NAITONAL NEWS - Here’s what caught our attention on Wednesday:
1. Economic events
South Africa‘s headline consumer inflation inched up by 4.1% year on year in February from 4.0% in January, data from Statistics South Africa showed on Wednesday.
Core inflation, which excludes the prices of food, non-alcoholic beverages, petrol and energy, was at 4.4% year on year in February, unchanged since November 2018.
Retail sales rose 1.2% year on year in January after declining at a revised year-on-year rate of 1.6% in December, the Statistics SA said on Wednesday.
2. SA’s FDI reaches five-year high
South Africa’s foreign direct investment increased to R70.7 billion in 2018, from R26.8 billion in 2017, data released by the South African Reserve Bank showed on Wednesday. Reuters is reporting that the value more than doubled and reached its highest in five years, giving President Cyril Ramaphosa an advantage as he tries to woo investors in the run up to elections. The previous high was recorded in 2013, when FDI reached R80.13 billion.
3. No end in sight for load shedding
The damage to both businesses and the economy as a result of ongoing power outages is one that’s hard to escape. Companies, both big and small and are at risk of closing their businesses if the crisis is not addressed swiftly. On Tuesday public enterprises minister, Pravin Gordhan, told reporters that he is unsure of when load shedding will end, but that independent investigations are being carried out at the power plants to determine the cause of disruptions and to find a solution to the problem. He said the utility hopes to revert back with a response by the weekend.
4. State capture inquiry zooms in on Denel
Evidence and testimonies on state-arms company, Denel are now being heard at the state capture inquiry. The microscope was turned to Denel on Monday, where it was heard that Denel had lost about R25 billion between 2000 and 2010 while it was implementing its turnaround plan. This was according to the firm’s former board chairperson, Martie Jansen van Rensberg. She added that things changed for the positive under the leadership of then public enterprises minister, Lynne Brown, according to EWN.
5. Rand update
The rand is not giving much positive news, as it reacts to the dark cloud looming over South Africa, (when we say dark, we mean load shedding), alongside uncertainty relating to trade talks between US and China. The rand, coupled with its emerging market peers, may also react to the Fed’s expected dovish stance in a meeting on Wednesday, says TreasuryONE’s Andre Botha. The local currency reversed gains and is making its way to the R14.50 mark. On Wednesday, the rand was stalling at R14.49 to the dollar at 9:37.
