By Jackie Cameron
- South African business forecasts for 2020 have been knocked by debilitating power cuts, as new Eskom boss starts work on cleaning up the utility. In a miserable start to 2020, warnings of further loadshedding in January and beyond dampened some businesses’ forecasts for activity this year.
South African business activity fell to the lowest level in 14 months in December due to the deepest power cuts yet, says Bloomberg. This news comes as Eskom’s Chief Executive Officer Andre de Ruyter started his role at South Africa’s indebted utility on Monday. De Ruyter is the first permanent leader of Eskom since the end of July. His main task is to turn the loss-making business around. Eskom has about R450bn of debt. Eskom, says Bloomberg, generates about 95% of the country’s electricity, resumed rolling blackouts over the weekend. The utility implemented its most severe power cuts to date in December due to breakdowns at several plants and heavy rains that caused flooding and soaked coal stockpiles. While many businesses were winding down for the Christmas holidays last month, the outages still disrupted activity, adds the news wire. - Absa has a new CEO. It has head-hunted Daniel Mminele, a SA Reserve Bank heavyweight. The bank announced the appointment of Mminele, who spent more than 20 years at the South African Reserve Bank (SARB), where he rose through the ranks to be a Deputy Governor and a member of key committees such as the Monetary Policy Committee and Financial Stability Committee. His other main responsibilities at the SARB included financial markets and international economic relations and policy.
- A severe drought is threatening South Africa’s wildlife industry, with game farmers keeping fewer animals and tourist numbers to game lodges down by about one-fifth. Reuters reports that the wildlife industry generates revenue for South Africa through tourism, hunting, breeding and meat production. Trophy hunting alone generated R2bn ($140m) in 2016, according to research carried out for the environment ministry.
- US stocks were mixed as investors assessed the potential economic impact of rising tensions in the Middle East. Treasuries and the dollar declined, says Bloomberg. The S&P 500 erased its earlier slide to trade little changed as traders weighed how the conflict between the US and Iran would affect global markets. The Dow Jones Industrial Average remained lower, while tech heavyweights pushed the Nasdaq 100 higher.
- The Rand has been remarkably resilient to Iran-US tensions. It rebounded in late Monday trade. Cristian Maggio, head of emerging markets strategy at TD Securities, told Reuters there was no obvious reason for the rand or other emerging market currencies, such as the Czech crown or Mexican peso, to strengthen. “I think today is just a technical rebound,” Maggio said.
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