By Linda van Tilburg
- South Africa’s consumer inflation remained unchanged in June at 4.5% as consumer demand remained weak. Although prices inched up 0.4% from 0.3% in May; headline inflation remained at 4.5%. Reserve Bank Governor Lesetja Kganyago said in Pretoria yesterday that he will keep pursuing his mandate of low inflation and suggested the current band may even be too high. He was responding to criticism from labour unions and senior members in the ANC who want borrowing costs to come down. Kganyago said if the central bank, in consultation with the National Treasury, were to reform the target now they would likely go to either 3% or 4% with a tolerance band of maybe one percentage point on either side.
- The message of investors after the second bailout to Eskom which will cost R59bn is that the rescue plan is better than no plan at all. The cost of insuring South Africa’s government debt against default gapped lower on Tuesday and continued the trend yesterday to the lowest level since April 2018. The rand was weaker at the opening of the market trading at around R13.92 to dollar by mid-morning, but managed to recoup some losses trading at R13.87 at the close of the JSE.
- On the Johannesburg Stock Exchange, a sharp drop in mining shares lead to losses in the All Share Index, which fell by 1%. More than 4% was knocked off BHP Billiton shares, Anglo American and Kumba Iron Ore shares both fell by more than 3%. It was another good day for Sappi with an increase of 3.79% in its share value. Naspers shares rose by 0.47%.
- Ex-Public Investment Corporation head, Dan Matjila told the Mpati Commission that he believed that the R4.3bn AYO investment was above board. He denied that he put any pressure on colleagues to push through the AYO share subscription deal and said there was nothing in AYO’s pre-listing statement to make him doubt the veracity of the numbers. The commission previously heard that the AYO valuation was “stretched out” so that it appeared to be worth more than it was in reality.
- Transnet wants to turn the port of Richards Bay into a new liquefied gas hub. Transnet announced that it signed a cost-sharing agreement with the World Bank’s International Finance Corporation, and said it is aiming for the private sector to be the main investor and operator of the facility. The IFC is taking on R28m of the cost-sharing agreement. Transnet chief business development officer, Gert de Beer said Transnet wants to unlock the LNG infrastructure in the country and wanted to develop liquefied gas as a viable energy source. The feasibility study will also investigate the “repurposing of Transnet pipelines” for natural gas transmission to inland markets.
- Namibia has announced a $338m renewable energy strategy. The country’s state run utility will build four plants powered by renewable energy over the next five years as it seeks to guarantee local supplies and cut its use of fossil fuels. The plants will harness biomass, solar and wind to generate a combined 220 megawatts. Nampower currently imports about 60% of its needs, mostly from South Africa. It is hoping to benefit from a worldwide boom in the solar market and has potential sites for the development of large-scale wind-power projects.