The Party of Man­dela Is at Odds With It­self

Scan­dal ▶ South Africa’s pres­i­dent is un­der pres­sure for al­leged graft ▶ “This is the most dif­fi­cult sit­u­a­tion ... in the last 20 years”

Bloomberg Businessweek (North America) - - Global Economics -

As if his coun­try’s 25 per­cent un­em­ploy­ment rate, stag­nant econ­omy, and de­te­ri­o­rat­ing credit rat­ing weren’t bad enough, South African Pres­i­dent Ja­cob Zuma faces a political graft scan­dal that threat­ens to wreck the party of Nelson Man­dela. With more than 60 per­cent of the vote in ev­ery par­lia­men­tary elec­tion since 1994, the African Na­tional Congress re­mains the top political power in South Africa. Yet in­ter­nal divi­sions are pit­ting the forces of fis­cal dis­ci­pline, rep­re­sented by Fi­nance Min­is­ter Pravin Gord­han, against the pro-zuma camp, which has less re­gard for in­vestors and fi­nan­cial mar­kets.

Over the past few years, Zuma has drawn fire over the slow pace of govern­ment re­form and a mount­ing num­ber of scan­dals and mis­steps, in­clud­ing the ap­point­ment of an in­ex­pe­ri­enced

at the end of next year, but the past three months have left him con­sid­er­ably weak­ened.

Zuma has proven to be a sur­vivor. Dur­ing the strug­gle against apartheid, he was the ANC’S in­tel­li­gence head and spent a decade im­pris­oned on Robben Is­land with Man­dela. He has since weath­ered cor­rup­tion charges and was ac­quit­ted in a rape trial. This is the most pres­sure he’s been un­der in his nine years as party leader and his seven years as the na­tion’s pres­i­dent.

Tough months lie ahead. The ANC may lose con­trol of a cou­ple of cities in lo­cal elec­tions. South Africa’s high­est court is rul­ing on whether Zuma vi­o­lated the con­sti­tu­tion by ig­nor­ing di­rec­tions from an anti-graft om­buds­man to pay back state funds put to­ward an upgrade to his home. A credit-rat­ing down­grade could come as early as June. �Franz Wild

The bot­tom line A political scan­dal in South Africa is adding to the coun­try’s eco­nomic prob­lems, as low com­mod­ity prices hit the min­ing in­dus­try.

The prin­ci­pal value of the Re­tire­ment Funds is not guar­an­teed at any time, in­clud­ing at or af­ter the tar­get date, which is the ap­prox­i­mate year an in­vestor plans to re­tire (as­sumed to be age 65) and likely stop mak­ing new in­vest­ments in the fund. If an in­vestor plans to re­tire sig­nif­i­cantly ear­lier or later than age 65, the funds may not be an ap­pro­pri­ate in­vest­ment even if the in­vestor is re­tir­ing on or near the tar­get date. The funds’ al­lo­ca­tions among a broad range of un­der­ly­ing T. Rowe Price stock and bond funds will change over time. The funds em­pha­size po­ten­tial cap­i­tal ap­pre­ci­a­tion dur­ing the early phases of re­tire­ment as­set ac­cu­mu­la­tion, bal­ance the need for ap­pre­ci­a­tion with the need for in­come as re­tire­ment ap­proaches, and fo­cus on sup­port­ing an in­come stream over a long- term postre­tire­ment with­drawal hori­zon. The funds are not de­signed for a lump- sum re­demp­tion at the tar­get date and do not guar­an­tee a par­tic­u­lar level of in­come. The funds main­tain a sub­stan­tial al­lo­ca­tion to eq­ui­ties both prior to and af­ter the tar­get date, which can re­sult in greater volatil­ity over shorter time hori­zons.

Three days be­fore its March 25 open­ing, Bat­man v Su­per­man: Dawn of Jus­tice was met with some harsh early re­views. The crit­ics weren’t kind to the Caped Cru­sader (Ben Af­fleck), the Man of Steel (Henry Cav­ill), or di­rec­tor Zack Sny­der. One saved his venom for an un­seen vil­lain, the stu­dio that made the film, Warner Bros. The movie is “a sleek, stylish com­mer­cial by a stu­dio des­per­ate to birth a new cash cow post- Harry Pot­ter,” wrote the Mi­ami Her­ald’s film critic.

For Warner, more is rid­ing on the movie than on any other sin­gle re­lease this year. It’s im­por­tant not only for the money it could pull in, but also be­cause it could be a step­ping­stone to cul­ti­vate a ded­i­cated au­di­ence for fu­ture films from its DC Comics fran­chise. “Suc­cess is giv­ing the fans an ex­pe­ri­ence that’s so en­joy­able and en­ter­tain­ing for them that we deepen their com­mit­ment to DC as a whole, and so the movies keep grow­ing,’’ says Greg Sil­ver­man, a co-head of Warner’s film stu­dio.

The stu­dio es­ti­mates the film’s open­ing-week­end box-of­fice re­ceipts will bring in $100 mil­lion to $140 mil­lion do­mes­ti­cally and an ad­di­tional $200 mil­lion from 61 other coun­tries. An­a­lysts at Box­of­ on March 23 raised their fore­cast for the week­end to $179 mil­lion, from $159 mil­lion five days be­fore, be­cause of strong pre­sales, de­spite the re­views. Those num­bers—some an­a­lysts pre­dict even big­ger re­turns—could help Warner shake off its 2015 movie losses. Among its no­table flops last year was Pan, a retelling of the Peter Pan fairy tale, which an­a­lysts es­ti­mate gen­er­ated more than $100 mil­lion in red ink, ac­cord­ing to the Hol­ly­wood Reporter.

For Bat­man v Su­per­man to be as prof­itable as Walt Dis­ney’s Marvel movies or Warner’s own Dark Knight Bat­man movies, which had an av­er­age profit mar­gin of 44 per­cent, it would have to gross $1.15 bil­lion world­wide at the box of­fice, as­sum­ing pro­duc­tion and global mar­ket­ing costs of about $400 mil­lion, es­ti­mates Wade Holden, an an­a­lyst at SNL Ka­gan. That com­pares with a global gross of $1.5 bil­lion for Dis­ney’s first Avengers movie and $668 mil­lion for the Su­per­man ori­gin story Man of Steel.

“This is a big roll of the dice,” says Jonathan Kuntz, a film his­to­rian who teaches at the Univer­sity of Cal­i­for­nia at Los An­ge­les. Suc­cess could lead to a whole world of spinoffs and se­quels;

2015 do­mes­tic box-of­fice mar­ket share by stu­dio 22% Uni­ver­sal 22% Other 20% Dis­ney 9% Sony

In 2009 it was 14% Warner Bros.

13% 20th Cen­tury Fox

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