Flash Briefing: Eskom fears sabotage; Europe ignores Pence; Citi’s Brexit boost

By Alec Hogg

In today’s global business headlines:

• Fault lines continue to widen between the United States of America and its traditional western allies. In Germany over the weekend, US vice president Mike Pence’s call to ratchet up pressure on Iran was brushed off by the Europeans. Instead, after senior officials met with the Iranian Foreign Minister yesterday, they urged constructive dialogue. And across the channel, the British government has concluded the UK can mitigate any possible risks of using 5G equipment supplied by Chinese telecoms giant Huawei. The US has been urging its allies to boycott Huawei, claiming its equipment could help China conduct espionage or cyber sabotage.
• Brexit supporters are celebrating yesterday’s news that Citigroup is negotiating to invest $1.6bn in buying the 42 storey building it occupies in London’s Canary Wharf. Citigroup has been renting the 200m high skyscraper since 2001. Last week the US bank reported net income of $18bn for 2018, up 14% on 2017. But the headlines focused on the 4% pay rise granted to CEO Michael Corbat, who was paid $24m in 2018. Corbat was the 10^th highest paid CEO in the financial sector, well behind the $31m of JP Morgan’s James Dimon and Morgan Stanley’s James Gorman’s $29m.
• Ride hailing software company Uber generated $3bn in sales during the three months to end December, 25% above the same period a year before. But analysts were unimpressed, pointing out that year on year growth has slowed to its lowest level since Uber started releasing numbers two years ago. Uber is aiming to list its shares in New York later this year, targeting an IPO valuation of $120bn. That might be a stretch now with the latest revenue growth rate having slowed from 70% in the first quarter of 2018 and 38% in the third quarter. Uber did, however, cut its quarterly loss by $150m to $865m – taking 2018’s total loss to $3.3bn, down from $4.5bn in 2017.
• In South African related news, Eskom continues to dominate the headlines. Yesterday’s Sunday Times newspaper reported that the government is to deploy police and intelligence officers at Eskom power stations to protect against sabotage. Trade unions staged a nationwide protest last week and are planning another demonstration tomorrow, protesting against probable job losses. In his Budget Speech on Wednesday, finance minister Tito Mboweni is expected to make substantial allocations to bail out the teetering utility.