Era coming to an end for African Bank, and Anthropic hits $100 billion milestone

The rand ended the week on the front foot against the US dollar, closing Friday out at R16.27/USD, thanks to higher commodity prices. 

However, the local currency gave up significant ground against the dollar during the week as the US Federal Reserve hiked interest rates. 

This makes it more attractive for investors to put their money in US assets, as it raises the risk-free rate of return. 

As a result, money tends to flow out of emerging market currencies, like the rand, and into the dollar when the Fed hikes rates. 

This makes it likely that the Reserve Bank will hike rates in response on 23 September to support the rand and defend against a looming shock from higher fuel prices. 

The Federal Reserve has indicated that further tightening may be required to return inflation in the US to its 2% target. 

There is no resolution in sight to the war in Iran, which continues to choke international oil supply through the Strait of Hormuz. 

Countries, including Saudi Arabia, have been able to get oil out of the Persian Gulf following US guidance, turning off transponders, and sailing “the Oman route”. 

This is still a fraction of the pre-war flows, however, and with the Saudis shutting down their East-West pipeline to use the Red Sea, oil supply remains constrained. 

The pipeline should be up and running again soon, helping to alleviate some pressure, and increased supply from Venezuela in the coming months will help. 

French President Emmanuel Macron has called an emergency meeting of the G7 to consider releasing strategic petroleum reserves. 

Crucially, Europe holds much of its strategic reserves in already-refined diesel, petrol, and jet fuel, meaning it will directly contribute to lower product prices. 

The JSE All Share closed the week down over 1% on Friday as the market digests the impact of higher rates for longer in the United States. 

Important finance and investment news 

The new Buffett running Berkshire: Warren Buffett has stepped down as Berkshire Hathaway chairman, with his son, Howard, replacing him. His task will be to guard the unique culture Warren created at Berkshire to keep the conglomerate that ranges from candy to railroads together. [Wall Street Journal] 

An era of expansion comes to an end: African Bank’s new leadership team is tasked with consolidating its sprawling business units after an era filled with acquisitions to bulk up the lender. These acquisitions diversified the business, but came at a cost. [BusinessDay]

United States pumping money into Africa: The US has approved new investments aimed at challenging China’s primacy in Africa. Its investments include $414 million for a uranium mine in Niger and hundreds of millions for digital infrastructure providers. [Semafor]

 New law for business’ hiring foreign nationals: New proposed legislation to regulate the employment of foreign nationals has been opened for public input and comments. The Employment Services Amendment Bill, among other provisions, will require employers to double-check whether specific skills are available in South Africa before appointing foreign nationals. [EWN] 

Anthropic hits $100 billion revenue run-rate: Anthropic is on pace to generate $100 billion in annual revenue, up 50% from two months ago. The company that did not exist six years ago can be one of America’s 50 largest companies by revenue by the end of the year. [Yahoo Finance/Axios]