Author: Laurence Sithole

I am a financial services professional with a strong background in diverse areas of banking. My skill set includes among others International Banking, Trade Finance, Commercial Lending, Customer Service, Finance, Banking, Corporate Finance, and Investment Banking. Africa is my home and I am passionate about its development,

Platinum bars. Sibanye Stillwater is the world’s largest primary producer of platinum, the second-largest primary producer of palladium and a top-tier gold producer. www.theexchange.africa

Given these enabling circumstances, KKR offered to buy out RJR and reorganize the business and optimize value from its operations. This initial attempt was not warmly received, and RJR sought other investment companies to purchase it. What then ensued was what members of the investment community call putting the company in play.

This describes a scenario where one company is actively pursued by several suitors who desire to purchase it. In the end KKR triumphed albeit having paid a massive premium for the company. Unfortunately, the company did not realize the gains that it had envisaged it would.

The Nabisco operation of the company was spun off into a separate entity and the tobacco interests were also kept separate. All the gains the company anticipated it would make were swallowed up by tobacco lawsuits so that by 1994 the KKR had all but written off its investment in RJR Nabisco.…

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Zimbabwe’s Finance Minister Mthuli Ncube. His national budget statement for 2022 comes amidst high inflation but is hailed as being pro-poor. www.theexchange.africa

Treasury is expected to continue its trajectory f fiscal consolidation and discipline together with increasing incentives to grow investments in value chain sectors and stability in power supply.
On the taxation front the budget was expected to provide relief to the poor who make up at least 49.9 per cent of the population of the country. This is particularly significant because it has been said on several occasions that Zimbabwean people are among the most taxed in southern Africa.
This is partly the legacy of the minister of finance’s austerity for prosperity policy which resulted in a largely resented 2 per cent transfer tax on all transactions. There have been calls for this tax to be repealed and the tax-free threshold to be increased.…

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A cement brand by the PPC. The company is seeing a pick-up in demand in its home market with growing investor confidence. www.theexchange.africa

When commodity prices began to soften in later years it seemed more of a blunder to have diversified the metals portfolio of the business than it appears a stroke of genius today.

With softening metal prices came the need to conserve cash and so dividend flows dried up. The company did not cease its expansion plans going so far as to pile on large amounts of United States dollar-denominated debt purchasing US-based platinum miner Stillwater and swallowed up Lonmin in the process. The share price then cratered when news broke that the company had experienced fatalities at its South African mines. In some circles of the investment community, others joked that they would not invest in Sibanye Stillwater as a matter of moral principle.

The share price went down reaching an all-time low of around R 7.…

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A construction project in South Africa. Companies in this sector have hobbled along for a decade. www.theexchange.africa

In the cement industry, the South African Government has taken a protectionist stance, banning the import of cement especially for infrastructure projects that it is sponsoring. The ban came from Treasury in October.
This decision has been widely celebrated by the cement sector which has been struggling since 2014. This period is profound in that cheap cement flooded the South African market and reduced the profits of local producers.
These cement producers according to industry body, Cement and Concrete South Africa have been under siege from cheap imports from Pakistan, China, and Vietnam. …

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Caledonia Mining Plc is set to list on the Victoria Falls Stock Exchange. VFEX trades exclusively in US-denominated securities. [Photo/ Caledonia Mining Plc]

The pre-listing statement specifies that the VFEX listing is a secondary one and will be done by way of the introduction of depository receipts representing the company’s shares that cannot be directly traded in Zimbabwe as its primary listing is on the respectively.
Investopedia defines a depositary receipt as “a negotiable certificate issued by a bank representing shares in a foreign company traded on a local stock exchange. The depositary receipt gives investors the opportunity to hold shares in the equity of foreign countries and gives them an alternative to trading on an international market.”
A depositary receipt allows investors to hold shares in stocks of companies listed on exchanges in foreign countries. It avoids the need to trade directly with the stock exchange in the foreign market. Instead, investors transact with a major financial institution within their home country, which typically reduces fees and is far more convenient than …

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L Sithole Implats Play For RBPlat Signals Consolidation In Platinum Sector 2

According to the SENS report both companies are said to have completed reciprocal due diligence exercises towards a transaction implementation agreement”. The statement goes on to mention that shareholders will be kept abreast of the development around this transaction as they arise.
As is the case, whenever there is impending corporate action from a transaction of this kind investors are urged to take care when trading their shares.
This move by Impala Platinum (Implats) to buy out all the issued shares of Royal Bafokeng Platinum (RB Plats) signals consolidation of the platinum sector on the kind of scale last seen when Sibanye Stillwater acquired Lonmin in 2017. …

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Coal mining. Exxarro resources is caught in the middle in the pursuit of a greener earth and universal reliance on renewable energy. www.theexchange.africa

The pursuit of a greener earth and universal reliance on renewable presents a unique dilemma for countries in Sub Saharan Africa which rely heavily on energy provided by coal, shale, and other fossil fuels but also their economic livelihoods depend on the black gold.
The elimination of coal and related energy sources would severely prejudice economies that constitute SSA which are still developing or emerging.
It is against this background that the outgoing Chief Executive of the largest coal miner on the JSE, who is also the President of the Minerals Council is on record for saying that African countries should be allowed to make the transition from fossil fuels to greener renewable energies at their own pace. …

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A coal engine at the Hwange Colliery mines. The giant company could have powered Zimbabwe and the larger Southern Africa region. www.theexchange.africa

The company, given the first resources boom and the second one currently being enjoyed, should be awash with cash. Instead, the company is heavily indebted to the tune of between US$70 million and US$160 million which it attempted to expunge unsuccessfully through a rights issue in 2015.

The company has been limping along financially for years. In 2019 it was reported that its liabilities exceeded assets by US$19 million. This development made it doubtful that the company could carry on as a going concern after having been placed under judicial management.

The recent interim financial results presented by the company offer some consolation to investors who have been suffering for long.…

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Pupils in class in Zimbabwe. Rwanda is targeting Zimbabwean teachers to teach the East African nation. www.theexchange.africa

Zimbabwe’s education sector is highly regarded worldwide and as far back as 2011, the country had a 97 per cent literacy rate of people above the age of 15.

The difficult economic times in Zimbabwe have meant that there is little to nothing in terms of opportunities for Zimbabwean professional talent in general with teachers and healthcare workers specifically involved in engagements with the government over better working conditions.

These engagements have often turned acrimonious with devastating and unfortunate consequences. In a very strange turn of events, the government is said to have offered striking medical and healthcare workers access to free Wi-Fi internet as an incentive for them to come back to work.…

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Zimbabwe is cracking down on individuals it terms illegal forex traders. www.theexchange.africa

This means that these individuals would not be able to access financial services from the banks for a period of up to two years. The matter is still unfolding, and further developments will be advised in due course.
Zimbabwe, after attaining the highest inflation record in world history and especially for a country that was not involved in an armed conflict, took the decision to demonetize its defunct currency in favour of a basket of foreign currencies led by the United States dollar.
After a period of relative economic stability, the country took the decision to reintroduce the Zimbabwe dollar initially as a surrogate currency known as the Zimbabwe bond note. This was a response by the monetary authorities to a shortage of foreign currency and bank notes. …

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