Status of SA Economy

The South African economy has recently taken a major blow due to a much-reported epidemic of labour disputes in the mining industry. Approximately 50,000 mine workers have gone on strike across companies, with violent clashes leading to injuries and deaths, as well as billions of dollars in lost production. The visible financial impact has been seen in the destabilisation of the rand and the downgrading of the national credit rating.

Behind all the drama on the international market stage is a story newspapers largely neglected: the unsustainable working conditions and mismanagement of South Africa's labour relations in the mining industry. The industry has been the backbone of South Africa's economy since the late 1800s - the country is a global leader in the production of precious metals including gold and platinum, and also holds third place in global coal production..

International investor perceptions of the South African precious metals market have, however, been damaged in recent months. The South African Reserve Bank declared mid-August that debt markets have become "vulnerable to domestic socio-economic concerns which garnered renewed foreign investor concerns following labour unrest." The rand is now underperforming in comparison to other currencies in many emerging market economies, with a 6.8 percent drop against the dollar in October 2012.
Consumer confidence in the South African metals market is waning. High unemployment, bank debt problems, and slowing growth will contribute to a divestment trend in the global market. If these indicators continue to head in their present trajectory, South African banks will have difficulty financing economic development.

South Africa's mines employ about 500,000 workers. As with mining anywhere around the world, working conditions are very harsh. Environmental hazards and accidents present a real life threat to the men and women who work on site and underground, although fatalities have declined thanks to improving safety methods.

Given the profitability of precious metals compared to the severity of working conditions and physically demanding nature of underground drilling, it is of no surprise that workers would seek to improve their pay. Such widespread outrage among mine workers across so many companies is not a coincidence - it is the outcome of systematic errors and poor communication from company leaders, combined with market pressures to keep profits up and costs down.

Source: allAfrica.com
Tags : finance, economy, sa economy, south africa economy, mining south africa, strikes south africa
Free andriod app download
@ http://bit.ly/WL5lZB

Read more »

rand slipping against dollar affecting prices

South African soybeans, wheat and yellow corn rose as a weaker currency neutralized lower prices in the U.S.

The most active soybean contract, for delivery in December, rose 0.5 percent to 5,600 rand ($640) a metric ton in Johannesburg, while the commodity lost 0.6 percent to $15.40 a bushel on the Chicago Board of Trade by 12:28 p.m.

The rand declined 1.3 percent, the most since Oct. 5, to 8.7542 a dollar.
“Soybeans were down substantially in Chicago,” Brink van Wyk, a trader at BVG (Pty) Ltd, said by phone from Pretoria. “The rand neutralized this movement.”

The price of soybeans in Chicago declined after a U.S. Department of Agriculture report showed that 80 percent of the current harvest was collected by Oct. 21 compared with an average of 69 percent from 2007 to 2011.

Wheat is trading at import parity, or the price paid to deliver it in South Africa, Van Wyk said. The most actively traded contract, for delivery in December, rose for the fourth day, gained 0.4 percent to 3,611 rand a ton.

Yellow corn, used mainly as animal feed, rose 0.1 percent to 2,539 rand a ton. White corn, which is a staple in South Africa, declined for a second day, losing 0.8 percent to 2,509 rand a ton with 2,032 contracts bought and sold.

“Speculators are busy in the white corn market,” Van Wyk said. “They can get in and out of the market as there are large volumes of contracts.”

To contact the reporter on this story: Jaco Visser in Johannesburg at avisser3@bloomberg.net
To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

Source : bloomberg.com
Tags : rand, rand strength, weak rand, rand vs dollar, rand exchange, soybeans prices, wheat prices, corn prices, south africa economy

Read more »

IMF manager gives SA thumbs up

Ms. Christine Lagarde, Managing Director of the International Monetary Fund (IMF), made the following statement today in Pretoria:


"It is a great pleasure to be in South Africa for my first visit as Managing Director of the IMF. I had the privilege to meet President Jacob Zuma, and had very productive meetings with Finance Minister Pravin Gordhan, Minister in the Presidency in charge of the National Planning Commission Trevor Manuel, and Central Bank Governor Gill Marcus.




"South Africa's recent economic performance has been impressive. Good macroeconomic policies which, together with a flexible exchange rate and sound financial sector, have mitigated the output drop during the global recession. Prudent fiscal management in the mid-2000s created the space that allowed fiscal policy to be supportive in recent years, mitigating the worst effects of the global economic slowdown and domestic recession.



Stephen Jaffe/IMF

International Monetary Fund's Managing Director Christine Lagarde, right, listens to IMF Africa Director Antoinette Sayeh.
"South Africa has become increasingly integrated into the global economy. In our highly interconnected world, this integration also exposes South Africa to global business cycles. The ongoing difficulties in the euro area, one of South Africa's main export markets, present significant downside risks to the economic outlook.


"In this context, we agreed that the challenge now is to ensure that monetary policy remains supportive and competitiveness improves. At the same time, moderation in wage growth and enhanced competition would support the ongoing recovery and lay the foundation for higher growth in the medium term.
"In these difficult times for the global economy, emerging economies are a key part of the solution. South Africa has an important role to play on behalf of the interests of developing economies and the African continent in particular. As a member of the G-20, it has a leadership role to play in making the voice of Africa heard. I'm confident that it will continue to do so."


Source: AllAfrica.com
Tags: IMF, South Africa economy,Euro crisis

Our Links:
http://gr8insurance.biz
http://woza.mobi
http://bit.ly/dialdir
http://bit.ly/come2rsa

Read more »

Dry petrol pumps in SA affecting economy

As petrol stations begin to run dry and hospitals gear up for a possible medicines shortage, now hospital, refuse collection and transport services may be crippled as municipal workers decide whether to join the strike.


The petrol shortages are now becoming serious.


Most petrol stations phoned by The Star this morning reported that their tanks have run dry.


Ahmed Ismail who has a service station in Selby said he ran out two days ago.


“It looks like we have no hope of getting any petrol soon. We have been given permission by Engen to source petrol from independent suppliers but there too, we are on a waiting list,” he said.


The station was losing a “lot of money” every day, but he would not disclose how much.


The owner of a petrol station in Clayville, Midrand, however, said he was doing good business.


Peter Matshikiza said as soon as he heard about the impending strike, he ordered his supply from an independent supplier.


“I have been in this business for 20 years, so I know what to expect. My tanks are full. The oil companies don’t know how to pre-empty the strikes. I am the only station for kilometres around whose tanks are full. I am a businessman. I can’t just fold my arms and wait for the strike to end,” he said.


Other stations which have run out, or are about to run dry within the next day, are in the City and Suburban area, two in the Barry Hertzog area, at least one in each of Parkview, Newclare, Betrams, Malvern East, Glenvista, Auckland Park and Modderfontein.

Petrol Pump

One petrol station owner, who asked not to be named, said he got a delivery in the middle of the night, so he would be okay for the next few days.


“The situation is worsening,” said Fuel Retailers’ Association (FRA) CEO Reggie Sibiya this morning.


Yesterday afternoon the FRA approached the Department of Energy for help after contingency plans to keep petrol stations stocked continued to fail. Sibiya said the department was expected to approach the Department of Labour to see if they could influence a speedy negotiation to prevent further economic losses.


“We hope their political influence with the unions will help an agreement to be reached,” said Sibiya.


Drug supplies at Gauteng state hospitals are not yet affected.


This morning Simon Zwane, spokesman for the Gauteng Department of Health, said the province buys medicine in bulk from pharmaceutical companies which then it to the department’s depot.


“From there we would then use our vehicles to distribute the medicine to clinics and hospitals. So far we are okay, we have enough supplies. We have not been affected yet because with a strike you will never know and we many not get the supply we were waiting for.


“If they continue for a long time, we would have to get contingency plans in place, go there and collect the medicine ourselves,” Zwane said.


Spokeswoman for Clicks, Susann Caminada, said their medicine supplies were okay. “We have not been affected at all but we are monitoring the situation to ensure the uninterrupted delivery of medication to all our stores.”


This morning South African Municipal Workers’ Union (Samwu) leaders were due to meet to decide whether a further 220 000 workers across the country will down tools in solidarity with their metalworker and chemical industry brethren.


According to Samwu spokesman, Tahir Sema, the central executive committee meets to debate, analyse and formulate a decision on whether to join the strike.


“The decision will only be taken if all other avenues are exhausted. This is not something our union takes lightly. Strike action is always a last resort,” he said.


The National Union of Metalworkers of SA (Numsa) spokesman Castro Ngobese said the union welcomed Samwu to join the strike.


“Samwu are our allies and it is now the bargaining season. If they join it gives us the numbers to force the employers to meet our demands,” said Ngobese.


The strike has been marred by reports of intimidation and violence against non-striking workers, but one business association yesterday won a court order preventing workers at more than 55 factories from coming within 60 metres of the premises.


The Plastic Converters Association SA (PCASA), applied for the order at the end of last week at the labour court. According to the PCASA CEO, Johan Pieterse, the order comes after violent outbursts at several of their members’ factories left non-striking workers forced to flee.


“We agree with their right to strike, but they are destroying property and we have a right to be protected,” said Pieterse.


PCASA has members across the country and, if any strikers come within 60m of their factories, they face prosecution.


This morning Numsa spokesmen were unaware of the court order, and were unwilling to comment on it.


The Chemical, Energy, Paper, Printing, Wood and Allied Workers’ Union (Ceppwawu) joined the strike on Monday, with striking petroleum depot workers preventing the petrol from being delivered to stations across the country.


Ceppwawu also organises in the pharmaceutical sector.


Ceppwawu represents 70 000 workers across the country, and according to its first deputy president, Peter Rapoo, the petroleum, chemical, pharmaceutical and fast moving goods industries are most affected by the strike.


It was also reported that the largest independent union, Solidarity, will join the strike in protest of massive pay hikes for Sasol executives, further exacerbating the petrol crisis.


The Numsa strike began after negotiations throughout the month of May broke down, as workers continue to demand a 13 percent wage increase, a ban on labour brokers and a two-year wage agreement.


Ceppwawu has also provided a list of demands, sharing the wage increase and labour broker ban, but also calling for a minimum wage of R6000 per month and better maternity leave. - Shain Germaner, Anna Cox and Botho Molosankwe.


Source - iol.co.za
Good links
www.gr8insurance.biz (Insurance quotes RSA)
www.gr8i.mobi(Insurance quotes on your mobile)
bit.ly/hotelRSA(Hotel discount special world wide)
bit.ly/loveGolf (Golf session sign up RSA)

Read more »

South Africa Economy taking a toll

Insurance brokers are losing confidence in the South African economy, according to a survey released on Tuesday.


"... the results for the first quarter of 2011 shows that brokers' confidence in the outlook for the economy has dropped to 61 percent, down from 66 percent recorded during the last quarter of 2010," CIB Insurance said in a statement on its Broker Confidence Index Survey.


The survey found brokers were continuing to lose confidence in business conditions for the local insurance industry over the next 12 months.

Confidence levels dropped to 62 percent during the first quarter in 2011, from 67 percent in the previous quarter.


Jonjon Smit, sales director of CIB Insurance Solutions, said this might indicate the South African economy was not recovering as well as people thought.


Brokers' confidence in attracting new business over the next 12 months dropped significantly to 71 percent, from 76 percent in the previous quarter.


"Insurance brokers tend to obtain new customers at the same time as consumers are purchasing items and are therefore looking to insure them.


"The drop in confidence levels in prospects for the industry and new business suggests that brokers are not expecting a significant pickup in consumer spending," said Smit.


Brokers were more confident about maintaining their current customer book in 2011, with 79 percent expressing confidence in their ability to retain existing clients, an increase of one percent since the last quarter.


Brokers said their biggest problem in the next 12 months would be complying with new legislation and regulations. Their main concern was probably the Financial Services Board regulatory exams, Smit said.


"All key individuals and representatives need to complete the first level of the exam, which will cover general compliance, by December 2011. This looming deadline is causing some uncertainty amongst brokers."
Source -http://iAfrica.com
Ads

Insurance quotes on your mobile 

Get 9 insurance quotes 

Gr8 insurance quotes

Play unlimited Golf  

Hotel deals

Read more »