Investments

by Delia Robertson

Bank Of America Investment South African bank ABSA has accepted an offer of $5.5 billion from Britain's Barclays bank for a 60-percent stake in the local group.

end investment company. The Company invests over 50% of the value of its total assets in the common shares or securities convertible into common shares of companies conducting, as the major portion of their business, gold mining and related activities in the Republic of South Africa. The balance of the Company's total assets, other than minor amounts, which may be held in cash, may be invested in common shares or securities convertible into common shares of companies engaged in other business of varied types in the Republic of South Africa; be held in the form of gold bullion or certificates of deposit (CDs), or be invested in common shares or securities convertible into common shares of companies primarily engaged outside of South Africa in extractive or related industries or in the holding or development of real estate.

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A non resident is a person whose normal place of residence is outside the common monetary area of South Africa. Non residents can buy property in South Africa, but should they require a mortgage loan it will be subject to foreign exchange approval from the South African Reserve Bank. The mortgage loan may not exceed 50% of the value of the property. The application to the Reserve Bank can be handled by any of the commercial banks through which such a person wishes to deal.

Banking Investment May 10, 2005 (AXcess News) Johannesburg - South African bank ABSA has accepted an offer of $5.5 billion from Britain's Barclays bank for a 60-percent stake in the local group, the largest foreign investment in South Africa since apartheid ended. The deal follows regulatory approval by the South African authorities.The ABSA board unanimously agreed to recommend the Barclay's offer after two large shareholders agreed to sell their 28 percent stake to Barclays.

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Investment Solution Strategic A further 35 percent of shareholders have expressed support for the deal, which could give Barclay's a 63 percent holding in ABSA. Barclay's is to acquire 32 percent immediately and the balance later.Finance Minister Trevor Manuel announced Sunday the Barclay's offer had won full regulatory approval, saying the transaction would be the single largest foreign direct investment in South Africa since the end of apartheid. Mr. Manuel characterized the deal as a vote of confidence in South Africa's economic and political development.

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Investment Banking Services Tony Twine of Econometrix, an independent think-tank, told VOA that the deal is an indication of trust in South Africa's economy, and especially its financial sector.

Bank Investment "And it also gives a fairly clear signal that the financial sector is relatively happy with the South African situation and in particular the central banking system, within the South African context," he said. "And if that is seen to be healthy and worth investing in, a whole lot of other things in South Africa will look like they are worth investing in, as well."

Alternative Investment Mr. Twine said that the sophistication of South Africa's financial sector means that putting together such deals is time-consuming, but he says serious potential investors can rest assured that the regulatory system works in their favor.

Online Investment Services "Because of the complexity of the South African financial system, which is world class, there is always going to be a long route between point A and point Z, I think that it does show that there are no unnecessary stumbling blocks or uncrossable hurdles in the way of foreign investments in this or possibly any other sector," added Mr. Twine.

Accompany Essential Investment The Barclay's investment means a significant cash flow into the South African economy where the gross domestic product is about $500 billion.

Investment Company But it remains to be seen whether the sellers will reinvest in equity or whether some will invest their cash in entrepreneurial endeavors. Mr. Twine says this is South Africa's greatest economic need."South Africa needs entrepreneurial risk much more than anything else at the moment to consolidate its growth rate at above four percent per annum, and in fact to make it grow at levels higher than that," he explained.ABSA is one of South Africa's four major banks and the authorities are expected to carefully monitor the impact of Barclays takeover of ABSA in the coming months. Finance Minister Manuel says any future deals will be decided on a case-by-case basis.

Investment Management Solution The deal marks Barclays' return to South Africa, after leaving in 1986 during protests in Britain against doing business under apartheid. Before selling at a loss, Barclays was South Africa's largest bank.AXcess News will be reporting on any new market trends related to this story. Members should watch their in-box for late breaking business news. If you're not a member, consider joining now.

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