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Cape Town - A roundup of Monday's must-read financial and economic news.
Rand strengthens on back of Zuma exit rumours, new Eskom board
The rand firmed more than 1% on Monday before retreating as the market digested news of the new Eskom board and reports that the ANC’s Top 6 are discussing the exit of President Jacob Zuma.
These developments do create more positives for the local unit ahead of the Moody’s announcement in March, but it remains to be seen whether this will be enough to help the rand stay in the World Bond Index, said TreasuryOne dealer Gerard van der Westhuizen.
By 12:04 the rand was trading 1.08% firmer at R12.03 to the dollar from its previous overnight close. It touched R12.02 to the greenback earlier in Monday's session. The rand last traded under R12.00/$ on May 24 2015.
The rand closed trade at R12.11/$.
Time’s almost up for Zuma
The clock is ticking on President Jacob Zuma’s scandal-ridden administration as his deputy, Cyril Ramaphosa, flexes his political muscles and shows he’s increasingly wielding state power to stamp out corruption and revive the economy.
While the ANC top leadership has decided that Zuma, 75, must leave office - to win back voters and stoke investor confidence in the stagnant economy - without setting a deadline, newly elected party leader Ramaphosa and his supporters have moved decisively on two other fronts.
His office and the Ministry of Public Enterprises announced sweeping changes to the board and management of struggling state power utility Eskom.
As well as deciding Zuma must step down, the ANC national executive committee on Friday suspended the party’s pro-Zuma provincial executive committees in KwaZulu-Natal and the Free State, that the courts said weren’t properly elected.
WhatsApp to launch business app in SA
The world’s biggest instant messaging app with over a billion users, WhatsApp, is expected to soon roll out its business app for Android to South Africa.
WhatsApp Business is a free-to-download Android app for small businesses to allow for companies to connect with customers, and more convenient for the 1.3 billion WhatsApp users to chat with businesses.
The new app will allow for business profiles to be identified clearly, which will assist customers with useful information such as a business description, email or store addresses, and website.
Government must address inequality gap – Oxfam
Seven out of ten South Africans believe it is the government’s responsibility to reduce the gap between rich and poor, according to a new report on global inequality by Oxfam International.
The report found that 2017 was one the best years yet for the world’s dollar billionaires, with a new billionaire minted every two days.
“Billionaires saw their wealth increase by $762bn in 12 months. This huge increase could have ended global extreme poverty seven times over,” stated the report’s authors.
Oxfam said that over 80% of all wealth created in 2017 went to the world’s wealthiest 1%, while the bottom half of the world’s population saw no relative increase in wealth at all.
Clicks promos help boost sales
Health and beauty retailer Clicks said in a trading update on Monday it has continued on a strong growth trend in the 20 weeks to mid-January 2018.
Sales increased by 14.2% over the period.
According to CEO David Kneale the Clicks chain continued to show its resilience in the current tight consumer spending environment.
Clicks reported real volume growth of 4.8%. Comparable store sales grew by 7.5% with selling price inflation averaging 2.7% over the period.
"Sales continue to be driven by our strong promotional offer, with the '3 for 2' promotion on Christmas gifting again proving highly attractive. We are also encouraged by the incremental sales from our online store over the festive season,” he said.
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