Cape Times 2024-05-10

ECONOMIC growth in South Africa will survive by a whisker from falling into contraction in the first quarter of 2024 after manufacturing output unexpectedly plunged to its lowest in two years on an annual basis. Data from Statistics South Africa (StatsSA) yesterday showed that manu- facturing production fell by 6.4% year-on-year in March, following a downwardly revised 4% increase in February. This manufacturing print was worse than the expected 0.3% to 0.4% increase in March, marking the first decline in industrial activity in six months and the steepest since April 2022. StatsSA said manufacturing output was dragged lower by the steep decline in the production of motor vehicles, parts and accessories and other transport equipment. The category fell sharply by 25.9% year-on-year in March, worse than the 4.8% decline in…

THE FUEL RETAILERS Association of South Africa (FRA) has said that the rate at which oil companies were exiting South Africa was alarming, following the news that Shell would leave in the wake of Chevron and Engen. Shell has undertaken a comprehensive review of the Downstream and Renewables businesses across all regions and markets in line with Shell’s focus on performance, discipline, and simplification. The oil industry company said it had decided to reshape its downstream portfolio and intended to divest shareholding in Shell Downstream South Africa (SDSA) after 120 years in the country as a result of this review. FRA CEO Reggie Sibiya yesterday said Shell’s exit spoke to perhaps key regulatory failures, and not necessarily that regulation did not work. “Regulation in the main protects consumers. As we…

JSE-listed paper company Sappi has shrugged off its first-quarter loss as its second-quarter to March performance came in slightly better than expected. This is thanks to an improvement from the pulp segment and significant cost savings, which included a 9% reduction in cash fixed costs after it closed its Stockstadt and Lanaken Mills in Europe. The paper company reported earnings before interest, tax, depreciation and amortisation (Ebitda) – excluding special items – of $183 million (R3.43 billion), a 10% gain year-on-year. Included in the second quarter’s Ebitda figure was a positive plantation fair value price adjustment of $3m. Sappi says that it saw a modest recov- ery in global paper markets after an ex- tended destocking cycle in 2023, although underlying market conditions generally remained subdued due to…

South African and global stocks had a bullish run yesterday on the back of the market’s US Federal Reserve rate cut hopes. The JSE index reverted some initial losses to close about 0.5% up at 77 539 points, its highest in nine months, mainly driven by heavyweight resource-linked stocks and tech companies, according to Trading Economics. Traders continued to re-assess the outlook for interest rate cuts, while also monitoring more corporate results across the globe. On the data front, a larger-than-expected rise in US jobless claims offered further evidence of cooling in the labour market, raising hopes of interest rate cuts by the Fed. AFP reported that the London and Frankfurt stock exchanges hit record highs yesterday as the Bank of England kept its interest rate at a 16-year high,…

Joubert Roux “GO WEST, young man, go West and grow up with the country” exhorted a notable New York newspaper editor in 1865. Well, times change, and instead, in 2024, we would do well to look to the East to see a glimpse of what the future holds. I recently spent two weeks in China, meeting a range of stakeholders in the electric vehicle (EV) industry and seeing first-hand how the country has achieved a 50% EV market penetration this year. Our trip coincided with the release of the International Energy Agency’s (IEA) Global EV Outlook Report for 2024, which highlights China’s domi- nance in the global transition to EVs, with new electric vehicle registrations in the country reaching 8.1 million in 2023, a 35% increase when compared to…

Ben Janse van Rensburg THERE has been a remarkable shift to digital payments in South Africa and the rest of Africa in recent years. To put this into perspective, McKinsey antici- pated that electronic payments would accelerate by an estimated 150% to reach $40 billion in revenues and $188bn in transaction volumes be- tween 2020 and 2025. Many African countries, like the rest of the world, are embracing electronic payments as part of their digitisation efforts, and to create an inclusive economy that serves existing and emerging-use cases. Over and above that, real-time payments offer convenience and a safer way to pay. They have the potential to reach the under-served or financially excluded, enabling them to access a wider range of financial services, and to use their accounts for…