JOHANNESBURG (Reuters) &#8211; South Africa’s Blue Label Telecoms said on Tuesday that Cell C, in which it is the largest shareholder, had defaulted on the payment of capital on its $184 million note, which was due on Aug. 2.



Cell C, a mobile carrier, also defaulted on interest and capital repayments related to the respective bilateral loan facilities between itself and Nedbank Limited, China Development Bank Corporation, Development Bank of Southern Africa Limited and Industrial and Commercial Bank of China Limited.



These were due in January and July 2020.

Cell_C_Mercedes_(9092759591)

South Africa’s mobile operator Cell C defaults on repayments on $184 mln bond

JOHANNESBURG (Reuters) &#8211; South Africa’s rand firmed slightly early on Tuesday, pausing after a five-session long steep slide as demand for U.S. dollars eased, and waited for new signals on the pace of a global economic recovery that has stalled in recent days.



At 0645 GMT the rand was 0.35% firmer at 17.1250 per dollar, having tumbled to a one-month low of 17.3400 on Monday as tepid local economic data and surging coronavirus infections around the world saw a rush to safe haven assets.



As local COVID-19 cases breached the 500,000 mark over the weekend, South Africa’s economy continued to show signs of a slower recovery as car sales and factory activity remained subdued.



“Sentiment has improved tentatively with Asian equities mostly in the green while demand for the USD has paused. While this has not yet translated into any ZAR gains, it has halted the local unit’s five-session bear-run,” economists at ETM Analytics said in a note.



Data showing 30 million people were out of work in the United States, added to deadlocked talks on a new coronavirus relief bill, cooled hopes that the world’s no.1 economy could lead a global recovery.



“Investors appear to be waiting for a new catalyst to provide fresh directional impetus after the dollar lost some of its momentum overnight, meaning the market may take on a more reactive approach to the day’s trade.”



Bonds were firmer, with the yield on benchmark 2030 government paper down 6.5 basis points at 9.215%.



In equities, supermarket chain Pick n Pay flagged a more than 50% fall in first-half earnings, weighed down by a ban on sales of alcohol, tobacco and clothes during the lockdown, as well as voluntary severance payments.

ArcelorMittal South Africa fined R3.64 million over hydrogen sulfide emissions

South Africa’s rand steadies as investors seek fresh recovery signals

JOHANNESBURG (Reuters) &#8211; South Africa’s supermarket chain Pick n Pay flagged a more than 50% fall in first-half earnings on Tuesday, weighed down by not being able to sell alcohol, tobacco and clothes during the lockdown as well as voluntary severance payments.



Pick n Pay, which also owns discount supermarket brand Boxer, said headline earnings per share (HEPS) for the 26 weeks ended Aug. 30, would be down more than 42.52 cents from 85.03 cents reported in the previous year.



The retailer also blamed COVID-19-related costs for the decline in HEPS, the main profit measure in South Africa that strips out certain items.

Small_format_Pick_n_Pay_store_in_Kenilworth,_Cape_Town

South Africa’s Pick n Pay warns of 50% decline in half-year earnings

JOHANNESBURG (Reuters) &#8211; Power utility Eskom and South Africa’s Special Investigating Unit (SIU) said on Monday they had issued a court summons in an effort to recoup 3.8 billion rand ($221 million) they allege was diverted by former Eskom executives and the Gupta family, who ran high profile businesses in the country.



The move by Eskom and the SIU relates to the 2015 acquisition of Optimum Coal by the Gupta-controlled company Tegeta Exploration and Resources. At issue is a claim by Eskom that the deal involved a payment to the Guptas which was authorised by previous executives, damaging the company financially.



Eskom alleged “a concerted effort corruptly to divert financial resources from Eskom, (and) to improperly and illegally benefit the Gupta family” in a statement issued jointly with the SIU.



It said that Eskom had issued a civil summons in the North Gauteng High Court against 12 individuals to recover funds lost.



Rudi Krause, the lawyer acting for the Gupta family, said he had not received any communication from Eskom or South Africa’s SIU about claim for damages.



“If they serve a summons properly and my clients are properly cited, then I will have something to respond to. At the



moment I know nothing about it,” Krause said. Krause decline further comment on Monday’s statement.



Eskom is one of several South African state-owned firms which have been investigated over allegations of corruption involving government contracts.



The investigations have prompted the overhaul of Eskom’s management and board, as well as government promises of stronger oversight, with President Cyril Ramaphosa last year announcing Eskom would be spilt into three separate entities.



Eskom also has had a succession of chief executives over the past decade as it struggled to service debts totalling 450 billion rand, while trying to keep power supplies going.



Brian Molefe, who resigned as Eskom CEO in 2017 after South Africa’s state corruption watchdog questioned coal deals struck during his term, was one of the individuals named in the statement. He also said he had not received a summons.



“Suddenly they whip out this file after three years. Nobody has contacted me,” Molefe said.



Another former Eskom CEO Matshela Moses Koko, who was also named in the statement, also dismissed the legal move.



“What a horrific blunder and a bad publicity stunt by Eskom and the SIU,” Koko wrote on Twitter. “I really want to comment but I don’t have the summons. So I don’t know what Eskom is accusing me of,” Koko later told Reuters.



The SIU is an independent statutory body that is accountable to South Africa’s parliament and the country’s president. It says it conducts investigations at the president’s request.



A judicial inquiry into alleged corruption involving state contracts worth billions of rand at Eskom and other state firms, which began two years ago, is ongoing.



South Africa’s parliament and National Treasury have also conducted investigations into Eskom’s Tegeta deal and other aspects of its procurement arrangements, but have not brought any criminal or civil charges.



($1 = 17.1724 rand)

South_Africa-Mpumalanga-Middelburg-Arnot_Power_Station01

South Africa’s Eskom seeks $221 million damages over coal deal

JOHANNESBURG (Reuters) &#8211; South African Breweries (SAB) said on Monday it was cancelling 5 billion rand ($290 million) of planned investments as a result of revenue losses sustained during a near three-month ban on alcohol sales during the coronavirus crisis.



The South African drinks industry has been among the hardest hit by restrictions, which included a ban on the sale of alcohol to the end of May, which was reinstated last month to free up space in hospitals burdened by what officials said were avoidable alcohol-related injuries.



“The cancellation of this planned expenditure is a direct consequence of having lost 12 full trading weeks, which effectively equates to some 30% of SAB’s annual production,” SAB vice-president of finance Andrew Murray said.



The sector has already cut 118,000 jobs and projections show that a nine-week ban now will cost another 84,000 and 15.5 billion rand in GDP, Richard Rushton CEO of Distell, which makes wines, spirits and ciders, said.



SAB, owned by the world’s largest brewer Anheuser-Busch InBev, said it had cancelled 2.5 billion rand planned expenditure for this financial year, while the other half for the next financial year remains under review.



Investments being considered by SAB included upgrades to operating facilities and systems, as well as the installation of new equipment at selected plants, it added.



The ban has also forced the South African arm of Heineken to drop plans to build a 6 billion rand brewery in KwaZulu-Natal, it said on Monday.



Industry associations have called for the government to drop the alcohol ban, with some restaurant, bar and tavern owners considering closing for good.



SAB said the country had lost an estimated excise tax of more than 12 billion rand during the first ban.



($1 = 17.2467 rand)

beer

SAB dumps $290 mln investment plans after South Africa alcohol ban

COVID-19 has wrought havoc on poor households in countries across the world. In South Africa, more and more people are facing hunger resulting from&nbsp;<a href="https://www.businesslive.co.za/fm/features/cover-story/2020-07-15-the-jobs-reckoning-is-here/">mass job losses</a>&nbsp;and small, poorly implemented supplementary cash grants.



On top of this the pandemic has put in stark relief the country’s poorly understood food system, in which powerful firms operate with little oversight while vulnerable actors in the informal food sector face over-regulation.



When the country went into lockdown on 26 March 2020,&nbsp;<a href="http://www.dti.gov.za/news2020/FAQs-EssentialServices.pdf">government placed</a>&nbsp;the formal food sector at the centre of continued food supply. Informal food vendors were restricted. Yet these vendors provide an important source of food and livelihoods for the majority of South Africa’s population.



The South African constitution recognises the right to food. But the government’s failure to enact specific legislation on food rights has resulted in incoherent food security policies. Even the smallest increases in prices of products in the basic food basket can have a significant impact on poor households and in local markets. Therefore, access to affordable and nutritious food through formal and informal food markets is critical for ensuring people’s right to food.



In this article, we highlight indicators of a distressing rise in the prices of essential food products that is contributing to South Africa’s hunger crisis. We call for the urgent expansion of price controls to items in the basic household food basket, as well as an inquiry into the price-setting of major retailers.



<h2 class="wp-block-heading">Have food prices increased?</h2>



StatsSA recently&nbsp;<a href="http://www.statssa.gov.za/publications/P0141/P0141April2020.pdf">published</a>&nbsp;the headline urban consumer price index (CPI) as having&nbsp;decreased&nbsp;by 0.5% month-on-month in April 2020. But the statistics body&nbsp;<a href="http://www.statssa.gov.za/publications/P0141/P0141April2020.pdf">explicitly cautioned</a>&nbsp;that its new price collection strategy had been severely limited by the lockdown regulations. The headline number potentially reflects very different pricing behaviour of major retailers that have an online presence. Moreover, smaller retailers are excluded from this methodology – despite comprising half of poor household food spending based on data from the&nbsp;<a href="http://www.statssa.gov.za/publications/P0100/P01002011.pdf">Income and Expenditure Survey</a>&nbsp;of 2011.



Evidence of large price increases on essential food items is recorded by the NGO Pietermaritzburg Economic Justice and Dignity’s&nbsp;<a href="https://pmbejd.org.za/index.php/household-affordability-index/">price surveys</a>. They find an 8.2% increase in the price of a household food basket for the three-month period from 2 March to 3 June 2020. This includes large increases in the prices of essential food items at the local level over the period, such as an 18% increase for sugar beans and a 14% increase for brown bread.



Table 1: Month-on-month price increases for essential food items, March to April 2020



<figure class="wp-block-image"><img decoding="async" src="https://images.theconversation.com/files/349102/original/file-20200723-21-1boiwi4.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""/><figcaption>Source: StatsSA detailed weekly price data for April and PMBEJD weekly price data for April. Items have been matched by authors for comparability.</figcaption></figure>



Comparisons of the StatsSA and Pietermaritzburg surveys are limited by timing and availability of item specific data. But both sources show that prices of brown bread, eggs, potatoes, salt, and soup increased in March and April. These are essential food items not necessarily monitored under current COVID-19 regulations.



<h2 class="wp-block-heading">Why is this not a Competition Commission case?</h2>



The price hikes have drawn the attention of the country’s Competition Commission. In a recent food price monitoring&nbsp;<a href="http://www.compcom.co.za/wp-content/uploads/2020/07/Essential-Food-Pricing-Monitoring-Report.pdf">report</a>&nbsp;it pointed out significant inflation in the prices of various food items. It commented that, in some cases, the increases and high margins were not justified by the changes in the operating costs of the suppliers.



<a href="https://www.gov.za/sites/default/files/gcis_document/202004/43205rg43205gon448.pdf">Regulations</a>&nbsp;introduced in March after the government declared a state of disaster to manage the COVID-19 pandemic empowered competition agencies to investigate firms believed to be charging excessive prices for certain essential healthcare and food items. But not a lot has happened. Although 38% of the 320 complaints received by the competition commission by the end of June related to food prices, only one has so far led to an administrative penalty for a firm. This was the Food Lover’s Market case relating to the price of raw&nbsp;<a href="https://www.timeslive.co.za/news/south-africa/2020-07-14-food-lovers-store-admits-to-charging-excessive-price-for-raw-ginger/">ginger</a>.



Cases of excessive pricing of goods and services are among the most difficult to prosecute. This is because of the complexities of determining the extent to which prices are high; relevant cost parameters that have to be considered; the reliability of benchmarks; and the availability of data.



<h2 class="wp-block-heading">What can be done?</h2>



During the most severe part of the lockdown in the country, the government addressed the issue of higher food prices by concluding an agreement with major retailers to limit price increases on key items. But this lapsed immediately after the first easing of the lockdown on 4 May. Since then retailers have&nbsp;<a href="http://www.compcom.co.za/wp-content/uploads/2020/07/Essential-Food-Pricing-Monitoring-Report.pdf">increased prices</a>&nbsp;of certain food items in response to higher input prices. We believe a renewed list of price limits should be put in place.



Along with capping price increases for key food items, we propose that the list of items subject to the price monitoring regime be broadened. The Competition Commission’s assessment – and our own – indicate that there has been some positive effect of the food price increase restrictions for food items already included in this list, such as maize meal and frozen chicken. But the published&nbsp;<a href="https://businesstech.co.za/news/business/383217/new-regulations-bring-coronavirus-price-controls-for-certain-high-demand-products-heres-what-is-on-the-list/">list</a>&nbsp;of 22 critical products and categories, including 11 basic food items that are price-monitored, does not go far enough. The list of 11 food items leaves out brown bread and dried foods such as legumes, for example, which are staple foods for the poor and a major source of nutrition. The inclusion of frozen vegetables, on the other hand, points to poor targeting and a limited understanding of what constitutes the food basket of low-income households. Frozen vegetables are staples among middle-income households.



Table 2: Comparison of essential food baskets



<figure class="wp-block-image"><img decoding="async" src="https://images.theconversation.com/files/349109/original/file-20200723-29-105x169.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""/><figcaption>Notes: Food poverty line basket compiled by the StatsSA. VAT zero-rated basic foodstuffs are defined by National Treasury/SARS. Price monitored goods are published by the National Consumer Commission list in Reg. 350 of Government Gazette No. 11057 of 19 March. PMBEJD household food basket is compiled in consultation with women living on low incomes in Pietermaritzburg.</figcaption></figure>



We recommend the urgent expansion of the list to include brown bread, fresh vegetables, eggs and sugar beans, among other products. A failure to do this may well reverse any positive impact of increasing the rand values of social grants. At its core, the right to food is about protecting people’s right to feed themselves.



While the expansion of social protection measures does in part contribute to access to food for poor and vulnerable households, government should play a role in monitoring and regulating the food sector to ensure a more equitable and sustainable food system for consumers and actors in informal food markets. Price limits should be complemented by an inquiry into the price-setting of major retailers. The weaknesses in the StatsSA pricing data highlighted above indicate the need for more comprehensive data to inform ongoing monitoring of food prices.



The effects of COVID-19 will endure for some time to come, including large-scale job losses, and so it is certainly not too late to intervene. Poorer South African households cannot continue to endure both a crisis of joblessness and food price increases.

Everyday_african_urbanism_yasser_booley_51990

South Africa needs better food price controls to shield poor people from COVID-19 fallout

NEW YORK (Reuters) &#8211; Oil prices were up more than 1% on Monday on positive economic data from the United States, Europe and Asia, but investors remained concerned about rising COVID-19 cases globally and oversupply as OPEC begins to lift supply cuts.



Brent crude settled at $44.15 a barrel, rising 63 cents, or 1.5%. U.S. West Texas Intermediate (WTI) crude rose 74 cents, or 1.8%, to end at $41.01 a barrel.



U.S. manufacturing activity accelerated to its highest level in nearly 1-1/2 years in July as orders increased despite a resurgence in new COVID-19 infections, the Institute for Supply Management said.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="910" height="609" src="https://www.cnbcafrica.com/wp-content/uploads/2020/07/oil-rig-industry-oil.jpg" alt="" class="wp-image-375804" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2020/07/oil-rig-industry-oil.jpg 910w, https://cms.cnbcafrica.com/wp-content/uploads/2020/07/oil-rig-industry-oil-300x201.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2020/07/oil-rig-industry-oil-820x549.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2020/07/oil-rig-industry-oil-768x514.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2020/07/oil-rig-industry-oil-696x466.jpg 696w, https://cms.cnbcafrica.com/wp-content/uploads/2020/07/oil-rig-industry-oil-600x402.jpg 600w" sizes="(max-width: 910px) 100vw, 910px" /></figure>



A similar survey showed manufacturing activity across the euro zone expanded last month for the first time since early 2019, while positive manufacturing data in Asia also boosted oil.



“The industrial sector is picking back up and that portends well for demand going forward,” said John Kilduff, partner at Again Capital LLC in New York.



Investors, however, continue to worry about the economic recovery as coronavirus cases climb, with known infections reaching almost 18 million globally. More countries are imposing new restrictions or extending existing curbs in an effort to control the pandemic.



The prospect of oversupply also weighed on oil prices as the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, prepare to ease oil supply cuts while U.S. shale production begins to increase.



“I think the question is going to remain, as OPEC reduces their production cuts, are we going to continue to see oil inventories around the world decline,” said Andy Lipow or Lipow Oil Associates.



OPEC+ members have been cutting output by 9.7 million barrels per day (bpd) since May. This month, cuts will taper to 7.7 million bpd until December.



Russian oil and gas condensate output increased to 9.8 million bpd over Aug. 1-2, from 9.37 million bpd in July, a source familiar with data said.

oil-oil-production-oil-pump-heating-oil-crude-oil-thumbnail

Oil rises more than 1% on hopes for economic recovery

(Reuters) &#8211; The U.S. economy, battered by a resurgence in the spread of COVID-19, needs increased government spending to tide over households and businesses and broader use of masks to better control the virus, several U.S. central bankers said on Monday.



The calls for increased government intervention came as U.S. lawmakers and the White House resumed talks on a new government relief package, including a possible extension of unemployment benefits that expired on Friday.



“Four months ago, when we did the first stimulus, we thought the economy faced a pothole and the stimulus put a plate over it so we could navigate. Now escalation of the virus may be making that pothole into a sinkhole and creating a need for a longer plate,” Richmond Fed President Thomas Barkin said in webcast remarks to the Northern Virginia Chamber of Commerce.



“Quickly pulling away the support that consumers and businesses are receiving would be a pretty traumatic move for what’s happening in the economy.”



Echoing those sentiments, though in slightly different terms, were Dallas Federal Reserve Bank President Robert Kaplan and St. Louis Fed President James Bullard. Kaplan pushed back on the notion that the extra $600 weekly benefits to the unemployed had made it harder for businesses to hire, while Bullard said earlier efforts to keep businesses and households whole through the crisis have paid off so far.



“We’ve looked at a number of studies, we’ve done our own work: we don’t see it as much in the data but I can tell you I’m hearing it from business people,” Kaplan told Bloomberg TV earlier Monday when asked about whether the enhanced jobless aid was deterring people from returning to work.



“While it may have made it hard for certain individual businesses to hire, it has helped create jobs, because it has helped bolster consumer spending, so the net effect still has probably been positive for the economy for employment.”



Kaplan also said he did not agree with his colleague, Minneapolis Fed President Neel Kashkari, who at the weekend said he thought the U.S. economy should shut back down again for four to six weeks to suppress spread of COVID-19.



Instead, Kaplan said, universal mask-wearing could substantially mute transmission of the virus without a widespread lockdown. “I think we are going to have to learn to live with this virus. We are going to have to learn to re-engage in our daily activities but still control the virus,” he said. “Widespread mask-wearing is essential to that.”



Bullard, too, emphasized mask-wearing as a significant risk-management tool, especially as he does not expect health officials to be able to reduce disease transmissions to zero because it is so contagious. He also warned against placing too much emphasis on the development of a successful vaccine.



“If you put too much emphasis on the idea that a vaccine is going to come and save us, and someone’s going to crack a very difficult scientific problem &#8230; then you get people not doing anything and sitting around waiting for the vaccine,” Bullard said in a presentation during an online event hosted by the bank’s Memphis, Tennessee, branch. “So If you do that, you do risk a depression because you could get a lot of business failures while you’re waiting, potentially a very long time for a vaccine to come and save the day.”



The regional bank presidents’ comments came just days after the Fed’s latest two-day policy meeting, at which officials repeated their pledge to do all in their power to help the economy weather the recession that began in February as the outbreak began ricocheting around the globe. The U.S. central bank has slashed interest rates to near zero &#8211; where they are expected to remain for years &#8211; and has rolled out roughly a dozen emergency programs to backstop financial markets and support businesses.



Bullard also said he expects that economic growth has resumed in the current third quarter, but that after a better-than-expected start to the rebound in May and June, the rebound slowed in July with the resurgence in infections in many areas of the country.



“I think the slowdown in July would be consistent with the idea that we shouldn’t expect a completely smooth transition as you go forward because this is a crisis and there’s going to be ups and downs.”

U.S. economy needs more stimulus and more masks, Fed policymakers say

JOHANNESBURG (Reuters) &#8211; South Africa’s anti-corruption watchdog said on Monday it was investigating irregularities in coronavirus-related tenders, the latest in a series of scandals that trade unions said showed the government’s failure to tackle graft.



The probes by the Public Protector come soon after investigators launched separate inquiries into the procurement of personal protective equipment (PPE) in Gauteng province, the country’s economic heartland.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="760" height="382" src="https://www.cnbcafrica.com/wp-content/uploads/2020/03/CR-lockdown.png" alt="Ramaphosa tests negative for coronavirus as South Africa to begin lockdown" class="wp-image-365190" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2020/03/CR-lockdown.png 760w, https://cms.cnbcafrica.com/wp-content/uploads/2020/03/CR-lockdown-300x151.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2020/03/CR-lockdown-696x350.png 696w" sizes="(max-width: 760px) 100vw, 760px" /><figcaption>Ramaphosa tests negative for coronavirus as South Africa to begin lockdown</figcaption></figure>



President Cyril Ramaphosa staked his reputation on tackling graft when he replaced Jacob Zuma as head of state more than two years ago, but he is on the back foot after news reports alleging that politically connected individuals have milked the state for millions during the coronavirus pandemic.



Ramaphosa used a weekly newsletter to the nation to promise that his government would “finally deal with the entrenched patronage networks that enable government employees to bid for state contracts through their friends and relatives”.



“We will not allow public funds hard-earned by loyal taxpayers or donations by patriotic companies and individuals and the international community to vanish down a black hole of corruption.”



COSATU, the country’s largest trade federation and a key ally of the governing African National Congress (ANC), said in a statement that Ramaphosa’s administration had acted feebly in the face of the recent corruption allegations.



It called corruption the biggest threat to the economy.



The Public Protector said it was investigating tender irregularities at least in three provinces, including over a quarantine site that is believed to be owned by a government official and PPE procurement in the KwaZulu-Natal province.



South Africa has recorded more than a half a million cases of COVID-19, the most in Africa, with the number of infections continuing to rise rapidly.



The main opposition party, the Democratic Alliance, over the weekend called for a snap parliamentary debate on what it described as a “feeding frenzy” by ANC-connected individuals after normal procurement rules were suspended because of the coronavirus.



An ANC spokesman did not answer his phone when Reuters sought comment on Monday.



Ramaphosa’s spokeswoman, Khusela Diko, and a top Gauteng health official have taken leaves of absence after a media report said that Diko’s husband won PPE contracts with the Gauteng government.



Diko and her husband have denied wrongdoing and the health official has said he was not involved in provincial procurement processes.



Despite Ramaphosa’s assurances, some analysts are sceptical he will make much headway tackling corruption.



“The ANC sustains itself off state tenders,” political analyst Ralph Mathekga said.



“The only way Ramaphosa can remain president is to act surprised and look the other way. He created an integrity ticket for himself, and now he is failing at living up to it.”

gettyimages-1152457961-594×594

South African corruption watchdog probes COVID-19 tenders

PRAGUE (Reuters) &#8211; Volkswagen’s Czech carmaker Skoda Auto named VW’s South Africa boss Thomas Schaefer as its new chairman on Monday as part of a wider shake-up at the German autos group.



Schaefer replaces Bernhard Maier, who left the Czech firm last month after nearly five years during which he led the 125-year-old Skoda to record profits.



Skoda is the central European country’s biggest exporter, but its success has sometimes caused friction within Volkswagen, whose labour boss has criticised it for cannibalising sales.



The Czech company delivered 1.24 million cars globally in 2019, with China and Germany as its top markets. Like other carmakers, Skoda is battling to get back from shutdowns due to the coronavirus crisis and now faces uncertainty over demand.



However, it said last week it saw signs of recovery, after first-half deliveries crashed 31% and group Chief Executive Herbert Diess told Frankfurter Allgemeine Zeitung (FAZ) that Skoda &#8211; one of VW’s 12 brands &#8211; needed to do more to compete with South Korean and French rivals.



Labour unions, traditionally strong at Skoda Auto, said it was unclear what Schaefer’s appointment would mean for the direction of the Czech carmaker.



Schaefer, who takes up the post with immediate effect, joined Volkswagen from Mercedes-Benz in 2012 and has since 2015 led Volkswagen Group South Africa, which produces vehicles and engines mainly for export. It hit record output in 2019.



Schaefer also ran VW’s broader African business and spearheaded the development of production hubs in countries including Ghana, Nigeria and Kenya.

VW South Africa boss Schaefer takes over at Skoda in shake-up

JOHANNESBURG (Reuters) &#8211; Shoprite Holdings could become the latest South African retailer to retreat from other African markets after it said on Monday that it is considering reducing or selling all of its stake in its Nigerian subsidiary.



The company has been reviewing its long-term options in Africa as currency devaluations, supply issues and low consumer spending in Angola, Nigeria and Zambia have weighed on earnings.



Shoprite, which owns more than 2,800 outlets across Africa, said in a trading update that it was pursuing the sale after reviewing its operating model and receiving approaches from various investors.



In February CEO Pieter Engelbrecht told analysts that Shoprite remained committed to the continent but not at any cost.



The market welcomed the potential exit, pushing Shoprite’s shares to their highest in nearly two months. They were up 11.4% by 1214 GMT.



“Good riddance to Nigeria,” said independent investment analyst Christopher Gilmour. “Almost impossible for any foreign company to do business there. Companies never know where they stand with the authorities and there are constant disruptions and distractions.”



A portfolio manager who did not want to be named said that Engelbrecht is delivering on his promises to deleverage the balance sheet and focus on the domestic market, where the retailer continues to trade best.



“Future profits will also improve, given the severance of the lethargic Nigerian arm,” he added.



Its shares were also supported by a 6.4% jump in total sales to 156.9 billion rand (6.95 billion pounds) in the 52 weeks to June 28. Shoprite said its annual headline earnings per share (HEPS) could rise despite the impact of 327.2 million rand in COVID-19 costs and impairments of 1.3 billion rand.



The retailer said its basic HEPS &#8211; the main profit measure in South Africa &#8211; from continuing operations are likely to be between 1.6% below and 6.4% above the restated 747.7 cents it reported a year earlier.



Its South African supermarkets division grew by 8.7% while sales at its supermarkets outside South Africa, excluding Nigeria, fell 1.4%.



Its South African supermarkets were boosted by panic-buying at the outset of the coronavirus lockdown and significant growth at its Checkers business, which has been repositioned as a more upmarket brand and now represents 39.6% of the group’s domestic supermarket sales.

Shoprite,_Zeerust

Shoprite lifted by sales jump and potential Nigeria exit

GENEVA (Reuters) &#8211; The World Health Organization warned on Monday that, despite strong hopes for a vaccine, there might never be a “silver bullet” for COVID-19, and the road to normality would be long.



More than 18.14 million people around the world are reported to have been infected with the disease and 688,080​ have died, according to a Reuters tally, with some nations that thought they were over the worst experiencing a resurgence.



WHO Director-General Tedros Adhanom Ghebreyesus and WHO emergencies head Mike Ryan exhorted all nations to rigorously enforce health measures such as mask-wearing, social distancing, hand-washing and testing.



“The message to people and governments is clear: ‘Do it all’,” Tedros told a virtual news briefing from the U.N. body’s headquarters in Geneva. He said face masks should become a symbol of solidarity round the world.



“A number of vaccines are now in phase three clinical trials and we all hope to have a number of effective vaccines that can help prevent people from infection. However, there’s no silver bullet at the moment &#8211; and there might never be.”



Ryan said countries with high transmission rates, including Brazil and India, needed to brace for a big battle: “The way out is long and requires a sustained commitment.”



<h3 class="wp-block-heading">INVESTIGATION</h3>



The WHO officials said an advance investigation team was not yet back from China, where the virus originated.



A larger, WHO-led team of Chinese and international experts is planned next, to study the origins of the virus in the city of Wuhan, although the timing and composition of that is not yet clear.



Tedros urged mothers to continue breastfeeding even if they had COVID-19, as the benefits “substantially” outweighed the risks of infection.



The WHO head said that, while the coronavirus was the biggest global health emergency since the early 20th century, the international hunt for a vaccine was also historic.



“There are many vaccines under trial, a couple in the final stage of clinical trials &#8211; and there is hope. It does not mean that we will have the vaccine, but at least the speed with which we reached the level we reached now is unprecedented,” he said.



“There are concerns that we may not have a vaccine that may work, or its protection could be for just a few months, not more. But until we finish the clinical trials, we will not know.”

Dr Matshidiso Moeti – WHO Regional Director for Africa

There may never be a ‘silver bullet’ for COVID-19, WHO warns

(Reuters) &#8211; As the world awaits a COVID-19 vaccine, the next big advance in battling the pandemic could come from a class of biotech therapies widely used against cancer and other disorders &#8211; antibodies designed specifically to attack this new virus.



Development of monoclonal antibodies to target the virus has been endorsed by leading scientists. Anthony Fauci, the top U.S. infectious diseases expert, called them “almost a sure bet” against COVID-19.



When a virus gets past the body’s initial defenses, a more specific response kicks in, triggering production of cells that target the invader. These include antibodies that recognize and lock onto a virus, preventing the infection from spreading.



Monoclonal antibodies &#8211; grown in bioreactor vats &#8211; are copies of these naturally-occurring proteins.



Scientists are still working out the exact role of neutralizing antibodies in recovery from COVID-19, but drugmakers are confident that the right antibodies or a combination can alter the course of the disease that has claimed more than 675,000 lives globally.



“Antibodies can block infectivity. That is a fact,” Regeneron Pharmaceuticals executive Christos Kyratsous told Reuters.



Regeneron is testing a two-antibody cocktail, which it believes limits the ability of the virus’ to escape better than one, with data on its efficacy expected by late summer or early fall. “Protection will wane over time. Dosing is something we don’t know yet,” said Kyratsous.



The U.S. government in June awarded Regeneron a $450 million supply contract. The company said it can immediately begin production at its U.S. plant if regulators approve the treatment.



Eli Lilly and Co &lt;LLY.N, AstraZeneca, Amgen, and GlaxoSmithKline were cleared by the U.S. government to pool manufacturing resources in order to scale up supplies if any of these drugs prove successful.



Even with that unusual cooperation among rivals, manufacturing these medicines is complex and capacity is limited. There is also a debate over whether a single antibody will be powerful enough to stop COVID-19.



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AstraZeneca said it plans to start human trials of its dual-antibody combination within weeks.



Lilly, which began human testing in June of two antibody candidates in separate trials, is focusing on a one-drug approach.



“If you need a higher dosage or more antibodies, fewer people can be treated,” Lilly Chief Scientific Officer Dan Skovronsky said.



<h3 class="wp-block-heading">‘INSTANT IMMUNITY’</h3>



Unlike vaccines, which activate the body’s own immune system, the impact of infused antibodies eventually dissipates.



Still, drugmakers say monoclonal antibodies could temporarily prevent infection in at-risk people such as medical workers and the elderly. They could also be used as a therapeutic bridge until vaccines become widely available.Slideshow&nbsp;(3 Images)



“In a prophylactic setting we think we may achieve coverage for up to six months,” said Phil Pang, chief medical officer of Vir Biotechnology, which aims to start testing an antibody in non-hospitalized patients next month with partner GSK.



“The advantage of an antibody is that it is basically instant immunity,” said Mark Brunswick, senior vice president at Sorrento Therapeutics, which aims to begin human trials next month of a single antibody candidate.



Safety risks for monoclonal antibodies are considered low, but their cost can be quite high. These type of drugs for cancer can cost over $100,000 a year.



There is also concern that the coronavirus could become resistant to specific antibodies. Researchers are already at work on second-generation compounds with targets other than the crown-like spikes the virus uses to invade cells.



“We are trying to develop something that is complementary,” Amgen research chief David Reese said. Amgen is working with Adaptive Biotechnologies Corp.



Researchers in a recent paper published in the journal Nature said they had discovered several new, very potent, antibodies directed to an area where the virus attaches to human cells and to a region of the spike that has not attracted attention.



“To avoid development of resistance you want to target different sites,” study author and Columbia University professor David Ho told Reuters.



There are also questions about when in the course of the illness it might be best to employ these new weapons.



“Giving an antibody later on after infection might not be that helpful, said Florian Krammer, microbiology professor at New York’s Icahn School of Medicine. “Given early, they probably work well.”

Clarification on COVID-19 “hotspots” as SA moves to level 3 lockdown

Next big COVID-19 treatment may be manufactured antibodies

JOHANNESBURG (Reuters) &#8211; South Africa’s seasonally-adjusted Absa Purchasing Managers’ Index (PMI) expanded in July, although at a slower rate compared to the previous month.



The index, which gauges manufacturing activity in Africa’s most industrialised economy, fell to 51.2 points in July from 53.9 points in June, remaining above the 50-point mark that separates expansion from contraction.



The business activity sub-index ticked down slightly to 62.9 from 64.6 in June, Absa said in a statement on Monday.



The employment sub-index showed the manufacturing sector was still shedding jobs even with activity recovering.



South Africa imposed a strict lockdown in late March to curb the spread of the coronavirus but has since eased some of the restrictions, with most key industries now allowed to operate at full capacity subject to health and safety protocols.

Absa Reboots Image As 100 Years Of Barclays In Africa Ends

South Africa’s July Absa PMI signals slower manufacturing improvement

GENEVA/BRUSSELS (Reuters) &#8211; Eight candidates from Mexico to Moldova are bidding to become the next director-general of the World Trade Organization to replace Roberto Azevedo, who steps down at the end of August.



<h3 class="wp-block-heading">CHALLENGES</h3>



The next chief would broker international trade talks in the face of widening U.S.-China conflict, protectionism increased by the COVID-19 pandemic and pressure to reform trade rules.



U.S. President Donald Trump’s “America First” policies have upended the global trading order and presented an existential threat to the WTO. Trump has called the institution “broken” and “horrible”. Washington has blocked appointments to the WTO’s Appellate Body that settles trade disputes, which now no longer has the minimum number of judges to convene.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="594" height="438" src="https://www.cnbcafrica.com/wp-content/uploads/2019/12/gettyimages-642093036-594x594-1.jpg" alt="" class="wp-image-352573" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2019/12/gettyimages-642093036-594x594-1.jpg 594w, https://cms.cnbcafrica.com/wp-content/uploads/2019/12/gettyimages-642093036-594x594-1-300x221.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2019/12/gettyimages-642093036-594x594-1-80x60.jpg 80w, https://cms.cnbcafrica.com/wp-content/uploads/2019/12/gettyimages-642093036-594x594-1-570x420.jpg 570w" sizes="(max-width: 594px) 100vw, 594px" /><figcaption>WASHINGTON, DC &#8211; FEBRUARY 16: U.S. President Donald Trump stands during a news conference announcing Alexander Acosta as the new Labor Secretary nominee in the East Room at the White House on February 16, 2017 in Washington, DC. The announcement comes a day after Andrew Puzder withdrew his nomination. (Photo by Mario Tama/Getty Images)</figcaption></figure>



HOW THE DIRECTOR-GENERAL IS CHOSEN



The candidates have been given two months to campaign until September 7. Normally this would involve trips to national capitals, but with the pandemic much of that is being done in a virtual format.



The next phase involves whittling down the field, initially to five then two, before a final decision is taken.



The WTO is a members-driven organisation with decisions reached by consensus among 164 countries. Three WTO ambassadors who chair leading committees will lead the process, seeking to establish which candidates have the widest support.



In so-called “confessionals”, members will tell this “troika” their preferences, without ranking them and without vetoes in a process expected to last two months. The first phase will be on Sept 7-16. Voting on the next director-general is seen only as a last resort if consensus cannot be reached.



The process does not always work smoothly. In 1999, former New Zealand prime minister Mike Moore and Thailand’s Supachai Panitchpakdi divided WTO members, with a compromise finally found to give each a term, shortened to three years from four.



Azevedo’s term will finish before his replacement takes office, but WTO members failed to agree on a temporary caretaker director-general, meaning the four deputies will stay on in their current roles.



<h3 class="wp-block-heading">MORE SOFT THAN HARD POWER</h3>



The Marrakesh Agreement that established the WTO in 1995 does not give a detailed description of the director-general role. The responsibilities should be “exclusively international in character”.



The incoming chief would be expected to appoint four new deputies, present budget proposals, and chair the trade negotiations committee which oversees multilateral accords such as on fishing subsidies.



The director-general can also intervene in trade disputes, in very rare cases offering mediation, more often by appointing people to adjudicating panels when parties cannot agree.



Otherwise, the director-general does not forge global trade policy, but is meant to act as a neutral broker: part administrator, part peacemaker.

amina 2

Explainer: How the next WTO chief will be chosen and the task ahead

JOHANNESBURG (Reuters) &#8211; South Africa’s rand fell to its weakest in more than three weeks on Monday, as fears about the economic fallout from rising COVID-19 cases dented investors’ appetite for riskier assets.



At 0625 GMT, the rand was 0.47% weaker at 17.1400 per dollar, its weakest since July 8.



Signs of a resurgence in global infections in recent days have tamed global demand for assets perceived as risky, putting pressure on the rand, which was already vulnerable because of the frailty of South Africa’s economy.



In South Africa, confirmed cases of COVID-19 crossed half a million on Saturday.



“Markets continue to dwell on uncertainty regarding trade tensions, U.S. elections and recovery, as well as rising virus numbers,” said Bianca Botes, executive director at Peregrine Treasury Solutions.



Government bonds weakened, and the yield on the benchmark bond due in 2030 rose 9 basis points to 9.335%.

101416618-rand

South Africa’s rand falls as virus fears hit risk appetite

JOHANNESBURG (Reuters) &#8211; South Africa’s telecom operator Telkom has branched into the competitive space of financial services by launching a life insurance business that it said will initially sell funeral insurance.



Telkom and other mobile operators in South Africa are looking to tap more than 11 million South Africans who do not have bank accounts to offer lending and other financial services, a move that is set to threaten traditional and digital banks.



They are also seeking to expand their mobile payment apps into online market places to leverage their network and customer base.



“In recent years Telkom has made a strategic shift to digital distribution, which puts it in an ideal position to distribute insurance products using its considerable digital structure and intellectual property,” Sibusiso Ngwenya, managing executive for Telkom Financial Services said in a joint statement on Sunday with insurer Guardrisk which will underwrite the service.



Partly state-owned Telkom has been diversifying its income streams beyond the fixed-line business, which now contributes just over 20% to group revenue, up from 56% in 2013.



Underwriter Guardrisk Life is part of JSE-listed insurer Momentum Metropolitan Holdings Limited.



In a Sunday Times newspaper ad, Telkom said it will also offer business loans and soon launch a digital wallet service for customers to buy products and pay for services via its Yep! app as well as other online transacting platforms.



The battle to capture South Africa’s unbanked is intensifying among mobile operators after biggest mobile operator by subscribers MTN Group re-launched its mobile money app in South Africa in February and has been building the platform to include online shopping payments and micro loans.



In July Vodacom Group announced plans to create a ‘super app’ in partnership with digital payment provider Alipay, part of China’s Alibaba group, to allow consumers in South Africa to shop online, pay bills and send money to family from next year.

Newsletter

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U.S. economy needs more stimulus and more masks, Fed policymakers say

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There may never be a ‘silver bullet’ for COVID-19, WHO warns

Next big COVID-19 treatment may be manufactured antibodies

South Africa’s July Absa PMI signals slower manufacturing improvement

Explainer: How the next WTO chief will be chosen and the task ahead

South Africa’s rand falls as virus fears hit risk appetite

South African telecom operator Telkom moves into financial services

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Advertise With Us

Newsletter

South Africa’s mobile operator Cell C defaults on repayments on $184 mln bond

South Africa’s rand steadies as investors seek fresh recovery signals

South Africa’s Pick n Pay warns of 50% decline in half-year earnings

South Africa’s Eskom seeks $221 million damages over coal deal

SAB dumps $290 mln investment plans after South Africa alcohol ban

South Africa needs better food price controls to shield poor people from COVID-19 fallout

Oil rises more than 1% on hopes for economic recovery

U.S. economy needs more stimulus and more masks, Fed policymakers say

South African corruption watchdog probes COVID-19 tenders

VW South Africa boss Schaefer takes over at Skoda in shake-up

Shoprite lifted by sales jump and potential Nigeria exit

There may never be a ‘silver bullet’ for COVID-19, WHO warns

Next big COVID-19 treatment may be manufactured antibodies

South Africa’s July Absa PMI signals slower manufacturing improvement

Explainer: How the next WTO chief will be chosen and the task ahead

South Africa’s rand falls as virus fears hit risk appetite

South African telecom operator Telkom moves into financial services

News Tips

Advertise With Us

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