The Financial Sector Forum

Snippets

• 21 May. Wage demands making SA vulnerable. By Ed Stoddard. Reuters. Johannesburg - Big wage hikes demanded by the government-allied trade union in South Africa's coal and gold industries helped push the rand to a four-year low on Monday, highlighting the ripple effect of the prospect of more turmoil in the industry. The National Union of Mineworkers' (NUM) call for pay rises of up to 60 percent in a submission to the Chamber of Mines seen by Reuters on Sunday rattled mining investors after wildcat strikes at platinum and gold mines killed 50 people and cost billions in lost output last year. Employers and workers are squaring off for next month's salary bargaining period against a backdrop of high inflation and shrinking company margins in Africa's largest economy due to soaring costs and sinking commodity prices. This is making South Africa vulnerable, said George Glynos, managing director at financial consultancy ETM Analytics. (more…)
• 17 May. Inefficiency of labour market puts drag on SA. By Pierre Heistein. Productivity in South Africa, while a complex topic to measure and define, is generally accepted to be in bad shape. Given its rich endowments of resources and labour, South Africa’s gross domestic product (GDP) and GDP per capita are simply not at the levels where they should be. (more…)
• 14 May. IFC boosts lending to Africa. By Reuters Dakar - The World Bank's investment arm will increase lending to sub-Saharan Africa by up to a quarter this year as private sector companies flock to the fast-growing region, its vice-president said. Jean-Philippe Prosper said the International Finance Corporation (IFC) would make new investments of between $4.5 and $5 billion for the fiscal year ending in June, up from $4 billion the previous year. (more…)
• May 14. Bank rules ‘restrict Africa growth. By Ann Crotty. Global banking rules such as Basel 3 were making it difficult for banks in Africa to provide services to the public and were consequently restricting the continent’s potential to develop, delegates attending the World Economic Forum on Africa were told last week. V Shankar, the group executive director and chief executive of Europe, Middle East, Africa and the Americas at Standard Chartered, said that Africa had huge potential and was “hot on people’s agenda”. “It has huge consumer potential, huge agricultural potential and huge infrastructure spend potential but all of this requires huge finance. Where will the money come from?” (more…)
• 13 May. Nedbank Weekly Economic Monitor:  Review of 6 to 10 and preview of 13 to 17 May 2013. The unemployment rate rose to 25,2 % in the first quarter of this year from 24,9 % in the previous quarter. Total mining output declined in March after two months of recovery. Manufacturing production again surprised on the downside in March. US equity markets continued to be buoyed by strong earnings reports, with the Dow rising through 15000 for the first time in history. US initial jobless claims have continued to fall, suggesting a gradual improvement in labour market conditions. The Bank of England left the size of its asset purchase programme unchanged. (more…)
• 13 May. Absa: SA Morning Sheet. This is a daily economic comment ... The sheets can be downloaded daily from Absa Economic Research An extract from today's sheet is provided as an example: NUM's wage demands at Eskom suggest the union is prepared to play hardball. We have long argued that this year’s round of wage bargaining could be especially contentious, and the NUM’s initial demand at Eskom supports our view. On Friday, the NUM asked for increases of ZAR3,200-3,500 in the monthly salaries of the lowest-paid workers, and ZAR3,000 a month for higher-paid workers. The percentage increase is substantial, though the exact amount really depends on the salary grade. (more…)
• 13 May. Statement by IMF First Deputy Managing Director David Lipton at the Conclusion of his Visit to South Africa. David Lipton, First Deputy Managing Director of the International Monetary Fund (IMF), issued the following statement today in Cape Town: “It has been a great pleasure for me to make my first visit to South Africa as First Deputy Managing Director of the IMF. I had the privilege to meet President Jacob Zuma and Finance Minister Pravin Gordhan, as well as Trevor Manuel, Minister in the Presidency in charge of the National Planning Commission; and South African Reserve Bank Governor Gill Marcus. I also had the opportunity to exchange views with representatives of labor unions, business, and civil society, and speak at an event hosted by the South Africa Institute for International Affairs and the University of Pretoria. Today, I had the pleasure of participating in a stimulating discussion on Africa, “Building with the BRICS’, at the World Economic Forum in Cape Town. (more…)
• May 11. Time for Africa to seize the moment. The global consensus is that this is an exciting time for Africa. Investors are scouring the continent looking for opportunities to extract value from what is considered the world’s last frontier of growth. There is a genuine optimism that Africa can be transformed in this generation, in much the same way as China and India — both dirt poor a few decades ago — have been. (more…)
• 10 May. World Economic Forum in Cape Town more than a talk shop. by Manoah Esipisu. The right badge means you get in through the right door, mingle with the right people, eat from the right zones and, generally, get things done right. The wrong badge, such as one that states "reporting media", means restrictions around every corner, apart from when reporters are herded to the back during major plenary discussions, and certainly no access to the very informative and useful background briefings by companies or industry leaders. (more…)
• 08 May. ‘Unbeatable’ growth path to lift Africa, says Gordhan. Africa is on a "potentially unbeatable" growth and development path for the next two decades, and will increasingly attract global investment, says Finance Minister Pravin Gordhan. Co-operation among Africa’s 54 states would be crucial in boosting the region’s overall annual growth rate to the 7% level seen in many other emerging markets, he said in an interview on Tuesday. (more…)
• 08 May. African Bank is a symptom of a recurring ailment. ‘We have seen this particular tearjerker of a movie play itself out often enough in the past. The cast might be different but the script is the same. “A particular asset class sees exponential growth (corporate credit in 1996/97, microloans/second-tier banks in 2001/02, home loans in 2006/07, unsecured lending in 2011/12), only for one or more banks to end up with egg on their face further down the line.” This was the chillingly apt description of the unsecured lending bubble from one of the leading JSE analysts. (more…)
• 07 May. Emerging markets drive investment into Africa, says Ernst & Young. Foreign direct investment (FDI) from emerging markets into Africa outpaced that from developed markets last year, but the number of new FDI projects into the continent fell 12% from the previous year, Ernst & Young said on Monday. Despite this drop, which came amid a 15.2% decline of FDI project flow globally, Africa’s share of global FDI rose in the past five years to 5.6% last year, reflecting greater investor interest, the financial consultancy said in a report. (more…)
• 27 Nov. Nedbank Weekly Economic Monitor:  Review of 19 to 23 November and preview of 26 to 30 November 2012. As expected, the Reserve Bank’s Monetary Policy Committee (MPC) left the repo rate unchanged at 5,0%. The rand remained weak, trading at around the psychologically important R9 level against the dollar. Consumer inflation rose to 5,6% y-o-y in October from 5,5% in September. Another major rating agency has stripped France of its AAA rating. US existing home sales numbers pointed towards the housing market recovery continuing. The German business sentiment rose for the first time in seven months. Manufacturing conditions improved in China for the first time in more than a year. (more…)
• 20 Nov. Nedbank Weekly Economic Monitor:  Review of 12 to 16 November and preview of 19 to 23 November 2012. The rand weakened sharply on heightened risk aversion last week, falling to its lowest level since April 2009 against the US dollar. Retail sales growth moderated in line with expectations in September, slowing to 4,3% y-o-y from 6,7% in the previous month. Minutes of the FMOC meeting indicated that some members of the committee felt that further bond purchases could be needed in 2013. The Eurozone economy contracted in the third quarter, entering a second recession since 2008. The Bank of England expects UK economy to remain weak and inflation to remain sticky in the next two years. (more…)
• 19 Nov. Absa: SA Morning Sheet. This is a daily economic comment ... The sheets can be downloaded daily from Absa Economic Research An extract from today's sheet is provided as an example: This week CPI for October is released on Wednesday, followed by the Central Bank’s interest rate decision on Thursday. We expect CPI to remain unchanged at 5.5% y/y as food prices rise and fuel inflation fall back slightly. In addition, we expect the weak local currency observed since the middle of the year to start having an effect on categories closely correlated with the exchange rate (such as personal care items that make up part of miscellaneous goods and services). We expect inflation to remain at this level for the remainder of the year before rising to 5.7% y/y in Q1 13. (more…)
• 12 Nov. Nedbank Weekly Economic Monitor:  Review of 5 to 9 November and preview of 12 to 16 November 2012. September mining production contracted by 8,3% y-o-y reflecting the effect of strikes in the sector during that month. Manufacturing output fell by a seasonally adjusted 2,3% m-o-m and 1,1% y-o-y in September. The international liquidity position fell slightly to $48 626 million in October. US president Barack Obama secured a second term by beating Republican candidate Mitt Romney convincingly. The Greek parliament narrowly passed a package of austerity measures and structural reforms, paving the way for the release of more bailout funds. (more…)
• 07 Nov. Nedbank Weekly Economic Monitor:  Review of 29 October to 2 November and preview of 5 to 9 November 2012. • The trade deficit widened to R13,8 billion in September from R12,2 billion in August. • The unemployment rate rose to 25,5% in the third quarter from 24,9%. • Vehicle sales growth rebounded in October as all sales categories rose during the month. • Global manufacturing conditions remained depressed in October, dragged down by weakness in Europe. • US nonfarm payrolls rose by a higher than expected 171 000 in October, but the unemployment rate rose marginally to 7,9% (more…)
• 31 Oct. Credit growth picks up pace. Growth in borrowing by households and private companies accelerated more strongly than expected last month, boosted largely by a further increase in unsecured lending, figures from the Reserve Bank showed. Private sector credit extension rose by 9.1% compared with the same month last year, well above an August increase of 7.9% and surpassing consensus forecasts of an 8.3% increase. The figures suggest that consumer demand may be relatively resilient despite the economy’s slowdown, reducing the chances of an interest rate cut in the coming months. (more…)
• 29 Oct. Nedbank Weekly Economic Monitor:  Review of 22 to 26 October and preview of 29 October to 2 November 2012. Headline inflation accelerated to 5,5% in September, from 5,0% in August. Producer inflation data came out better than expected, with the annual rate dropping to 4,2% from 5,1% in August. The SARB’s business cycle leading indicator increased 0,1% m-o-m in August to come in at 131,2. Broad money supply growth slowed to 7,5% y-o-y in September from 7,8% in August, while private sector credit extension growth accelerated to 9,1% y-o-y from 7,9%. The Medium Term Budget Policy Statement presented higher budget deficits than those in the February budget statement. The Federal Open Market Committee maintained the size of its asset purchase programme. US third quarter gdp expanded by 2,0% q-o-q, in line with market forecasts. Eurozone government indebtedness rose further in the second quarter. (more…)
• 29 Oct. Absa: SA Morning Sheet. This is a daily economic comment ... The sheets can be downloaded daily from Absa Economic Research An extract from today's sheet is provided as an example: This week delivers the usual deluge of month end data. PSCE for September is released this morning, with trade data for the same month out on Wednesday. September trade data should be the first data confirming the adverse effect of mining unrest on production and exports. Manufacturing and mining production in August still held up relatively well. The PMI that fell to 46.2 in September has been a precursor of weak circumstances ahead. Even though economic data of SA’s largest trading partners have started to surprise to the upside (China and US), this is expected to be countered by poor sentiment locally. Chinese leading indicator out this week will give more direction in terms of global growth. (more…)
• 24 Oct. Nedbank Economic Commentary: Consumer Inflation Aug 2012. Inflation surprises to the upside in heavy survey month. Headline inflation accelerated to 5,5% y-o-y in September from 5,0% in August, higher than consensus expectations of 5,2%. The major contribution to the annual increase was the household and utilities category, and specifically the actual rentals for housing and the owners’ equivalent rent categories. Actual rentals for housing was up 1,4% m-o-m and owner’s equivalent rent was up 1,0% over the month. The transport category contributed 1,1 percentage points to the annual increase. This mainly reflected an 8,6% m-o-m increase in petrol prices in September. On a monthly basis headline inflation was up 0,9% reflecting a heavy survey month that saw owner’s equivalent rent, actual rentals for housing as well as domestic worker wages being surveyed. (more…)
• 23 Oct. Composite business cycle indicators for South Africa. The composite leading business cycle indicator increased by 0,1 per cent in August 2012 compared with the preceding month. Five of the eleven component time series that were available for August 2012 increased, while six decreased. The largest positive contributions in August came from an acceleration in the twelve-month percentage change in the composite leading business cycle indicator of South Africa’s major trading-partner countries, as well as an increase in the prices of all classes of shares traded on the JSE. The major negative contributions to the movement in the leading indicator in August came from a decrease in the number of residential building plans passed, as well as a decline in the export commodity price index. (more…)
• 22 Oct. Absa: SA Morning Sheet. This is a daily economic comment ... The sheets can be downloaded daily from Absa Economic Research An extract from today's sheet is provided as an example: There are some important inflation data out this week with consumer price index for September on Wednesday followed by the producer price index for the same month on Thursday. We are slightly above consensus for CPI (5.2% y/y), expecting a rise to 5.3% y/y, mostly on the back of higher fuel prices. Local petrol prices rose by 93c/litre in September. With PPI, we are inline with consensus and expect a rise to 5.4% y/y due higher food and base metal prices. (more…)
• 28 Sep. Nedbank Economic Commentary: Producer Price Inflation. Producer inflation better than expected. Producer inflation slowed to 5,1% y-o-y in August, from 5,4% in July, below market expectations of 5,3%. The annual increase can mainly be attributed to the price of electricity, which increased by 13,8% y-o-y and contributed 1,9 percentage points. Other categories which also added to the 5,1% increase were ‘products of petroleum and coal’ and ‘food at manufacturing’, which both contributed 0,5 percentage points. Agriculture as well as mining and quarrying both contributed 0,3 percentage points. Over the month, producer prices rose by 0,7%, mainly due to the agriculture category, which contributed 0,2 percentage points. (more…)
• 25 Sep. Composite business cycle indicators for South Africa. The composite leading business cycle indicator increased by 0,8 per cent in July 2012 compared with the preceding month. Six of the eleven component time series that were available for July 2012 increased, while five decreased. The largest positive contributions in July came from an improvement in the number of residential building plans passed, as well as an increase in the six-month smoothed growth rate in the real M1 money supply. The major negative contributions to the movement in the leading indicator in July came from a narrowing of the interest rate spread, as well as a decline in the export commodity price index. (more…)
• 25 Sep. Absa: SA Morning Sheet. This is a daily economic comment ... The sheets can be downloaded daily from Absa Economic Research An extract from today's sheet is provided as an example: Leading indicator data for July published today will most likely show another annual decline, adding to the six consecutive months this indicator has already been in negative territory. Other data out this week includes Augusts’ PPI on Thursday, where we expect a slight uptick to 5.7% y/y from 5.4% y/y previously on the back of higher petroleum and food prices. Private sector credit extension figures for August are also out this week on Friday, which could give first indications of whether the 50bps rate cut in July has had any impact on gross borrowings in the economy. Trade data (August), also out on Friday, will give a welcome glance into trade account dynamics for Q3. (more…)
• 21 Sep. Nedbank Economic Commentary: Consumer Inflation Aug 2012. Inflation in line with expectations. Headline inflation accelerated marginally to 5,0% y-o-y in August from 4,9% in July, in line with market expectations. The major contributor to the annual increase was the housing and utilities category which added 1,4 percentage points. Over the month, average consumer prices increased by 0,2%. The month-on-month rise can be attributed to an increases in the housing and utilities and transport categories which both contributed 0,1 percentage points. We expect inflation to remain around 5% for the remainder of the year. Softer spending and a weaker global economy are likely to keep inflation contained. However, the severe heat wave in the US will place upward pressure on global food prices, a situation that we will continue to monitor for any signs of pressure on local prices. (more…)
• 12 Aug. Nedbank Economic Commentary: Manufacturing production. Manufacturing production in line with expectations. Manufacturing production came out in line with expectations in July, at 5,8 % y-o-y compared to a revised 0,9 % (previously 0,8 %) in June. The annual increase was mainly as a result of higher production in the 'petroleum, chemical products, rubber and plastic products' as well as the 'basic iron and steel, non-ferrous metal products and machinery' divisions which both contributed 1,7 percentage points. On a monthly basis, seasonally adjusted total production fell by 1,1 % and for the three months to July was up 0,1 % q-o-q. The largest contributor to the 0,1 % increase was the 'motor vehicles, parts and accessories and other transport equipment' division. (more…)
• 11 Sep. The importance and development of sound Financial Market Infrastructures to position South Africa in SADC, BRICS and Worldwide”. Address by Deputy Governor Daniel Mminele at the SWIFT Business Forum, Johannesburg, September 2012. Introduction … Why is BRICS important? … The importance of Financial Market Infrastructure I will now turn to the topic of this forum, being the importance of financial market infrastructures. All of us sitting here today understand and appreciate the importance of sound financial market infrastructures. They play a critical role in the global financial system, often likened to the “plumbing of a building”, largely going unnoticed, until such time that there is a leak or a pipe bursts. (more…)
• 10 Sep. Nedbank Weekly Economic Monitor:  Review of 3 to 7 September and preview of 10 to 17 September 2012. Equity markets were buoyed by news of the ECB's bond buying programme and expectations of more bond purchases by the Fed. The domestic vehicle market remained relatively buoyant in August. The RMB/BER business confidence index increased by 6 points to 47 in the third quarter. The international liquidity position was pushed higher by a weaker US dollar and higher gold price during August. (more…)
• 10 Sep. Absa: SA Morning Sheet. This is a daily economic comment ... The sheets can be downloaded daily from Absa Economic Research An extract from today's sheet is provided as an example: This week Q2 12 expenditure side GDP data is released by the SARB in the Quarterly Bulletin on Tuesday. In this publication, we will be looking closely at the state of the consumer to asses whether the slowdown commenced in Q1 continued in Q2. We anticipate private sector consumption expenditure growth to taper down to 3.4% in 2012 from 5% in 2011. Moreover, the current account data released with the national accounts will show the extent of the impact of weak external demand on the South African economy, where we forecast the deficit to remain wide at 4.8% of GDP (from 4.9% in Q1). (more…)
• 05 Sep. Nedbank Weekly Economic Monitor: Review of 27 to 31 August and preview of 3 to 7 September 2012. Gdp rose in line with expectations by 3,2% in the second quarter, up from an unrevised 2,7% in the first. Producer inflation slowed to 5,4% y-o-y in July, from 6,6% in June. Domestic trade performance remained weak, with a seventh consecutive monthly deficit recorded in July. Federal Reserve Governor Ben Bernanke indicated that the US central bank would extend monetary easing further should the need arise. US second quarter gdp growth was revised to 1,7% q-o-q from 1,5%. The German Ifo business sentiment index fell for the fourth month in succession. Both Japanese and Chinese manufacturing activity were in negative territory during August. (more…)
• 28 Aug. Nedbank Weekly Economic Monitor:  Review of 20 to 24 August and preview of 27 to 31 August 2012. The rand weakened further on expectations of another interest rate cut and continued concerns about the implications of the violence at Lonmin’s Marikana mine. Headline consumer inflation dropped to 4,9% y-o-y in July from 5,5% in June, lower than the consensus forecast of 5,2%. The US dollar ended the week weaker at $1,2519 against the euro from $1,2332. FOMC minutes show expectations for US growth to remain moderate in the coming quarters. UK gdp growth shrunk by 0,5% in the second quarter, better that the 0,7% decline estimated last month. (more…)
• 27 Aug. Absa: SA Morning Sheet. This is a daily economic comment ... The sheets can be downloaded daily from Absa Economic Research An extract from today's sheet is provided as an example: In addition to the usual end of month deluge of data, GDP figures for Q2 12 are also released this week. This publication, released by StatsSA on Tuesday, will reveal the performance of the production side of the economy during Q2, where we expect both the trade and mining sectors to have contributed positively to the headline figure and suspect the manufacturing sector to have remained stagnant during the quarter. Later in the week money supply, PPI and trade balance figures are released for the month of July. (more…)
• 24 Aug. Namibia’s government seeks bigger local share in SA banks. The South African-dominated Namibian banking sector has been put on warning that the country is intent on increasing local participation in financial services. Three of the four commercial banks operating in the country — First National Bank Namibia, Nedbank and Standard Bank Namibia — are South Africa owned. The financial services sector contributes 35% to Namibia’s gross domestic product. (more…)
• 23 Aug. Composite business cycle indicators for South Africa. The composite leading business cycle indicator decreased by 1,1 per cent in June 2012 compared with the preceding month. Seven of the ten component time series that were available for June 2012 decreased, while three increased. The largest negative contributions in June came from a decline in the export commodity price index, as well as a decline in the number of residential building plans passed. The major positive contributions to the movement in the leading indicator in June came from an improvement in the average hours worked in the manufacturing sector, followed by an improvement in the volume of orders in the manufacturing sector. (more…)
• 22 Aug. Nedbank Economic Commentary: Consumer Inflation July 2012. Inflation eases as electricity surprises to the downside. Headline inflation dropped to 4,9% y-o-y in July from 5,5% in June, lower than the consensus forecast of 5,2%. The downside surprises over the month were in the food category (unchanged), electricity (up 8,6%, where double digit increases were anticipated) and insurance (slightly off in a survey month). Over the month, average consumer prices increased by 0,3%. The month-on-month rise can mainly be attributed to an increase in the housing and utilities category, which contributed 0,6 percentage points, this was counteracted by a decline in the transport category, which subtracted 0,3 percentage points. We expect inflation to remain around 5% for the remainder of the year. Softer spending and a weaker global economy are likely to keep inflation contained throughout 2012. However, severe heat in the US will place upward pressure on global food prices, a situation that we will continue to monitor for any signs of pressure on local prices. (more…)
• 21 Aug. Nedbank Weekly Economic Monitor: Review of 13 to 17 August and preview of 20 to 24 August 2012 The rand lost ground on lower global risk appetite and worries about the strike and violence at Lonmin's Marikana mine. Real retail sales growth surprised to the upside in June, coming in at 8,3 % y-o-y following a 7,1 % rise in June, exceeding market expectations for a 4,7 % rise. Second quarter Japanese gdp slowed to an annualised 1,4 % from 5,5 % and below market expectations for a 2,4 % expansion. Eurozone gdp contracted by 0,2 % in the second quarter. US industrial production increased by 0,6 % in July from 0,1 % in both May and June. Manufacturing output rose by 0,5 % in July, the same as was recorded for June. (more…)
• 19 Aug. Government too soft on corrupt public servants — Treasury. DISMAYED: The failure to bring about consequences for government officials who commit financial misconduct is one of the reasons advanced by auditor-general Terence Nombembe for the poor state of financial management. While corrupt public servants must be punished, there are too many "soft landings" for them at the moment, said Freeman Nomvalo, accountant-general in the Treasury. (more…)
• 18 Aug. ANC won’t heed yesterday’s man. In the same week in which Trevor Manuel delivered the National Planning Commission’s National Development Plan to President Jacob Zuma, recruitment group Adcorp released statistics showing South Africa’s labour productivity has fallen to its lowest in 46 years. This is decidedly not a good place from which to review the hopes contained in the development plan. (more…)
• 14 Aug. Nedbank Weekly Economic Monitor: Review of 6 to 10 August and preview of 13 to 17 August 2012 The rand remained firm on better risk appetite last week. Annual growth in manufacturing production fell to 0,8% in June from 4,4% in May, mainly dragged down by the 5% y-o-y drop in production of basic iron and steel, non-ferrous metal products, metal products and machinery. Mining production increased by 4,2% y-o-y from 0,9% in May. The US dollar ended the week at $1,2288 against the euro from $1,2385 in the previous week. Chinese factory output slowed to 9,2% y-o-y in July from 9,5% in June, its weakest reading in just over three years. The Bank of Japan left rates unchanged at a range of between zero to 0,1%. (more…)
• 13 Aug. Absa: SA Morning Sheet. This is a daily economic comment ... The sheets can be downloaded daily from Absa Economic Research An extract from today's sheet is provided as an example: This week it is quiet on the local data front with only retail sales for June released on Wednesday. After 6.4% y/y in May we expect retail sales growth to have slowed to 3% y/y in June partly owing to lower consumer confidence during the quarter. This data will provide the last piece of data for Q2 12 and produce a gauge for the quarter’s GDP growth after the 2.7% q/q expansion in Q1 12. Slightly opposing the current rise in oil prices, the International Energy Agency’s latest report released on Friday showed that lower economic growth could dampen annual oil demand. Global oil demand is now expected to average 89.6 mb/d and 90.5 mb/d in 2012 and 2013 respectively, predominantly due to lower demand from China and the Middle East. Higher prices were partly explained by the EU sanctions on Iran that recently took effect. (more…)
• 08 Aug. Nedbank Economic Commentary: Manufacturing production. Manufacturing production weakened in June and declined in the second quarter of the year. Manufacturing production came out much weaker than expected in June, with the annual growth rate falling to 0,8% from 4,4% in May, against the consensus forecast for a 3,2% increase. The drop in production in the ‘basic iron and steel, nonferrous metal products, metal products and machinery’ category was mainly to blame for the weak annual growth rate. On a monthly basis, total production fell by seasonally adjusted 2,4%. During the month, production in 8 of the 10 major categories declined, but the sharpest drop was recorded in ‘electrical machinery’, ‘food and beverages’, as well as ‘glass and nonmetallic mineral products’. In the second quarter of this year, manufacturing production fell by a seasonally adjusted 0,2% q-o-q, also dragged down mainly by a decline in the production of ‘basic iron and steel, nonferrous metal products, metal products and machinery products’. (more…)
• 08 Aug. Nedbank Economic Commentary: Mining production. Mining production recovers further, although marginally. Mining production increased on an annual basis in June, the second consecutive month that production rose following 11 months of decline. Total production was up by 4,2% y-o-y, from 0,9% in May, while it rose by a seasonally adjusted 1,6% m-o-m. On a seasonally adjusted basis mining production increased 7,1% q-o-q in the second quarter. The main contributors to the increase were platinum group metals and iron ore, which contributed 4,5 and 1,8 percentage points respectively. Mineral sales were up 15,3% y-o-y in May. For the three months to May, seasonally adjusted mineral sales declined by 8,9% q-o-q. The decrease was mainly as a result of declines in the value of platinum group metals, other non-metallic minerals and coal. The decline in mineral sales also points to the decline in commodity prices seen in the market of late. (more…)
• 07 Aug. Postbank all set for licensing. The South African Postbank is expected to receive a banking licence early next year, according to Communications Minister Dina Pule. Preparations for Postbank to become a corporate entity, which will enable it to become a retail bank, have gained momentum. The bank plans to serve the unbanked and people underserved by the incumbent banking fraternity. (more…)
• 06 Aug. Nedbank Weekly Economic Monitor: Review of 30 July to 3 August and preview of 6 to 10 August 2012. The rand strengthened by 2,5% against the dollar on Friday after positive news out of the US boosted investors’ appetite for risky assets. The unemployment rate fell to 24,9% in the second quarter from 25,2% in the first quarter. The trade deficit remained large in June, despite narrowing to R5,7 billion from R8,9 billion in May. Key central banks left their policy rates unchanged last week, with the US Fed affirming that it is ready to act should the need arise. Global manufacturing conditions weakened further during July. US non-farm payrolls increased by 163 000 in July, better the market consensus of a 100 000 rise. (more…)
• 06 Aug. Absa: SA Morning Sheet. This is a daily economic comment ... The sheets can be downloaded daily from Absa Economic Research An extract from today's sheet is provided as an example: It’s a quieter week on the local data front with only July gross reserves and June manufacturing production to be released. On Tuesday we look for gross reserves to have fallen by USD100m in July to USD49.1bn from USD49.2bn in June. The key factor is that downward pressure from the stronger USD (against the EUR) is expected to more than outweigh the higher gold price during the month, in our view. We believe that markets will be keenly focused on the performance of the manufacturing sector, given its 16-18% weight in GDP and clear importance in MPC rate decisions. (more…)
• 02 Aug. SA's PMI recovers to 51. South Africa's seasonally adjusted Purchasing Managers' Index rose above the key 50 level in July, but the outlook for the manufacturing sector remains under pressure from declining exports to China and Europe, a survey showed on Wednesday. The index gained 2.8 index points to 51 in July -above the 50 mark which differentiates expansion from contraction- compared to 48.2 in June. (more…)
• 02 Aug. Move to regulate hedge funds in SA. Industry task team recommends two regulatory models for the South African hedge fund industry. Hedge funds are finally coming out from the shadows, with an industry task group recommending that two regulated products, "lite" and "heavy" versions, be created for the South African market space. The move to regulate hedge funds — previously unregulated and known for high risks and fees yet often surprisingly low returns — forms part of the Treasury’s overall drive to a "twin peaks" regulatory model for South Africa within the next two years. (more…)
• 31 Jul. Further uptick in household mortgage advances growth. Growth in value of outstanding credit balances in the South African household sector was somewhat higher at 7,7% year-on-year (y/y) in June 2012 from 6,8% y/y in May. The outstanding amount of household credit was R1 229,2 billion at the end of June, up by R9,1 billion, or 0,7%, from R1 220,1 billion in May. Outstanding private sector mortgage balances, comprising commercial and residential mortgage loans, showed growth of 2,2% y/y in June, impacted by a further slowdown in corporate mortgage balances growth of 1,1% y/y from 1,7% y/y in May. The amount of outstanding mortgage balances in the private sector was up by R3,7 billion, or 0,3%, to R1 080,2 billion in June from May. In the household sector, growth in the value of outstanding mortgage balances, largely related to residential property, improved somewhat further to 2,6% y/y in June this year from 2,4% y/y in May. (more…)