By Linda van Tilburg
- South Africa has averted a second recession after economic growth rebounded in the second quarter. Positive growth of 3.1% was recorded from April to June after a contraction of 3.2% in the first quarter. Mining, finance, trade and government services were the main drivers of growth while construction, agriculture and transport registered a slump in production. Mining was the strongest performer in the second quarter, expanding by 14.4%. Iron ore, manganese and coal were the main contributors to mining growth. Finance, real estate and business services – the largest industry in the South African economy – grew by 4.1%. The construction industry remained firmly in recession, contracting for the fourth quarter in a row. Analysts said the solid the solid second-quarter GDP has raised hope of another interest rate cut later this month.
- The Rand firmed on the surprising GDP rebound to R15.14 to the dollar by midday and reached its best level in two weeks. By the close of the day the Rand strengthened by almost 1% against the three major currencies; it was trading at R15.13 for a greenback, R18.19 for a pound and R16.56 for a Euro.
- On the JSE, Aspen Pharmacare rose by more than 7% after a trading update that the company is making progress in reducing its debt burden. Net borrowings declined to less than R40bn from R53.5bn six months earlier. JSE listed clothing retailer, The Foschini Group rose by 5.9% after it announced a 14.1% increase in cash sales in its South African operations, while sales on credit rose by 0.9%. The biggest drop on the day was registered by property owners, Fortress, a drop of more than 6.74% after its dividend per share for its B-shares fell by 13.1% in the first six months of the year.
- The Sterling headed for its first gain in five days against the dollar after the defection of a Conservative Party MP to the opposition left the British Prime Minister Boris Johnson without a majority. This is likely to make it more difficult for Johnson to win backing for a no-deal Brexit. He is likely to call a snap election. The Sterling has fallen nearly 20% since the referendum to leave the European Union in June 2016.
- The Association of Mineworkers and Construction Union (AMCU) says its threatened de-registration for not complying with labour laws had been halted and it was in the process of meeting government requirements. This is after the government labour registrar announced in April that AMCU’s membership would be cancelled as it was not a genuine trade union; the union had failed to hold an elective conference since 2013. De-registration would have been a victory for the rival National Union of Mineworkers which is aligned to the ANC.
- Gauteng Premier David Makhura has warned that he could deploy the army to areas in the province plagued by xenophobic attacks and looting. Makhura said Johannesburg, Tshwane and Ekurhuleni municipalities have been affected by the looting and damage of more than 50 foreign-owned shops. As South Africa deals with an outbreak of attacks against migrants, Cape Town is preparing to host other African countries for the African edition of the World Economic Forum. The government of Nigeria said on Twitter that the continuing attacks on Nigerian nationals and businesses were unacceptable. The country will be despatching a special envoy to Pretoria to convey President Muhammadu Buhari’s concern to President Cyril Ramaphosa.
Visited 119 times, 1 visit(s) today
