Cape Town - A roundup of Thursday's must-read financial and economic news.
'Another Steinhoff' rumour fuels property stock alarm on JSE
Property stock prices in general suffered a steep dip on the JSE in the morning, before recovering somewhat, on rumours that a US-based research firm was investigating a SA company.
The sell-off of property stocks was fuelled by rumours that Viceroy Research’s next target is a South African property company, according to EasyEquities trading specialist Bryan Stewart.
Viceroy Research released an exposé on Stellenbosch-headquartered global retailer Steinhoff in December, shortly after its CEO Markus Jooste abruptly resigned amid an accounting scandal.
Speaking to Fin24 by phone on Thursday, Stewart said the Viceroy rumours have made investors “nervous” and the sell-off has impacted the profits of the property companies, which have been performing well.
In other Steinhoff news, Parliament’s finance oversight committee wants to start hearings into the scandal by late January, amidst calls for Markus Jooste and Christo Wiese to testify.
Coca-Cola SA bottling unit severs ties with McKinsey over Gupta probe
Coca-Cola's South African bottling unit isn’t awarding business to consultants McKinsey & Co. pending the outcome of probes into the US consultancy’s work involving the politically connected Gupta family.
Coca-Cola Beverages South Africa hasn’t given a contract to McKinsey since June 2017 and has no historic work ongoing with the firm, communications director Tshidi Ramogase said in emailed comments on Thursday. “This decision will stand until investigations are complete,” she said.
Researchers show WhatsApp groups can be hacked
Despite WhatsApp’s secure end-to-end encryption for messages, German researchers have found a loophole that could allow hackers to worm their way into WhatsApp's group chats.
But management at WhatsApp’s parent company, Facebook insisted that there was no security threat.
The researchers found that anyone who controls the app’s servers could insert new people into private group chats without needing admin permission.
After an initial story was published by Wired Facebook’s chief security officer, Alex Stamos tweeted that it was not possible to access WhatsApp group chats.
“Read the Wired article today about WhatsApp – scary headline! But there is no a secret way into WhatsApp groups chats,” Stamos said on Twitter.
US group adds Mike's Kitchen to its menu
South African family restaurant chain Mike’s Kitchen has been bought by US-based NRD Capital.
NRD Capital is expanding its footprint and this is its first acquisition in South Africa and on the African continent. Its headquarters is in Atlanta, Georgia.
“Our focus at NRD Capital is to invest in quality brands and provide strategic and operational expertise to create sustainable value,” Aziz Hashim, founder and managing partner of NRD, said in a statement.
Making sense of the rand's movements
The rand seems to be in a state of confusion at the moment, according Bianca Botes of corporate treasury management at Peregrine Treasury Solutions.
In her view, the local unit is currently doing a fine balancing act between politics and economics.
After trading 0.87% weaker at R12.44 to the US dollar at close of local trade on Wednesday, the rand traded slightly stronger during early Asian trade on Thursday morning. Its expected range for the day is between R12.30/$ and R12.55/$, according to NKC African Economics.
The rand was trading at 12:45/$ at 16:00.
"The dollar had given up some ground yesterday (Wednesday) following China’s announcement of a potential change in its US Treasury buying strategy, but quickly recovered, and the stronger dollar and the continued Zuma-saga continue to weigh on the rand," said Botes.
"However, the rand is supported by stronger commodity prices and the afterglow of Cyril Ramaphosa’s NEC victory."
She said markets are also disappointed by President Jacob Zuma escaping a much-anticipated recall by the ANC's national executive committee (NEC) on Wednesday.
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