Browsing: premium

Earnings season in earnest

Countries

The focus over this period, undoubtedly, is on a number of listed corporates reporting their earnings. Taking a step back, Centum, BAT Kenya and…

Zimbabwean banks sitting on billions in hard currency but wary of lending it

Banking

The banks themselves have little confidence in each other which is demonstrated by the absence of a real interbank lending market.

Perhaps most striking is the high degree of regulatory risk. Regulatory risk is one where a change in laws and regulations will materially impact a security, business, sector, or market. A change in laws or regulations made by the government or a regulatory body can increase the costs of operating a business, reduce the attractiveness of an investment, or change the competitive landscape in each business sector. In extreme cases, such changes can destroy a company’s business model.

Investing in distressed securities: The case of Sibanye Stillwater

Business

Since then the company has pursued a highly aggressive growth strategy constituting of both organic and acquisitive growth. Sibanye in a very short space of time acquired the Cooke operations from Gold One International in 2013 and the Burnstone project from Wits Gold the following year. The aim of this aggressive growth strategy was to produce more sustainable gold operations. 

The story of growth did not stop there. 

Soon the company set its sights on the platinum sector and began to snap up various interests and operations in that space. In 2016 Sibanye acquired the Aquarius Platinum’s Rustenburg operations namely Kroondal mine as well as the Platinum Mile treatment facility in South Africa and in Zimbabwe it took over the Mimosa joint venture with Impala Platinum. Later that year the company also bought the Rustenburg operations of Anglo Platinum.

Boom in commodity prices has global mining shares surging

Investing

Anglo American is a leading global mining company, with a world-class portfolio of mining and processing operations and undeveloped resources, with more than 95,000 people working for it around the world, in 15 countries. This company on the 29th of July announced its intention to disburse an additional US$2 billion to its shareholders through what it described as an on-market irrevocable and non-discretionary share buyback programme of $1 billion together with a special dividend of $0.80 per ordinary share, equal to $1 billion. All in all, the company intends to return at least US$4 billion in cash to its shareholders when what the company describes as its base dividend of US$4.1 billion is considered. 

Anglo American will repurchase up to 204.3 million shares in terms of the buy-back programme that started August 12 and ending no later than 14 February 2022. The US$2.1 billion ordinary dividends is being paid out of an interim attributable profit of $5.2bn. Compared to $471m in interim profit in 2020, that is a staggering year-on-year improvement of just over 1000%. 

Can Zimbabwe farm its way back to economic prosperity?

Agribusiness

The reasons for the current position are both economic and political. The intent of this article is to explore the economic side of the country’s decline with the view to put forward new areas of economic significance that can give rise to the recovery of the country’s fortunes.

These new areas if adopted and implemented will most certainly result in economic green shoots and with time they will transform into major industries anchoring the economy on the same scale and extent that mining and agriculture did in the former years.

The political side of the equation of Zimbabwe’s economic decline has been written about extensively and it is beyond the scope of this article. However, it must be noted and borne in mind that it is immensely difficult to separate politics from economics as these two concepts enjoy a very strong symbiotic relationship.