The world is changing fast and to keep up you need local knowledge with global context.
By Linda van Tilburg
In today’s global business headlines:
- From the United States, President Donald Trump has grounded the whole fleet of Boeing 737 Max planes in America. The grounding will remain in effect pending further investigation of the crashed aircraft’s flight data recorders and cockpit voice recorders. The news comes after the last of the US allies, Canada announced earlier to bar Max 8 jets from its airspace. The decision is likely to increase the slide of Boeing stocks which has slumped 11% in the past week. In a snub to Boeing, Ethiopia sent the black boxes of their crashed aircraft to Europe for investigation.
- Business confidence in South Africa fell to the lowest level in two years in the first quarter of 2019. According to a Rand Merchant Bank and Stellenbosch University gauge two-thirds of respondents were dissatisfied with the current conditions, which RMB described as worrying low. Confidence declined from 31 in the last quarter of 2018 to 28 in the first three months of this year. RMB Chief Economist Etienne le Roux says Ramaphosa’s efforts to expose corruption and rebuild institutions will bear fruit in the longer term, but South Africa will not be able to shift to a lasting, higher growth and prosperity path without more short-term pain. Confidence in the retail sector is at its lowest since 2013 and the power blackouts dampen the recovery. The only sector in which confidence has grown, is new vehicle trade but car sales remain dismal.
- There is one market that is more positive about Brexit. The British pound strengthened on the news that MPs rejected the possibility of crashing out of the EU without a deal. The pound became the best-performing currency of its G-10 peers this year, trading at $1.32 last night. After Prime Minister Theresa May’s deal was rejected twice, an amendment was narrowly passed by only 4 votes that the UK can’t leave the EU without a deal. The UK is now likely to request an extension to the exit date of 27 March. All 27 EU countries have to consent to this so there is still a danger that the country may leave the EU with no agreement.
- From Tesla, CEO Elon Musk is going to pitch another all-electric vehicle and perhaps us plebs can finally say, not only Iwantoneofthose, but Icanaffordoneofthose. He is expected to reveal the Model Y compact sport-utility vehicle in Los Angeles. Tesla has been battling to build an affordable electric car and this is Musk’s bid to move beyond a luxury brand. The question on everybody’s lips is whether he can pump up volumes of affordable cars. He needs a hit to turn Tesla into a mass-market car company.
- And finally, South Africa’s Johann Rupert who has been rather quiet since that interview with Power FM. Cartier, the luxury goods company in the Rupert stable is going to auction off…not diamonds, watches or jewellery, but wine. In a week’s time, Sotheby’s is going to auction off a selection of wines from Cartier’s secret cellar with a special label ‘nogal’ and the proceeds, expected to be in the region of £250,000 (R4.67m) will go to the Cartier Philanthropy Foundation, which works to improve the lives of women and children in the least developed regions.