By Linda van Tilburg
In today’s global business headlines:
- A motion authorising British Prime Minister Theresa May to request an extension to the Brexit deadline was passed by a majority of 210 votes last night. Earlier an amendment for a second referendum was rejected. The motion requests an initial extension to the end of June for Brexit but leaves room for a further extension. The EU has indicated that it would consider the request favourably, but it is up to the 27-member states to decide.
- Meanwhile South Africa and its neighbours are quietly ensuring that there will be a steady supply of South African avocados, oranges, grapes and rooibos to the Brits even if they lost out on French cheese and veggies from Europe due to Brexit. A ministerial meeting between the trade minister of the UK, Mozambique and member states of the Southern African Customs Union is scheduled for later today to seal a post-Brexit trade deal with the UK. Rolling over the existing agreement will happen under a bridging deal, which would apply for six months while a replacement agreement is finalised.
- The decision by the Ethiopians to ask France to examine the black boxes from the Boeing 737 Max jetliner that crashed near Addis Ababa means the fate of the grounded Boeing jets are now in the hands of the French. Airlines all over the world are looking to find alternative aircraft to rent and Boeing is expected to be saddled with compensation claims. The company could see $2bn dollar cash flow pushed into a later quarter as airlines hold back on final payments for jetliners they have ordered, and airlines may start looking for alternatives from Airbus or Chinese company Comac who is keen to break the Boeing-Airbus duopoly.
- Fiat Chrysler is recalling more than 800,000 of its gasoline-fuelled vehicles to replace their catalytic converters. This would require an additional 77,000 ounces of palladium, the company revealed. It could spur additional demand from the palladium market which is good news for South Africa, the world’s second largest palladium producer.
- In California, Airbnb and Expedia failed to avoid regulation by Santa Monica – the city holds the companies responsible for booking rentals that are not licensed by the city. It is one of many cities in the world blaming home-sharing platforms for a rapid proliferation of short-term rentals leading to a shortage of affordable housing. It is not the only city taking on Airbnb, Paris wants to slap a €12.5m fine on the company for posting illegal advertisements.
- Back in South Africa, Standard Bank is going to close 91 of its branches which would put 1,200 jobs on the line. The move comes as the bank has decided to move to a digital banking offering for its customers. Most of the closures will happen by the middle of the year. Standard Bank says some of the employees will have jobs in the new operating model, others will receive a comprehensive exit package and there will money to train employees who have lost jobs to help them re-enter the labour market.
- Morgan Stanley says it’s time to bet on South African Stocks. The investment bank acknowledges that there are dark clouds casting shadows on South Africa’s economy and equity market but says the potential rewards for investors mean the country’s stocks are worth the risks. Morgan Stanley says investors are turning more optimistic; a recent survey indicated that foreign equity investors are more likely to add than reduce South African stocks in the next six months. And it believes that China’s recovery should filter through to South Africa.
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