Coronavirus ripples, Rand punished; Eskom plans; Gangs raid gold mines; Tshwane mayor quits

By Linda van Tilburg

  • The rapid spread of the coronavirus pandemic will loom large in the minds of economists in the coming days as the number of global cases soars and the impact on commerce spreads. While the World Health Organisation did not recommend any restrictions on travel and trade when it declared the outbreak a global health emergency, more than two-thirds of China’s economy will remain closed as the virus and disruption could spread further. The Federal Reserve and Bank of England have both indicated they are closely monitoring the pandemic, while economists are re-examining their calls for 2020 expansion. Bloomberg Economics forecasts that the hit to growth will be most severe in China, and it would ripple across the world.
  • In South Africa the business confidence index and Absa’s Manufacturing purchasing index (PMI) will be released this week with economists polled by Bloomberg predicting that that BCI will inch up 0.1% in January from 93.1 points in December. Bloomberg forecasts that the PMI is likely to rise after it dropped to its lowest level in three months in December. New vehicle data sales for January will also be released this week. The Rand tumbled to a new 12-week low on Friday as the corona virus and the announcement by CEO Andre De Ruyter that power cuts will continue weighed on the currency. The Rand fell to R15 for a US dollar and R19.82 to British sterling on Friday. Reuters reports that bonds bucked the trend, with yields falling on the benchmark bonds. The yield on the 2030 fell 2.5 basis points to 8.98%.
  • Cosatu will present its proposals to rescue Eskom to senior members of government and the business community today. The union wants the government-owned pension fund, the Public Investment Corporation, the Industrial Development Corporation and the Development Bank to take over R254bn of Eskom debt. Under the agreement the PIC would provide the bulk of the debt relief and the government could also make a contribution depending on its finances. The PIC already holds R104bn of Eskom debt. Meanwhile stage 2 loadshedding will continue this morning with Eskom’s new chief executive Andre de Ruyter indicating on Friday that customers have to expect some increase in load shedding to implement a maintenance plan, without which he said there was a real risk that the deterioration in Eskom’s systems will continue. De Ruyter also indicated that he was in the process of appointing boards for the power utility’s planned division into units for generation, transmission and distribution.
  • Gold Mine gangs toting Ak-47s are becoming a problem for mining companies with Bloomberg reporting that they are outgunning the South African Police. In December, 15 attackers took hostages and plundered the smelting plant at Gold Fields. While failing to break into the main vault they managed to escape three hours later with gold concentrate worth as much as $500 000. Sibanye Gold repelled an attack at its Cooke mine two weeks ago. There were 19 attacks on gold facilities last year, almost double the number of 2018 according to South Africa’s Minerals Council. More than a 100 kilograms was stolen in 2019 as bullion rose to a five year high, but the council said not all companies were disclosing their losses. The Vice-President of Gold One International’s smelting plant, Jon Hericourt said they had beefed up security and switched its focus from thwarting internal theft to combating all-out assaults, but he doubted that would be enough. It was not a mining company’s job to take on gangs like this; it was the government’s job, he said.
  • The mayor of Tshwane municipality Stevens Mokgalapa said he will resign this month to end political wrangling over his continued presence in office. Mokgalapa has faced pressure to quit since a leaked audio tape indicated that he allegedly disparaged officials in a conversation with a mayoral council member and engaged in a sexual act with her in the municipality’s offices. The Democratic Alliance placed Mokgalapa on leave in December as it investigated his conduct, while the EFF called for his removal. The ANC meanwhile threatened to place the city under the control of the administration of the central Gauteng province, but backed down after the DA said it would challenge the move in court. Mokgapala said that he had not broken any laws and was confident that he would emerge positively from any assessment of his conduct. But in the end, he concluded that it was best for the city if I stood down as mayor. The scandal is another blow for the DA, which lost support in national elections last year, and has since seen its mayor of Johannesburg, Herman Mashaba, and its leader, Mmusi Maimane, quit the party.
(Visited 199 times, 2 visits today)