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South Africa

New round of speculation against rand threatens

SA Reserve Bank boss Tito Mboweni's attempt (yesterday in Pretoria) to kill off speculation over who will be at the helm of the bank after August next year (when his second 5-year term runs out), has failed dismally.

Instead, it has opened the door for a new wave of speculation - and the beginning of another round of downward pressure on the rand.

Remember, you heard it first on this blog!

Any government with a leadership just half in control, would have issued a "calming and clarifying statement" on the issue of central bank leadership (under the same circumstances).

But, the differences between the lefties and the middle-of-the-roadies are clearly too deep-seated, and the fight for power too intense, to make such a statement possible in SA today.

After Tito's press conference, it will now not take the markets long to latch on to the fact that the defences are down (in disarray). And that a "new era" of slacker monetary policy is staring us in the face.

Once this has dawned, the speculation against the rand will start in all seriousness. Not long now...

When it happens, don't blame Tito. Blame Mbeki and Zuma, who can't bury their differences for the sake of the country.

For the record: The rand stood at 11.28 to the Euro at the time I wrote this.
3.9.08 08:29


Denel makes it into Top 100

Denel made it onto international magazine Flight Global's list of Top 100 aerospace manufacturers in the world, based on the previous year's turnover. But only just - in 100th position.

Once again, all the familiar names are at the top of this year's list: Boeing, Airbus, Bombardier, Cessna and Gulfstream.

Journalist Niall O'Keeffe interviewed outgoing CEO of Denel Shaun Liebenberg about the achievement. Here is what was said, and published on the website:

"Hit hard by cuts in defence spending, South African equipment manufacturer Denel is pursuing a long-term recovery plan focused on rationalisation and industry collaboration. Its appearance in the Top 100 (aerospace manufacturers in the world) - albeit at number 100 - suggests these measures are bearing fruit.

The state-owned company was created in April 1992 as part of a major defence industry restructuring. It inherited most of the manufacturing and research facilities of the Armaments Development and Production Corporation. It also inherited the South African National Defence Force as a major customer.

However, a less fortunate inheritance lay in what former chief executive Shaun Liebenberg has termed "a subsidy culture". Efforts to transform this into a "commercial" culture are ongoing.

According to Liebenberg, Denel's strategy has five pillars:

* to secure privileged access to a minimum portion of South Africa's defence spend
* to partner state agencies on business planning and export marketing
* to grow viable businesses based on technological leadership
* to secure equity business partnerships with global players and
* to raise capabilities and productivity to "world-class levels".

Stand-alone business units include:

* Denel Aviation
* Denel Saab Aerostructures
* missile manufacturer Denel Dynamics Defence Land Systems
* Denel Munitions and
* Mechem, which provides landmine removal and contraband detection services.

In 2001 a 51% stake in Denel's aero-engines business was sold to Safran. A subsequent collaboration drive saw Denel sell a 40% stake in its unmanned air vehicle business to Advanced Technologies & Engineering, a 51% stake in Denel Munitions to Rheinmetall Defence and a 70% stake in its optronics business to Carl Zeiss. The aerostructures business rebranded after Saab took a 20% stake.

Aero-engines apart, these divestments were led by Liebenberg, who on 1 July became Rheinmetall Defence's head of international business development.

Having cut losses by more than 60% between fiscal year 2006 and FY2007, he leaves new chief executive Talib Sadik with a tough act to follow."
13.8.08 00:33

Old Mutual takes a knock

A botch-up by employees cost South African insurer Old Mutual 107 million pound sterling, the UK website Timesonline reported today.

Staff sold Bermudan-based products to its Asian investors with a guaranteed rate of return, only to have some of its US staff fluff their defence strategy for what to do if markets fall.

"Old Mutual, listed in London as well as Johannesburg, told investors today that it was only 60 per cent covered for falls in Asian stock markets. In real money that means a hit of £107 million - or more if Asian markets continue their precipitous decline," the website said.

Today's hiccup on annuity guarantees at US Life is the second setback to Old Mutual this year.

Barrow, Hanley, one of its American investment boutiques, has already suffered from an ill-fated $1 billion investment in Bear Stearns, reported Timesonline (
7.8.08 21:01

About Naspers and Usmanov

I wonder, has anyone in South Africa noticed (yet) that Naspers is in bed with the controversial Russian billionaire Alisher Usmanov?

Fair enough, Naspers was there first. Usmanov only came last week. But, whether the two ended up in bed by choice, or by co-incidence doesn't matter now.

All I'm saying, is: Suddenly Naspers has a link to the Arsenal Football Club, the "unhappy" diamond dealings between Usmanov and De Beers, and a lot more. Because, you always sleep with everyone your partner has slept with before.

For the complete list of what Usmanov has been up to, go to Wikipedia, or use the link I provided in the story below.

* Also read what I wrote on 27 July on Usmanov and Naspers under the title "Shares change hands at Russian site".
5.8.08 14:00

Naspers' roundabout way into big-time search

If this post by a Russian called Yakov on his blog at is anything to go by, Naspers' new "partner" in the project could just turn out to be a lucky break for Naspers in Russia.

After acquiring a minority stake in Digital Sky Technologies (DST), majority owner of Russian portal (in which Naspers holds 32%) recently, Alisher Usmanov is now apparently trying to buy a 10% - 20% share in Russia's leading search engine Yandex.

Should that happen and assuming Koos and Alisher strike up a good working relationship, Naspers could just be edging closer to an involvement in Russia's most successful search engine, which is also Europe's third most used search engine.

Now, would that be something?

Usmanov is not just anyone. (That's why I think Koos would enjoy his company.) For a nice portrait of Usmanov, check Wikipedia out here:

And here a shortened version of Yakov's post (dated 4 August):

"Alisher Usmanov, founder of Metalloinvest holding and owner of Kommersant publishing house, is in the process of becoming a major investor in Russia's leading search engine Yandex, the Russian business daily Vedomosti reported.

According to the newspaper, Usmanov is negotiating to buy 10%-20% in Yandex from the founding managers of the company, as well as new shares in the upcoming IPO on NASDAQ. Based on the company’s expected valuation of about $5 billion, the stake could be worth $1 billion.

The investment banks Morgan Stanley, Deutsche Bank and Renaissance Capital are managing the Yandex IPO.

In 2007 Yandex generated revenue of $167 million. Yandex accounted for 54% of all search traffic in Russia in Q1 2008, ahead of Google (19%) and Rambler (14%). In May 2008 Comscore ranked Yandex the third most popular search property in Europe with 528 million monthly searches."
5.8.08 10:13

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