Repo rate unchanged; Woolworths profit slump; still no cash for SAA; Foschini

By Claire Badenhorst

  • After its three-day monetary policy committee (MPC) meeting, the central bank kept the repo rate unchanged at 3.5%. While two members of the committee preferred a 25 basis point cut, three voted in favour of holding rates at the current level. The Reserve Bank governor said that although there will be no further cuts this year, he does foresee two hikes in 2021.
  • Woolworths reported a 65% slump in earnings for the year. According to the retailer, sales dropped as a result of reduced footfall, store closures, and a ban on alcohol and hot food sales. However, online food sales almost doubled in the second half of the year. Fashion and beauty sales were hit hard during lockdown and its Australian unit David Jones saw sales drop by 6% for the year.
  • Creditors meet today to discuss the future of South African Airways (SAA) as state funds have still not been provided. Administrators took control of SAA in December after almost a decade of financial losses. The business rescue plan, which requires at least R10bn from government, will include scaling back SAA’s fleet and cutting jobs. The government said that a decision on funding would be announced soon.
  • The Competition Commission has granted approval to the Foschini Group to take over some Jet stores from Edcon. The approval is subject to Foschini retaining at least 381 Jet stores and employing over 4,500 Jet employees.
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