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’s economy has shrunk by 3.2% in the first three months of 2019 as power outages hit the mining and manufacturing industries. This is the largest decline in a decade; in 2009 during the credit crunch GDP dropped by 6.1%. Statistics South Africa says the manufacturing industry was the biggest drag on growth in the first quarter falling by 8.8%. Mining failed to lift itself out of a recession registering a third consecutive quarter of negative growth, construction slipped by 2.2%, while agriculture slump by 13.2%. This, while government, finance and personal services posted positive growth. Analysts have cut growth forecasts for 2019 to less than 1% and say that the sharp drop in GDP raises pressure on the South African Reserve Bank to lower interest rates.
- The rand slumped by as much as 2% during the day, but clawed back some of its losses and traded at R14.68 by the close of day. Yields on benchmark 2026 bonds climbed two basis points, reversing a drop of as much as four points. Banking shares dropped by as much as 4.1%, Absa and Standard Bank shares fell by 4.21%, First Rand shares was down 3.79% and Nedcor 3.5%. The country’s benchmark stock gauge gained 0.5%, sported by shares of companies that benefit from declines in the rand.
- Winners on the day; luxury goods company Richemont’s shares rose by 5.5%; Goldfields was up 5%, Sappi almost 5%, Quilter more than 4% and beer manufacturer AB InBev brewed to more than 4%. The JSE All share index remained in positive territory ending the day a half a percent higher.
- Mineral and Energy Affairs Minister, Gwede Mantashe has weighed in on the energy debate in the country saying all energy options are on the table, but he has not taken coal off the table, effectively throwing a life line to the country’s coal industry. Speaking at the Junior Mining Indaba for the first time with energy added to his ministerial portfolio, Mantashe said he wanted a combination of all energy options in the country. This included renewable energy.
- Accounting firm, Deloitte South Africa has replaced all senior auditors in the company including the partner, following the Tongaat-Hullet audit, which the company admitted last week cannot be trusted. It could be inflated by as much as R4.5bn and the company is likely to chop about a third of its equity on the 2018 balance sheet. Deloitte also audited Steinhoff’s books. More on this story on the Biznews website.
- A ‘phenomenal’ trade deal or investment is what President Cyril Ramaphosa needs to get the economy going; well this was promised to the United Kingdom today by President Donald Trump during his visit to London. Trump is trying to twist Britain’s arm on a decision to allow Huawei to build part of its 5G network, leave the EU and accept the import of chlorinated chickens, currently not allowed by EU rules into the UK. He is openly backing former Foreign Minister and Mayor of London, Boris Johnson as the new British Prime Minister. Johnson is in one of 12 candidates for Theresa May’s position.
Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.