Rand rallies on Moderna Covid-19 vaccine hope; 3m lost jobs in April; tourism sector calls for boycott of insurers

By Jackie Cameron

  • Consumer price growth has fallen to a 15-year low, prompting speculation that there will be another interest rate cut. Growth in South Africa’s consumer prices fell to its lowest in more than 15 years as the cost of fuel declined and spending slowed amid the coronavirus lockdown, says Reuters. At 2.1% year-on-year in May, according to national statistics agency figures published on Wednesday, inflation is also below the lower end of the central bank’s target range, 3% to 6%. Analysts were divided on whether the declining inflation rate was likely to prompt the central bank to cut interest rates further.
  • About 3m South Africans lost their jobs, of which 2m were women; 1.5m got no pay in April. The multi-university study surveys a nationally representative sample of 10,000 South Africans every month for the next six months using telephone surveys, focusing on unemployment, household income, child hunger and access to government grants, says Stellenbosch University.
  • Tourism-related companies are calling for a boycott of companies like Santam and Guardrisk over their failure to pay up for business interruption as a result of the Covid-19 shutdowns. About 6,000 people had signed a petition calling on all South Africans, including the business sector, to support their cause by signing the petition and by re-evaluating their insurance providers by late Wednesday. The group says: “Many of these businesses are facing imminent closure, which will result in a broken tourism sector and the loss of thousands of jobs, which they say can be avoided if insurers honour their contractual obligations and pay out on these claims. Restaurants, hotels, lodges, cafe’s and other tourism businesses took out Business Interruption insurance that includes cover for infectious and notifiable diseases.  However, companies like SantamHIC and Guardrisk (owned by Momentum), Hollard, Old Mutual, Thatch and Bryte are rejecting claims, saying that Government’s lockdown, and not the Covid-19 pandemic, is responsible for the deep losses experienced by these small and medium businesses.”
  • Eskom says it is in the dark about how long load-shedding will last, its spokesman Sikonathi Mantshantsha told Reuters. Eskom implemented planned power outages for the first time since March on July 10, ending a period of unusually stable power supply thanks to reduced demand during a coronavirus lockdown, says the news agency.
  • The British and Irish Lions tour to South Africa is to go ahead as planned. There remains the possibility that the Lions tour games are played in empty stadiums as happens in English Premiership football. It’s a very short tour – only 8 matches with five matches against tough opposition for the Lions to find their Test combinations followed by three Test matches.
  • Rand has a good day amid news that Moderna has produced a promising Covid-19 vaccine. It led a rally by emerging market currencies as the US dollar slumped to a one-month low and investors chased returns and ditched safe-havens, says Reuters. US company Moderna has produced an experimental Covid-19 vaccine that provoked immune responses in all 45 volunteers, sparking a risk-on mood, it says.
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