Water levels ‘threaten production’
The stock has climbed 29 percent this year, the best performer on the seven-member FTSE/JSE Africa banks index, which has gained 19 percent over the period.
“We expect stronger growth in the Barclays Africa Group markets beyond South Africa, despite fiscal and external account challenges in some of the larger economies,” the banking group said.
“We expect mid-single digit loan growth in South Africa this year. Our net interest margin should widen, given rising interest rates in South Africa, while our credit-loss ratio is also likely to improve slightly.”
The company declared an interim dividend of R4 a share.
Barclays, the UK’s secondlargest bank by assets, returned to a profit in the second quarter, helped by lower provisions and cost cuts.
However, earnings at its investment bank, which is being downsized, slumped to £567 million (R10.2bn) as the company made less money from equities and currencies. – Bloomberg Barclays, page 26 SAPPI, the world’s biggest producer of dissolving wood pulp, was struggling to maintain cellulose production at its main South African plant because of a water shortage, a person with knowledge of the matter said yesterday. The situation was reaching a critical stage, said the person, who asked not to be identified because the news had not been made public. The Saiccor plant, 50km south of the port of Durban on the east coast, pumps water from the Umkomaas River estuary that flows into the Indian Ocean. Below-average rainfall and the absence of a snow melt in the Drakensberg mountains had lowered water volumes in the river, the person said. Sappi did not “anticipate any disruption to production”, Andre Oberholzer, a spokesman, said. The Saiccor mill had contingency arrangements for the low flow experienced in KwaZulu-Natal rivers before summer rains started in about a month, he said. Saiccor can produce 800 000 tons a year of dissolving wood pulp and is increasing its focus on the material which is used to make luxury clothing, sportswear and pharmaceuticals, as these carry a higher profit margin than paper. Sappi is scheduled to report fiscal third-quarter results this morning. Shares dropped 1.33 percent to close at R43 on the JSE yesterday. – Bloomberg