The world is changing fast and to keep up you need local knowledge with global context.
By Jackie Cameron
- Supermarkets have been inundated by shoppers and businesses are preparing to shut down operations as the country braces for a three-week lockdown aimed at curbing the spread of the coronavirus. The number of confirmed infections rose by 153 to 554 overnight, with 302 of the cases in Gauteng, Health Minister Zweli Mkhize is reported by Bloomberg as saying. “How long will the outbreak last? I don’t think anybody can ever tell us that,” Mkhize said. “It is not possible to give any predictions. For the next week or two we still expect the numbers to be going up. We don’t want anybody turning around and saying you have got a lockdown, why are the numbers going up?” The lockdown, announced by President Cyril Ramaphosa on Monday night, comes into effect at midnight on March 26. Citizens will only be allowed to leave their homes to buy food and medicine, seek medical care and collect welfare grants. Grocers, banks, filling stations and the Johannesburg Stock Exchange can continue operating, but most mines and furnaces will have to shut.
- Economists say South Africa is in a basket of countries that will be in recession, with one warning the economy could shrink by 5%. The curbs instituted to tackle the virus are likely to cause the economy to contract 5% this year, Shireen Darmalingam, an economist at Standard Bank Group, is reported as saying. Growth in emerging economies outside China will stall this year, with recessions taking hold in Latin America, Russia and South Africa, says the Institute of International Finance, on Bloomberg. The IIF cut its forecast for global growth for the third time this month, taking it to a minus 1.5%, suggesting the US and the Eurozone are already in recession, says Bloomberg.
- SA mines will come to a standstill, which has spurred platinum and palladium prices upwards. From midnight Thursday, all but a few coal operations needed to fuel the country’s power stations are expected to be included in a nationwide lockdown aimed at containing the coronavirus, notes Bloomberg. The mining industry is labor intensive and many of the thousands of workers who will be affected by the shutdown live in close proximity to one another in mining communities around the operations, says the newswire. For global metal markets, the biggest impact may be in platinum and palladium – South Africa accounts for 75% of the world’s platinum supply and 38% of palladium supplies, says Bloomberg. Prices for both metals, which are used in autocatalysts, extended gains on Tuesday.
- The City Lodge Hotels group in crisis, as the company struggles to keep afloat after the coronavirus pandemic crushed global hotel occupancies. The company warns in a Stock Exchange News Service announcement that it may shut more than 24 of its 62 hotels after occupancy rates plummet “Prior to the announcement of the lockdown, the Group had planned for the temporary closure of 24 of its 62 hotels. The extent of further closures will be dictated by the degree to which the Group is called upon to provide support to government and essential and critical business continuity services, as well as other enabling services in the form of either quarantine facilities or staff accommodation,” it says.
- Stark warning has been issued by a real estate investor that troubles in the US commercial mortgage market could infect global banks on a scale worse than that precipitated by events in 2008. Real estate investor Tom Barrack said the US commercial-mortgage market is on the brink of collapse and predicted a “domino effect” of catastrophic economic consequences if banks and government don’t take prompt action to keep borrowers from defaulting. Barrack, chairman and chief executive officer of Colony Capital, warned in a white paper and in a subsequent interview on Bloomberg Television of a chain reaction of margin calls, mass foreclosures, evictions and, potentially, bank failures due to the coronavirus pandemic and consequent shutdown of much of the US economy. “To keep people employed, you have to support the employers,” he said Monday in the interview. “The biggest part of employer expense is rent. When commerce stops and they can’t pay rent and they can’t pay interest on the debt, and then the banks and the intermediaries can’t pay their investors, it all collapses.” Barrack, 72, said the impact could dwarf that of the Great Depression, affecting everyone from home owners to real estate developers to hotel operators.
- Britain has told airlines that state investment to help them survive the coronavirus crisis will only be considered once they have looked at the possibility of raising capital from existing investors, a person familiar with the situation has told a Bloomberg journalist. UK finance minister Rishi Sunak has written to airlines and airports to set out how they could benefit from a government help package for businesses set out last week. “The government expects the sector to look at raising capital from existing investors,” the person added. UK-based airlines easyJet and Virgin Atlantic asked for government support earlier in March to help them survive a period when air travel has come to a standstill. But IAG, the parent company of British Airways, has not asked for any help and has long been a vocal opponent of state support for airlines. easyJet has come under fire for asking for government support in the same week as it paid out 174 million pounds to shareholders in dividends, adds Bloomberg.
Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.