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21-day lockdown, SA army to fight Covid-19; global economy in crisis; Old Mutual-Moyo; rand on ropes; Redefine
By Jackie Cameron
- South Africa is going into a 21-day national lockdown from midnight on Thursday. This was the announcement from President Cyril Ramaphosa, who said pharmacies, banks, petrol stations and grocers will remain open. The army will be deployed to assist in implementing the measures,. The army will give assistance to the police and the forces are encouraged to execute tasks, such as searches and cordons, in concert. Health Minister Zweli Mkhize has warned 60% to 70% of the country’s 59 million people could contract the illness over time. For more on how South Africa is tackling the coronavirus pandemic, listen to the BizNews Inside Covid-19 daily podcast with Alec Hogg.
- Finance ministers and central bank governors from the Group of 20 nations joined an emergency call on Monday to discuss the fallout from the coronavirus pandemic on the global economy and work toward a joint response. “We need to consolidate our efforts to support the containment of the virus, the maintenance of medical systems and the development of drugs and vaccines,” Japanese Finance Minister Taro Aso told reporters after the call. “Nations should carry out the ample economic fiscal measures needed.” The impact of the outbreak on supply chains and consumer demand will likely push the global economy into recession this year, warns Bloomberg. The G-20 will aim to finalise its action plan at the next virtual meeting in the spring, South Africa National Treasury Director General Dondo Mogajane told Bloomberg after the call. Among the agenda items are getting multilateral institutions including the International Monetary Fund and World Bank to respond, he said.
- Old Mutual has finally managed to get rid of its CEO, Peter Moyo. South Africa’s Supreme Court of Appeal has refused Moyo leave to appeal a decision overturning his temporary reinstatement and dismissing the case against his sacking in June, the insurer said on Monday. “Old Mutual welcomes this ruling as it enhances certainty and is another important step forward in ending the litigation instituted by Mr Moyo against Old Mutual,” Old Mutual is reported as saying.
- Looking at performance on the Johannesburg Stock Exchange, the big losers of the day were property stocks. The Redefine share price plunged a staggering 27% on Monday following news of the postponement of a dividend payment. But, that wasn’t the only problem plaguing Redefine. Property stocks have become unpopular, in particular those with exposure to Europe, which is facing a shift to online retailing and other problems, including the coronavirus pandemic which has hammered most businesses. Last week the FTSE/JSE SA listed property sector index suffered one of its worst days in history when it fell by more than 16%, pushing it down more than 50% year-to-date, including dividends and capital returns. Consensus among analysts is that the sector is about 15% overvalued. Mining stocks were the winners, with Anglo Platinum gaining more than 8% on Monday.
- South Africa’s rand weakened at the start of the week, threatening to break through a lifetime low against the dollar as concerns over coronavirus infections and likely stricter measures weighed on already shaky sentiment, as stocks fell, says Reuters. At 1510 GMT the rand traded 1.08% weaker at 17.7200 per dollar, after hitting a high of 17.5800 earlier in the session as it edged closer to an all-time worst level of 17.9950 in 2015. Bonds continued to tumble, with the government issue due in 2030 adding 63.5 basis points to 12.305%, reports Reuters. With South Africa reporting a sharp jump in confirmed coronavirus cases on Monday to 402, from less than 50 just over a week ago, sentiment towards the rand and other local assets is set to remain on the ropes, says the newswire. “The world is highly unpredictable, and we cannot know when foreign selling of (South African) assets will stop, nor how much economic damage we will end up inflicting on ourselves,” Anchor Capital Chief Investment Officer Nolan Wapenaar is reported as saying.
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Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.