Company news in brief

28 October 2020 | Business

IDC’s investments take big hit

South Africa's state-owned Industrial Development Corporation (IDC) said it would diversify its equity investments after reporting on Monday a sharp decline in the value of its top three holdings in listed companies.

The IDC is South Africa's biggest financing institution and provides loans to projects that help develop the country's industrial capacity. It also invests in shares of companies listed on the Johannesburg Stock Exchange (JSE).

For the financial year that ended in March 2020, IDC said its stakes in Sasol, Kumba Iron Ore and BHP saw losses amounting to a combined R30 billion.

The IDC's results were also hit by a depressed South African economy due to the impact of the Covid-19 pandemic and significant losses at subsidiaries, which led to a rise in non-performing loans.

Group revenue fell 9% to R16.3 billion while its asset value fell 24% to 109.6 billion rand in the 2020 financial year.

As part of its risk management approach, it said it would invest in smaller portions of projects, co-fund some investments and narrow the regions in which it invests across the continent whilst supporting economic recovery. – Nampa/Reuters

Ant Group IPO to rocket Ma's wealth

Chinese tech titan Jack Ma is set to become the world's 11th richest person after the financial arm of his e-commerce titan Alibaba raised billions in a mammoth public listing, according to the Bloomberg News.

Ant Group said Monday it plans to raise US$34 billion in a listing shared between Hong Kong and Shanghai - making it the biggest IPO in history.

The e-payments behemoth, which runs China's dominant online payment system Alipay, planned to sell 1.67 billion shares at HK$80 (US$10.30) each in Hong Kong from yesterday.

Ant Group's split float would exceed the US$29 billion chalked up by Saudi Aramco in December, a high-profile win for a Chinese company during a period of bad headlines for mainland tech firms as Beijing and Washington face off on a number of fronts.

According to Bloomberg, former English teacher Ma's 8.8% stake in Ant is worth US$27.4 billion based on the stock pricing, and will lift the entrepreneur's fortune to US$71.1 billion. – Nampa/AFP

Tiffany gets approval for LVMH deal

Tiffany & Co has received regulatory approvals from the European Commission for its US$16 billion acquisition by French luxury goods group LVMH, the US jeweller said on Monday.

The EU decision comes amid a legal battle between LVMH and Tiffany, with the latter suing the Louis Vuitton owner in a Delaware court, alleging that the French company has deliberately been stalling the completion of the deal.

Tiffany added that with the EU nod, it had all regulatory approvals required for the completion of the deal. – Nampa/Reuters

UBS to up salaries, cut bonuses

Swiss bank UBS Group will increase fixed salaries and cut bonuses for some staff in a pay revamp designed to help keep specialists from jumping ship to rivals.

"UBS regularly analyses its total compensation structure. As a result, we will adjust selectively certain salary levels to remain competitive," a spokesman for Switzerland's biggest bank said in an emailed statement on Monday. "However, we view any change in salary as total compensation neutral."

A Bloomberg report said fixed salaries for some more senior employees may rise by as much as a fifth in a move that could let the bank lower its bonus pool.

A person familiar with the situation said the changes would take place retrospectively from the start of 2020. It would apply to specialists in high demand from competitors, mostly investment bankers but also others with big books of business.

UBS, the world's largest wealth manager, said last week it was giving lower-ranking employees an extra week's pay this year in light of the Covid-19 pandemic and was adding a financial sweetener to ease the exit of employees looking to depart.

HSBC to overhaul business model

HSBC Holdings PLC yesterday signalled it would embark on a transformation of its business model, seeking to flip its main source of income from interest rates to fee-based businesses.

It also accelerated plans to shrink in size and will slash costs further than previously suggested.

The plans were unveiled as the bank posted a less-than-expected 35% drop in quarterly profit and flagged an easing in its provisions for bad loans, citing an expected improvement in the economic outlook for its main markets.

The change in approach marks one of the biggest long-term shifts in strategy to date from Europe's biggest bank, which has long touted its ability to generate interest income from its more than US$1.5 trillion in customer deposits.

But with interest rates worldwide now rock-bottom and even turning negative, the bank is struggling to charge more for loans to borrowers than it pays out to depositors and it warned that net interest income would remain under pressure. – Nampa/Reuters

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