South Africa

Prosus CEO exit leaves Tencent elephant in room

18 Sep 2023

Bob van Dijk has quit as boss of the $380 bln Chinese giant’s top investor. Interim CEO Ervin Tu can call for more asset sales to boost Prosus’ returns. But without a plan to move on from a status quo where Tencent makes up three-quarters of the portfolio, its valuation will lag.

Prosus’ juggle leaves bigger worries up in the air

27 Jun 2023

The $147 bln Dutch investor is ending its complex shareholder structure with South African parent Naspers. It’s simpler for investors, and enables more buybacks. But the group will still have a stake in Tencent it can’t easily sell and lopsided governance, meriting a discount.

South Africa growth is derailed, Ramageddon or not

5 Dec 2022

President Cyril Ramaphosa is under pressure to resign over a graft scandal. The country’s strong finances and small exposure to foreign investors will prevent a full-blown crisis. But his economic reforms are over, whether he stays or goes.

Naspers swaps one Tencent headache for another

17 Nov 2022

The South African investor’s valuation discount to its $100 bln stake in the Chinese tech giant has narrowed since it started selling the shares to fund buybacks. But Tencent's plunging value is another factor. Though Naspers' prized asset has become a drag, exiting is tough.

UK’s Bain ban sets oddly high moral bar

3 Aug 2022

Britain has barred the consultancy from public contracts due to misconduct in South Africa. The nod to ethics is overdue but tricky. Rivals McKinsey and KPMG, hit by related scandals, escaped UK censure. A similar stand against global skulduggery would red-card much of the City.

Naspers “put” tackles one of its Tencent problems

27 Jun 2022

The South African firm and its Dutch offshoot will buy back stock by slowly trimming their $133 bln stake in the Chinese tech giant. Tax liabilities and clunky governance remain valuation drags. But investors can worry less about Naspers blowing its riches on other startups.

Gold Fields shells out to beat the ageing process

31 May 2022

The Johannesburg miner is buying Canada’s Yamana in a $6.7 bln all-share deal, creating the world’s fourth-biggest bullion producer. Scant cost savings don’t justify the premium. Given his middle-aged mines, CEO Chris Griffith has little option but a target with a longer future.

Africa’s lofty data-centre prices have solid roots

4 Jan 2022

After deals in Nigeria and Kenya, $50 bln U.S. operator Digital Realty is buying most of South African rival Teraco. The $3.5 bln price tag is eye-catching given the risky location. But the continent’s growing population and rising data demand make the long-term numbers add up.

FX risks dilute appeal of Heineken’s Africa tipple

15 Nov 2021

The Dutch brewer is buying South Africa’s Distell for $3 bln and taking over Namibia Breweries. With modest cost savings, CEO Dolf van den Brink can make a spirited return. But he’ll have to flog more Amarula liquor beyond the continent to ease the headache of wobbly currencies.

African telcos finally get their big fintech prize

8 Nov 2021

After years of delay, Nigeria’s central bank is letting phone firms offer basic banking via handsets. For the regulator, it’s a way of staying relevant as consumers dabble in cryptocurrencies. For operators like MTN and Airtel Africa, it’s a multibillion-dollar payday.

Malaria vaccine can protect kids and economies

7 Oct 2021

The WHO approved its first jab for the deadly disease. Its primary target is the 274,000 mostly African children who die each year. But malaria also inflicts $12 bln of economic pain. That makes the shot’s roughly $1 bln annual cost one of the smartest sub-Saharan investments.

South Africa is litmus test for climate solidarity

15 Sep 2021

Despite its relatively small size, the Rainbow Nation’s economy is a big CO2 emitter. Yet Pretoria can ill afford a switch from coal due to soaring public debt. A $10 bln aid plan could be the answer, if lenders can close their eyes to the financial and political risks.

Prosus pushes hard on Indian fintech door

31 Aug 2021

The tech investor is paying $4.7 bln for payment processor BillDesk. That transforms its PayU operation and provides a profitable base to extend credit. The multiple of 19 times revenue is punchy, but a fraction of Paytm. And it’s a strong foothold in a big emerging market.

South Africa has no money to throw at its problems

15 Jul 2021

The Rainbow Nation is suffering its worst civil unrest since the end of apartheid in 1994. The ruling ANC’s usual response to cracks in the social fabric is to fill them with new subsidies. With debt at 80% of GDP and rising fast, that has a limited shelf-life.

South Africa’s arm of the law gets slightly longer

29 Jun 2021

Jailing ex-President Jacob Zuma for contempt of court is far from a conviction. Still, it’s another sign of the country’s institutions losing patience with graft and waste. With his predecessor neutralised, Cyril Ramaphosa can speed up reforms, including at power giant Eskom.

Anglo spinoff points to darker future for coal

7 Jun 2021

The mining giant’s thermal coal unit, Thungela, was valued at just $250 mln on its market debut. That’s a third of the EBITDA its South African mines may earn this year. It’s a stark reminder of the black stuff’s rapidly declining worth, and of public investors’ aversion to it.

The Exchange: South Africa’s prospects

25 May 2021

Johannesburg Stock Exchange CEO Leila Fourie tells Swaha Pattanaik how South Africa’s economy has coped with Covid-19. In an interview recorded for the International Economic Forum of the Americas, she also flags sectors that will rebound fastest and discusses ESG investing.

Poundland’s knock-down IPO is reassuringly cheap

13 May 2021

Pepco, owner of the chain that flogs cheap toiletries, is listing with a 4.8 bln euro price tag. Links to scandal-hit Steinhoff and weak sales growth justify a cut-price valuation of below 10 times this year’s EBITDA. If it can grab more market share, the discount won’t last.

Naspers goes all-in to crush South Africa discount

12 May 2021

The $100 bln internet group will swap shares with Dutch offshoot Prosus, removing some pressure on its stock. The resulting cross-shareholding is as far as CEO Bob van Dijk can go. Shrinking Prosus’ persistent shortfall to its $212 bln stake in China’s Tencent is a harder task.

Africa’s digital payments race becomes a scramble

5 May 2021

The pandemic has brought the region’s mobile-based money networks and their 159 mln users to a crossroads. Airtel and MTN may spin off their payment arms. Banks and card giants like Mastercard are joining in. The victors will hold sway over an increasingly cashless continent.