The world is changing fast and to keep up you need local knowledge with global context.
By Linda van Tilburg
- The South African Reserve Bank unexpectedly cut its benchmark interest rate to the lowest level in four years after slashing forecasts for inflation and economic growth. The Monetary Policy Committee unanimously voted to lower the repurchase rate to 6.25% from 6.5%. Most economists predicted the central bank will remain cautious and hold rates because of risks coupled to South Africa losing its only remaining investment grade credit rating from Moody’s Investors Service. Governor Lesetja Kganyago said the decision to ease was based purely on the outlook for inflation and growth going forward and not on what the MPC expects from Moody’s. Kganyago said if a downgrade was to take place it would be a shock and it would be treated the same way that they handled any other shock and try to see through it. He said if Moody’s maintained the current rating and the phase one trade deal did not collapse in the first half of the year, the Reserve Bank would be looking for another opportunity to cut rates – assuming the rand remained stable.
- South African Airways has put some of its aircraft up for sale to accommodate the new Airbus A350-900s the airline recently added to its fleet, it said. The cash-strapped carrier has put for sale nine wide-body aircraft — five Airbus A340-300s and four Airbus A340-600s — and 15 spare engines, it said in a tender on its website. “The decision to sell the aircraft has nothing to do with the business rescue process,” Acting Chief Executive Officer Zuks Ramasia said. Ramasia said SAA had been planning to replace their four-engine aircraft with the two-engine ones for some time. The new A350s will start operating on SAA’s international route network next week. The closing date for the tender is the 30th of January.
- Telkom is in talks with 3,000 of its employees over potential job cuts as it contends with falling sales in its landline business and a weak local economy. A consultation process has been started with labour unions to restructure their business for future competitiveness, Telkom told Bloomberg in an email. It was experiencing declining performances in fixed voice, which had previously made up more than half of Telkom’s gross revenue. Telkom revealed in November that adjusted earnings per share in the six months through September fell 36%. Shares in Telkom gained as much as 8.1% today paring losses over the past month to about 45%.
- Palladium has zoomed past the $2,300 dollar per ounce level and continues to defy all expectations. Yesterday spot prices jumped by as much as 5.7% which represents a 19% gain for 2020 after skyrocketing 54% last year. The gains surprised even the most seasoned market watchers who say there’s little chance that the tight supply conditions will ease. South Africa has reported a sharp drop in platinum-group metal production in November. On the Johannesburg Stock Exchange, the miners registered gains with Royal Bafokeng Platinum stocks jumping by almost 5%, while African Rainbow Minerals shares rose by more than 4% and Northam Platinum, Implats and Sibanye jumped by more than 3%.
- And finally, here is a warning on moving precious Spanish art. A member of the Botín family that has run Santander Bank for more than a century has been imprisoned for 18 months and fined € 58 million for smuggling a Picasso painting out of Spain on a yacht. Jaime Botín also had to hand over the “Head of a Young Woman” by Pablo Picasso valued at €26 million. It is illegal to take any work of art of more than a 100 years old that is deemed culturally important out of the country without a permit. Botín’s application for a permit had been denied. He has appealed against his sentence.
Visited 352 times, 3 visit(s) today
Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.