| Sasol's shares fell yesterday after the energy and chemicals group said it still planned to pursue a rights issue that could see it raise up to $2 billion next year - depending on its success in selling non-core operations as it positions itself for sustained profitability in a low oil price environment. Last year was far from profitable, however, as massive impairments pushed it into a significant but not unexpected loss. While Sasol's current shareholders can choose whether to participate in the proposed capital raise or not, some investors may remember a time, prior to its partial privatisation and JSE listing in 1979, when pension fund money was invested in the former parastatal under the National Party government's policy of prescribed assets - without the consent of investors and pensioners. According to a report in this week's Sunday Times, the government may be about to amend pension fund regulations to allow development finance institution to dip once again into retirement fund savings at favourable rates to fund infrastructure projects. In Back to the precipice, Allan Greenblo, editorial director of Today's Trustee, outlines what's at stake if the ANC government reverts to a policy that was abolished in 1989. Also in today's newsletter, Momentum Metropolitan has warned of a sharp decline in earnings as it alerted the market to a data break at one of its subsidiaries, Afrimat has acquired more iron ore assets as it bulks up its commodities business, and Tiger Brands has lined up buyers for its meat processing business. I hope you have a good day. Stephen Gunnion Managing Editor, InceConnect
Recent notes of topical interest from Ingham Analytics The Sasol annual results presentation seemed as though it came from a parallel universe to the one long-suffering shareholders live in. Equivocation on a likely rights issue means we're going to have wait months before we get clarity. Dividends will be a long wait too. The income statement now feels the full effects of depreciation and interest due to Lake Charles. Debt is 90% dollar denominated at $10 billion. Contrary to management projections a few months ago, Lake Charles lost money, $311 million after depreciation. Our last report "Going, going for a song" dated 5 August remains relevant and we'll do an update shortly. BHP reports today so our preview note "Iron ore up, all else down" will be of interest in this regard. Brent oil is struggling to get above $45/bbl and "Rolling in the Deep....." will be of interest on how you position yourself. WTI and Brent cash prices are 30% below levels at the beginning of the year - in fact, Sasol mentioned that higher oil prices are not on the agenda soon. | 