The world is changing fast and to keep up you need local knowledge with global context.
By Jackie Cameron
- South Africa’s central bank on Wednesday launched a bond-buying programme, as it followed other countries in quantitative easing measures to drum up demand in credit markets and support banks. The country’s bond market has been short of buyers since February, says Reuters, which points out that South African banks and financial firms have in recent weeks seen a sharp increase in redemptions of short-term funds, as well as higher margin calls, while primary dealers – who buy government securities to sell on the secondary market – have struggled for buyers. Adrian Saville, head of Cannon Assets, is quoted as saying that interest rate cuts are on the cards in coming weeks. “We’ve got a lot of room to cut, about 5% of ammunition,” he said. “We’re looking at a budget deficit in 10% territory after this passes. But in the meantime the SARB has latitude to be far more aggressive, even leaning into the world of helicopter money and giving every South African “x” amount for the next three months,” said the investment expert.
- Resources and Energy Minister Gwede Mantashe says the possibility of loadshedding during the 21-day nationwide lockdown is unlikely because demand for electricity from industry will disappear.“ The supply of fuel to the relevant critical and essential services, as well as the supply of coal to Eskom for electricity supply and liquid fuels production, are critical during this period. “Supplying Eskom with coal is a requirement and with the lockdown, demand will be very low so it is unlikely that we will have loadshedding,” said the Minister.
- The South African government announced some tough, and some unpopular, restrictions – including banning the sale of alcoholic drinks – as the country prepared for a 21-day nationwide lockdown. The government released regulations late Wednesday on how the lockdown will work, including the closure of most facilities where people can gather, such as restaurants, beaches, churches, hotels, bars and casinos, says Bloomberg. The sale and distribution of alcohol will be banned, and limits will be imposed on the number of passengers that can use public transport if they’re allowed to travel, it points out. People will be prohibited from exercising outside their homes, too. Those who contravene the rules may be fined or imprisoned for as long as six months, says the newswire. Other key developments include: that the Gauteng government will accommodate homeless people in schools to reduce the risk of them becoming sick; work has begun on repairing a 40km fence between South Africa and Zimbabwe to minimise cross-border transmissions; SAA has suspended all local flights; and all tourist attractions have been instructed to close their doors.
- Grocery retailer Shoprite has awarded employees a bonus as it gets set for a busy period in which South Africans will have to cook at home for three weeks. The Shoprite Group, the largest private employer in South Africa, has announced a once-off R102m appreciation bonus for its shop floor and distribution centre employees to thank and support them for their tireless efforts to feed the nation in these unprecedented times. This follows President Ramaphosa’s call on larger businesses in particular to take care of their workers during this period and to marshal every resource and their every energy to fight this epidemic, it said in a statement. “Supermarket employees are at the forefront of serving and safeguarding customers by implementing the Group’s strict hygiene measures while distribution centre employees are key players in the retail supply chain to restock stores as quickly as possible.
- South Africa will continue to process platinum group metals (PGMs) during its 21-day coronavirus lockdown. South Africa’s mining sector accounts for about 18% of the nation’s gross domestic product, says Reuters. “Production in gold, chrome, manganese and other sectors will be scaled down, while processing of surface materials in the PGM sectors will continue,” Gwede Mantashe told journalists.
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