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:
- Public Protector Busisiwe Mkhwebane has given President Cyril Ramaphosa until the 21st of June to answer to allegations that he violated the constitution and may have been party to money laundering when his campaign accepted a R500,000 donation from Bosasa. Ramaphosa received notification on 30th of May about the preliminary outcome of Mkwebane’s investigation, which will be finalised once he has responded. Analysts fear that it could be a source of uncertainty for the markets and distract Ramaphosa from focusing on economic reforms.
- In what was already a bad day for the rand, got even worse following the release of the Public Protector’s letter and pressure on emerging-market currencies. The Rand started the day trading at R14.68 and dropped to R14.85 to the dollar yesterday afternoon which is its weakest level since January this year. The JSE closed marginally lower after a week of gains. Gold miners gained more than 5% with AngloGold Ashanti jumping by more than 6% and Sibanye-Stillwater by more than 5%. The biggest drop on the day was Tsogo Sun shares which slumped by 18.7%, after Tsogo Sun Hotels was carved out of the group and listed on the JSE.
- But there was another set of positive data for the second quarter after the dismal news that the economy shrank by 3.2% in the first quarter. Statistics South Africa announced that retail trade sales increased by 2.4% year-on-year in April with clothing manufacturers leading the way with a 6.4% increase. Pharmaceuticals and medical goods, cosmetics and toiletries rose by 5.3% and household furniture, appliances and equipment by 4.6%. This came after yesterday’s announcement that the manufacturing sector grew by 4.6% over the same period.
- The Presidential panel has submitted the long-delayed land reform report to President Ramaphosa. It was due in April but was delayed due to disagreements between panel members over the scope of their mandate. It would be put to Cabinet before it is released. It follows after Parliament approved a constitutional amendment in December last year to allow the government to seize land without compensation. The draft Land Reform Bill will be debated again in Parliament in October.
- South Africa’s FX rigging case against 20 banks has been dealt a setback. The Tribunal which oversees antitrust cases told the Competition Commission they have 40 days to redraft its accusations after finding deficiencies in referrals. The Tribunal rejected an attempt by the banks to dismiss the case. The order is the latest chapter in a saga that started in May 2015 when the commission alleged that banks including, JPMorgan, BNP Paribas, Merrill Lynch, Investec and Standard Bank colluded to rig the value of the rand against the dollar. The commission named 23 banks. Standard Bank Group Ltd said the case was so contradictory and vague that they did not know how to respond.
- And after all the heavy data, a bit of light relief. As manufacturers look for greener solutions for their plastic products, Lego says they have spent $150m over seven years to look for plant-based Lego blocks but the company says hey have hit a brick wall.
Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.