The world is changing fast and to keep up you need local knowledge with global context.
By Jackie Cameron
In today’s Biznews Flash Briefing:
- South Africa’s manufacturing sector has perked up, with more cars, electronics, metal products and furniture produced than expected. This is a ray of sunshine, after the economy shrunk by more than 3% in the first three months of this year. Statistics South Africa released details of manufacturing output, which expanded by more than 4.6% year-on-year in April. This is the biggest growth since June 2016, says Reuters. Analyst surveyed by Reuters had forecast a modest expansion of 1.35%. But, production of motor vehicles soared by 18.6%, electrical machinery jumped 12.2% and the basic iron and steel category saw 9.4% growth. Only clothing and footwear showed a contraction, reports the news agency. The improvement is attributed to better service from Eskom, with fewer blackouts in April.
- Cape Town property prices have been falling. The latest data from FNB shows that house prices have been plunging in the most expensive suburbs and at best have moved side-ways in the more affordable neighbourhoods. FNB numbers indicate that, in the first four months of this year, the city has experienced the slowest growth in house prices since the global financial crisis (at the end of 2009) and has recorded a second consecutive quarter of decline in real house prices, reports Fin24. FNB analyst Siphamandla Mkhwanazi is reported as saying that the bank reads the figures “as a continuation of the normalisation process to align prices with economic fundamentals in the region.” According to FNB, the sought-after Atlantic seaboard has seen its average house price growth plunge from a multi-year high of 25.5% year on year in the first quarter of 2016 to an all-time low of -5.1% during the same period in 2019, says Fin24. The deflation appears to have spilled over to other regions, said FNB.
- In global developments, South Africa’s Naspers has struck its biggest fintech deal yet. Naspers Ltd.’s PayU has agreed to buy Turkish digital payments company Iyzico for $165m. The deal, says Bloomberg, will expand the company’s unit’s exposure to Turkey’s e-commerce market, which is growing at more than 10% a year, The acquisition must still be approved by regulators and is expected to close in the next few months, it said. Technology investor Naspers which is based in South Africa has proposed moving most of its Internet businesses to a new listing in Amsterdam, the firm said last month. The firm holds a 31% stake in Chinese internet giant Tencent Holdings Ltd. that’s valued at about $130bn, according to data compiled by Bloomberg. You can find more on that story on BizNews.
- Deloitte and KPMG have been in the spotlight in South Africa in connection with their complicity and/or negligence in corporate accounting scandals and state capture. While it’s business-as-usual for these Big Four accounting firms in South Africa, in India the government wants to ban these firms for similar wrong-doing. The Indian government took control of financial services firm IL&FS in October, reports Reuters. The group has a debt of more than 910 billion rupees ($13.1bn), it says. Auditors have come under close scrutiny in India, where the capital market regulator last year barred all the Indian units of PwC, from auditing any listed companies for two years after a probe into a nearly decade-old accounting fraud case, it says. And India’s central bank barred S.R. Batliboi & Co, an EY firm, from conducting statutory audit assignments in commercial banks until April 2020, citing lapses identified in its work. Last month government investigators filed fraud charges against IFIN, its former management as well as the auditors, points out Reuters.
- Former tourism minister Derek Hanekom is the eighth ANC member to resign as an MP. Hanekom, an ally of president Cyril Ramaphosa, was not appointed to the new cabinet announced almost two weeks ago. Hanekom was an open critic of corrupt former president Jacob Zuma, calling for him to resign.
- In a reminder that the wheels of justice turn too slowly in South Africa, civil proceedings to recoup about R155m from the architect of former president Jacob Zuma’s KwaZulu-Natal homestead may get under way only in 2020. On Tuesday, the Special Investigating Unit said the trial was scheduled to start in the Pietermaritzburg high court on Monday‚ but Minenhle Makhanya was given more time to prepare, says Business Day.
- On the Johannesburg Stock Exchange, Kumba Iron Ore and Impala Platinum led stocks upwards, each gaining around 3%. Losing value were listed property company Capital Counties and Harmony, both shedding around 3%
- The rand was trading at around R14.68 to the greenback, at about R18.68 to the British pound and R16.63 to the Euro on Tuesday evening.
Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.