Price cuts boost data traffic at Vodacom

It's not surprising that Vodacom has seen a surge in data traffic over the past couple of months with most of us working from home - if we are fortunate enough to be in the position to - or just surfing the net. This has helped to compensate for declining prices after the Competition Commission put pressure on the sector to cut tariffs to make data more affordable and bring it in line with other countries. The mobile network operator reported annual results yesterday, with little sign of any negative impact as a result of Covid-19. However, it has tempered expectations for the year ahead.

Life Healthcare was also out with numbers and it has been affected. With non-emergency procedures postponed, it had more empty beds at its hospital. It has also been impacted in the other countries where it operates. So, while Vodacom is paying a final dividend, Life Healthcare is holding back on its interim payout for now. So too is RDI REIT as it preserves cash due to the uncertainty brought on by the pandemic.

AngloGold Ashanti could be in a strong position to pay an interim dividend after its first-quarter showed a big improvement in free cash flow, helped by a firmer gold price.

More on those stories to follow, along with the sad news that Group Five will delist from the JSE next month, 46 years after the construction group was formed. Unfortunately, there is nothing in it for shareholders as its business rescue practitioners say there is no remaining residual value.

Also, what could the SA Reserve Bank do that would be a fool's errand that would end badly for the country? In "Why do central banks do what they do?", top trader Andrew Kinsey takes on central banks for being far more contentious than they should be. Instead of being boring and sticking to laudable goals such as maintaining price stability, they have spent the past decade meddling where they shouldn't, with all sorts of distorting effects. Copying what the US Federal Reserve, the Bank of Japan or the European Central Bank do isn't necessarily what we should be doing. For those exposed to these jittery financial markets this is yet another valuable insight to heed.

Andrew's note follows on neatly from Mark Ingham's note last week, a Covid-19 credit markets Insight entitled "Lower for longer on rates?". This examines a strange situation locally of a bifurcated interest rate market and it looks at international precedent for the phenomenon of high and rising debt and lower yields, and what it could mean for South Africa. What lessons can be learned? What do high debts beget? Ingham Analytics provides the answer here.

Have a good day and stay safe.

Stephen Gunnion

Managing Editor, InceConnect

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