Top6 on Fin24: SARB keeps repo at 6.75%, Eskom could collapse SA economy, Viceroy unmasked

Cape Town - A roundup of Thursday's must-read financial and economic news. 

SARB keeps repo rate at 6.75%

SARB governor Lesetja Kganyago

At its first meeting for the year, the South African Reserve Bank's (SARB's) monetary policy committee (MPC) decided to leave the repo rate unchanged at 6.75%.

The repo rate is the interest rate at which the SARB lends money to commercial banks.

Due to the bank's decision, the prime lending rate - the rate at which banks start lending to clients  - will be 10.25%.

READ: SA Reserve Bank keeps repo rate unchanged

Eskom the straw that breaks SA’s back

Finance Minister Malusi Gigaba warned on Thursday that if Eskom is not dealt with urgently, South Africa's whole economy could collapse by the time Team SA returns from the World Economic Forum (WEF) in Davos.

Gigaba said at a pre-WEF breakfast meeting in Johannesburg that the fiscus simply does not have the funds to bail out Eskom. He hinted that a major shake-up is on the cards for the power utility in the next few days.

"There would be no currency, and no economy for the country if Eskom went belly-up," Gigaba warned, adding that the crisis is extremely serious.

READ: Eskom could collapse SA economy, warns Gigaba

At the same breakfast Gigaba spoke out against the protest at retailer H&M, saying that it would undermine South Africa’s investment profile.

Gigaba said it is understandable there is a great deal of rage over H&M's controversial advertisement, which showed a black child in a sweatshirt with the words 'Coolest monkey in the jungle' printed on it. But he urged South Africans to engage H&M in a legal manner, within the framework provided by the Constitution.

READ: Gigaba: H&M violence undermines investment in SA

Viceroy unmasked

The mysterious short seller who flagged financial irregularities dogging Steinhoff [JSE:SNH] has stepped out of the shadows.

Fraser Perring, a former British social worker who founded Viceroy Research, said in an interview on Wednesday in New York that he and colleagues, Gabriel Bernarde and Aiden Lau, were putting finishing touches on a research report questioning Steinhoff’s financials when the South African retail giant said on December 5 it would conduct a probe of its accounting.

The next day, hours after the retailer announced that Chief Executive Officer Markus Jooste had resigned, Viceroy tweeted a link to its 37-page report detailing how Steinhoff had used off-balance-sheet entities controlled by current and former company insiders to obscure losses and inflate earnings.

READ: Viceroy short seller who flagged Steinhoff irregularities steps forward

#Guptaleaks: Companies Commission lays charges against KPMG, McKinsey and SAP

SA's Companies and Intellectual Property Commission has laid criminal charges against the local units of audit firm KPMG, management consultants McKinsey and software giant SAP SE.

The cases were opened with the South African Police Service between November and December for contraventions of the country’s Companies Act, the regulator’s spokesperson Tshiamo Zebediela said in an emailed response to questions on Wednesday.

The CIPC “has been looking into these companies since July 2017”, she said.

The CIPC is one of the first local regulators to bring criminal complaints against the companies for their dealings with entities linked to the Gupta family, who are friends of President Jacob Zuma and in business with his son, Duduzane. Zuma and the Guptas have consistently denied any wrongdoing.

It comes as the country’s prosecutors move to freeze assets held by McKinsey and a company linked to the Guptas.

READ: SA companies regulator charges KPMG, McKinsey, SAP

Team SA ready for Davos – Ramaphosa

Deputy President Cyril Ramaphosa on Thursday said Team SA is hoping to woo investors in Davos with the message that South Africa is serious about rooting out corruption, and that renewal is taking place in the country.

Ramaphosa will again lead South Africa’s delegation to the World Economic Forum (WEF) in Davos, Switzerland, an annual meeting of business and political elites.

But he admitted at a pre-WEF breakfast briefing that South Africa's delegation will have to address a host of challenges to convince wary investors that the tide has turned in South Africa.

Decisive action in tackling corruption and state capture is key to winning over sceptical investors, he said. "It is totally unacceptable that business(es) owned by the nation, set up to advance the interests of South Africans, have been hijacked and captured by certain interests," he said.

READ: We'll win over sceptics in Davos – Ramaphosa

Spike in porn website after missile warning cleared

Pornographic video website Pornhub has reported a sharp dip in traffic followed by a sharp increase in Hawaii, after residents were erroneously warned of an incoming ballistic missile. 

On Saturday at 08:07 residents of the US state received a text message stating that a ballistics missile was on its way to the island and that they should seek safe shelter immediately.

This was a false alarm.

On Wednesday, Pornhub, one of the world's largest porn websites, said traffic to its sites from the area had decreased after the message was sent, then spiked after the all-clear was given.

READ: Pornhub gets traffic spike after false ballistic missile alarm

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