Finweek English Edition - October 24, 2019

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When things go well, we forget exactly how fragile South Africa’s power supply is.

Then, one morning, about two weeks before Moody’s Investor Services’ next review of

South Africa’s sovereign debt is due, the lights are out again. (Moody’s is the last ratings

agency that’s kept SA’s debt at investment grade.)

Reasons given by Eskom included “among others” that five generating units were

unavailable “due to boiler tube leaks”, and a failed conveyor belt supplying coal to the brand

new (and quite costly) Medupi Power Station.

A tweet by political analyst Daniel Silke on the day that finweekk went to print (and Eskom

reminded us of the tightrope that it’s walking) summed up the ripple effect: “The return of

load-shedding in South Africa threatens to once again undermine President Ramaphosa’s

investment drive, sabotage the tentative green shoots in the economy and, coming just

before a crucial Moody’s ratings review, is the worst timing possible.”

Also responding on the morning of blackouts, Andre Botha, senior dealer at TreasuryONE,

pointed out that the rand “did not like that headline”.

“With local issues in play again, expect some volatility in the next few weeks,” he warned.

Naughty us. We know investors do not like the idea of us struggling to keep the lights on.

What we are reminded of, in the first moments of silence after the buzz of electricity

dies, is that the future of the economy is in the hands of a crippled power utility unable to

service its more than R450bn of debt. That, in fact, we’ve been lucky to have gone without

load-shedding for a couple of months. It might have tricked us into believing that the worst

is over. But we’ve been daydreaming.

We should remember that Eskom warned us that an acceleration in growth – which we

so desperately need – would most likely result in power cuts as the utility would not be able

to keep up with increased demand.

Catch-22, then.

Let’s spare a thought for those who are trying to lure investors to our not-so-glitzy shores.

And let’s remember to buy candles. ■

from the editor

contents

Opinion

6 The second renaissance of finance

In brief

8 News in numbers

10 Coal train heading for disaster

12 Life’s good for Implats

Marketplace

14 Fund in Focus: Generating returns with

lower risk

15 Killer Trade: Pick n Pay, PSG

16 House View: Grindrod Shipping, Mondi

18 Invest DIY: Back to basics

35 Investment: 5 steps to building your wealth

37 Simon Says: Africa Media Entertainment,

African Phoenix Investments, broker fees,

Impala Platinum, Long4Life, Murray &

Roberts, Spur, Tiso Blackstar

38 Invest DIY: A consistent approach to

investing

Collective Insight

19 How technology is impacting on financial

decision-making

Cover

40 The big slumber on the Top 40 index

On the money

46 Entrepreneur: Mantsho x H&M: Making

fashion history

48 Management: How to stay inspired and

innovative at work

49 Crossword and quiz

50 Piker

Wealth

Asset Management

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