The world is changing fast and to keep up you need local knowledge with global context.
By Linda van Tilburg
Here is today’s Biznews Flash Briefing
- South Africa needs to take “robust actions” to reduce its fiscal deficit and reverse the increase in public debt, the International Monetary Fund has said. The IMF says the fiscal deficit is set to worsen as weak growth constrains revenue, current expenditure remains rigid, and public enterprises require additional support. This comes after a visit of the IMF to South Africa. It says, as a result, debt pressures are likely to further increase in the near term. The IMF also forecasts that the state would probably miss initial revenue-collection targets by more than R42bn in the 2018-19 fiscal year. Eskom is placing strain on the country’s balance sheet and action is needed to reduce the fiscal deficit, reverse the ongoing increase in public debt, and restore much-needed fiscal buffers to protect the government’s development objectives and its ability respond to shocks, the institution said.
- The Absa purchasing managers’ index (PMI) has dropped again in May after a slight rise in April. It is now on a seven-month low. The index compiled by the University of Stellenbosch’s bureau for Economic Research fell to 45.4 index points in May from 47.2 points in April. Absa says it does not bode well for a recovery in activity in the manufacturing sector.
- South African vehicle sales declined for the fourth time in five months in May. Data released by the National Association of Automobile Manufacturers of South Africa, NAAMSA indicates that there was a 5.7% fall in sales, which is 40,506 units. In the past year, April was the only month in which no drop in sales were recorded.
- Well, it is not all bad news. The rand was slightly firmer today because of pressure on the dollar amid fears that US interest rates may be cut faster than expected. At the close of the JSE, the rand was R14.47 to the dollar. The median forecast of economists in a Bloomberg survey puts the rand at 14.09 per dollar by year-end, an appreciation of about 3%. The options market gives odds of three out of four the rand will reach that level, according to Bloomberg’s probability calculator.
- The all-share index was up 1.26%. Major movers on the day were Vivo Energy, which rose by 18.6% and the Resilient Property Income Fund lived up to its name and was up by 5.3%. However, the shares developer and commercial real estate manager Globe Centre fell by 44% and Imperial Holdings was down more than 5%.
- In the latest salvo from Public Protector Busisiwe Mkhwebane against Minister of Public Enterprises Pravin Gordhan, she announced that she would be serving Gordhan with a Section 7(9) notice, which gives him 10 days to respond. Mkhwebane took to social media service Youtube to say she was not targeting Gordhan. “There will be a lot of questions, there will be allegations that I am still persecuting Gordhan, but I am doing my work. I understand when it comes to the issue of the rogue unit, people have lost lives, people have been tainted, and I think that is still going to happen. I am ready to receive all the backlash, but I am doing the work, I am not targeting or harassing any minister, specifically Mr Gordhan.”
Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.