to R5.2 billion ($364 million), while the debt-to-earnings just before interest, taxes, decline and amortisation ratio has been cut to 2.Half a dozen times from 3.8 times after a liberties issue.

The shares?sealed 2.04% higher from R6.00.

The earnings decrease caps a tumultuous a few months in which the company protected a R2 billion assets and guarantee capability and raised R4 billion dollars in a rights concern after S&P World Ratings cut it’s credit rating to useless, triggering early redemptions by just bondholders and raising assets concerns. The company’s personal debt had more than tripled over three years mainly because it poured money in new African projects while battling competitiveness, slowing economic progress and falling price tags in its home market.

“The effective completion of the legal rights issue allowed us to significantly cut down debt levels in addition to strengthen our sense of balance sheet against the cyclical character of our business,” Castle said inside statement.

? 2016 Bloomberg L.P

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