Cape Times 2022-04-19

COAL producer Exxaro Resources last week said logistic company Transnet should not be able to declare a force majeure after the parastatal said it struggled with vandalism and legal woes. This follows a statement released on Thursday morning by Thungela Resources, a major coal exporter, stating that state-owned logistics company Transnet informed Coal Export Parties (CEPs) that it was under force majeure and it might not be able to fulfil its long-term agreements due to unforeseeable circumstances. The market thrashed Thungela on its statement with other commodity equities unscathed. Thungela’s shares closed lower on Thursday 4.7 percent lower at R247.64. This as Exxaro’s share gained 0.2 percent to R234.19, while Glencore’s shares gained 0.89 percent to R101.19; Merafe Resources shares gained 1.81 percent to R1.69; Kumba Iron Ore shares rose…

THE SOUTH African fiscus could be dealt a huge blow this year as coal exports, one of the country’s largest foreign currency earners, are expected to shrink significantly due to a force majeure by Transnet. Transnet Freight Rail last week notified coal export parties that it was under force majeure as circumstances beyond its control, such as the ongoing legal proceedings and vandalism on the coal line, will continue to detract from its ability to perform for at least the next six months. The impact of these factors resulted in an annual rail performance of 58.3 million tons of coal delivered to Richards Bay Coal Terminal (RBCT) in 2021, the lowest since 1996, compared to its annual capacity of 77 million. The managing director of mining investment firm…

TRADE conditions remained restrained and deteriorated further into the contractionary territory in February and March, due to lower export volumes as a result of a number of issues. The South African Chamber of Commerce and Industry (Sacci) said last week that trade conditions were hampered by logistical issues at ports, supply chain disruptions, higher inflation, and rising interest rates. Sacci said sluggish economic growth had a significant impact on the trade environment, while lower export volumes led to cautionary and selective spending by businesses and households. As a result, trade conditions became restrained after bordering on positive territory in January. Sacci’s Trade Activity Index fell from 48.1 index points in the fourth quarter of 2021 to 43.1 index points in the first quarter of 2022. Sacci economist Richard…

THE FLOODING in KwaZulu-Natal has damaged supply and retail chains in the already hard-hit fuel retail industry, fuel retail industry management consultancy PetroConnect said at the weekend. The State of Disaster in the province has seen many local businesses and petrol stations destroyed, bringing their operations to a grinding halt. Exacerbating the situation, the public has been panic buying fuel, stirred by false social media messages, leading to triple the daily average sales at some service stations thereby creating an even greater demand on the already restricted supply chain, the company said. PetroConnect’s directors and co- founders Sbonelo Mbatha and Mark Harper, in an interview with Business Report, said with the latest disaster it would take time to build up fuel retailers’ sales again in the already ailing economy. PetroConnect…

NON-PROFIT organisation Just Share last week said that financial services provider Absa had fallen behind its peers in adopting policies relating to climate change and fossil fuel financing. However, Absa said this was not the case. In a statement, Just Share said, after a promising start in 2020, when the Absa Group voluntarily included a “non-binding advisory vote on climate change risk and opportunity disclosure” in its March 31, 2020, Notice of AGM, the bank had not followed through. “In April 2020, Absa published a ’Coal Financing Standard’, and in April 2021, it released its first stand-alone report on climate risk, partially aligned with the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures. “However, policies relating to Absa’s oil and gas financing promised for the first…

THERE are definite indications that global economic growth is slowing. The first indications availed themselves as the yields on some longer-dated bonds dropped below the yields of shorter-dated bonds – yes, inverted or flat yield curves. But where lie the opportunities? The end of the bear market in developed market bonds is in sight. Bonds as measured by the FTSE G7 Government Bond Index which is tracked by the iShares Global Gov. Bond UCITS ETF USD (Distr) lost 17 percent since December 2020 as bond yields climbed. Firstly as a result of the global economy recovering from the coronavirus and its mutants and secondly, the onset of the Russian/Ukrainian conflict. The massive sanctions against Russia saw the US Federal Reserve and other central banks hiking their official lending rates…