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Cape Town - A roundup of Thursday's top economic and finance reads on Fin24.
Bomb threats, violence being investigated at Eskom – Gordhan
Minister of Public Enterprises Pravin Gordhan has told Parliament in a written reply that Eskom has dealt with 16 cases of serious offences at power utility Eskom including arson, bomb threats, malicious damage to property and intimidation.
Congress of the People leader Mosiuoa Lekota asked Gordhan “whether his department or Eskom has launched any investigations into incidents of violence and intimidation, the destruction of property and acts of outright sabotage during the current Eskom wage dispute”.
During the latest months-long wage negotiations at Eskom, the power utility and trade union Solidarity accused workers demonstrating at Eskom operations of sabotage and intimidation, an allegation that the National Union of Metalworkers of South Africa (Numsa) has denied.
Monster fuel hikes expected in October
The biggest fuel price hike in South Africa's history could take place in October, the Automobile Association said on Thursday.
It was commenting on mid-month unaudited data from the Central Energy Fund.
"A spike in international oil prices and a huge swing in the rand/US dollar exchange rate have combined to predict a knockout blow at the pumps at the end of September," warned the AA in a statement.
In related news, Energy minister Jeff Radebe told Parliament that the outlook for the fuel price in October is a major concern.
Moody’s: SA companies less vulnerable to financial crisis
Deep and liquid local debt capital markets have reduced the need for South African companies to borrow abroad, making them less vulnerable to a financial crisis than peers in Turkey and other emerging markets, according to Moody’s Investors Service.
Large external financing needs and a plunging currency are proving a toxic mix for Turkey’s corporate sector. But in South Africa, companies have enough access to local funding, and those that have turned to foreign debt used hedging strategies to cushion the effects of short-term currency fluctuations or buy time to adjust to long-term rand weakness, Moody’s said in a report dated 12 September.
In addition, most foreign borrowing by South African companies has been driven by offshore expansion and the debt is serviced with cash flows generated in the same currency, creating a natural hedge to currency weakness, the report said.
Rand makes gains
The rand firmed by 1.6% against the dollar on Thursday after Turkey's central bank hiked interest rates. The rand has been taking its cue from the movements of the Turkish lira in recent days, as SA's fellow emerging markets battle economic difficulties.
In a press statement on Thursday afternoon the Turkish central bank said its monetary policy committee decided to increase the one week repo rate from 17.75% to 24%.
The rand opened the day's trade at R14.95/$ and firmed to R14.69 to the greenback directly after the bank raised rates by 6.25%. It was trading at R14.74/$ at 13:18.
Can the real finance minister please stand up?
Things fall apart when the centre cannot hold and for a president who sailed to power on a promise to fix the economy, Cyril Ramaphosa is not doing well.
One reason may be that South Africa has too many finance ministers. I know there’s only one official politician who holds the title and that's Nhlanhla Nene, but the message gets confusing because there are too many centres claiming the mantle of authority over economic policy, writes Ferial Haffajee.
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