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Banking, Finance and Insurance
Wednesday, 14 Oct 2009
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BANKING IN SHORT
The following stories were among those that made headlines in banking
today: The Trade Activity Index (TAI), which surged to 53 points in
September, moved into positive territory for the first time since November
2007 and is expected to remain at this level in the short; trade conditions in
South Africa surged above the neutral level last month for the first time in two
years a business survey showed yesterday, but another survey showed that
consumer vulnerability deepened during the third quarter of this year, in a
trend likely to carry on for the next few months; SA was experiencing a mild,
not a severe recession, and should be recovering by the end of the year or
early next year, Reserve Bank Governor Tito Mboweni said last night; and the
downward spiral in the residential building sector is probably close to a
bottom, First National Bank (FNB) chief economist Cees Bruggemans said.
SA trade activity moves into positive territory
The Trade Activity Index (TAI), which surged to 53 points in September,
moved into positive territory for the first time since November 2007 and is
expected to remain at this level in the short term, as the trade environment
comes to terms with more favourable trade conditions, the South African
Chamber of Commerce and Industry (Sacci) reported yesterday. The TAI
improved from 44 points in August and has seen a steady recovery from a low
of 32 points in April. The sales and new orders sub-components of trade
activity has also pushed forward in September, relative to subdued
performances over the past year and a half, Sacci stated. The sub-index on
sales volumes improved to 60 points, up from 45 points in August and
outpaced the steady medium-term upward trend up to August, the chamber
added.
ENGINEERINGNEWS.CO.ZA
NEWS REVIEWS
Latest economic figures are ambiguous
NATIONAL ECONOMY
Trade conditions in South Africa surged above the neutral level last month for
the first time in two years, backing hopes that the economy is emerging from
the recession, a business survey showed yesterday. But another survey
showed that consumer vulnerability deepened during the third quarter of this
year, in a trend likely to carry on for the next few months. Consumer
spending drives nearly two thirds of the economy, and has contracted for four
quarters in a row, shrinking 5.8% between April and June - its steepest fall in
24 years. Retail and wholesale trade comprise about 14% of overall output,
making it the economy's third-biggest sector. It has been shrinking for five
quarters in a row now. The South African Chamber of Commerce and Industry
(SACCI) said its trade activity index (TAI) which covers wholesale, retail and
foreign trade, rose last month by 9 points to 53 points.
Rand and dollar report
At 15:45 yesterday the rand was bid at R7.370 to the dollar from R7.322 at
its previous close. It was bid at R10.902 to the euro from R10.811 and at
R11.666 against sterling from R11.547. The euro was bid at $1.481 from
$1.477.
BUSINESS DAY (National), Companies & Markets
Mobile fees cut may disrupt SA economy
South Africa's biggest mobile phone operator Vodacom said yesterday that a
dramatic reduction of cellphone charges will be disruptive to the country's
economy and communications sector. The South African government is
holding public hearings as part of plans to push mobile and telecom operators
to reduce interconnection fees, in an attempt to lower telecoms costs that
have impacted the country's growth. "A dramatic reduction of charges is likely
to have a negative impact on government policy objective of universal access
and would be disruptive to the economy and communications industry,"
Vodacom said in a submission to Parliament yesterday.
ENGINEERINGNEWS.CO.ZA
Trade opens on gold, platinum and crude oil
For the first time on Monday, South Africans could trade in gold, platinum and
crude oil. Discussing this new development on the JSE, Chris Sturgess, the
General Manager of commodity derivatives at the JSE was featured on
Moneyweb. Sturgess explained that it was their relationship with the Chicago
Mercantile Exchange (CME) Group which allowed them to expand the
commodity range. The CME is a combination of three of the large US
exchanges. "We have three market makers up and running, and they are
quoting on the contracts throughout the trading session. And therefore they
are really tapping into the international liquidity," said Sturgess.
SAFM - Moneyweb, MONEYWEB.CO.ZA
Eskom's 45% hike will deal blow to economy
Eskom wants 45% electricity tariff increases for each of the next three
financial years, the second-biggest increase it has imposed in 32 years and
which is likely to hamper the country's recovery from the recession and curb
economic growth. Even with such a significant increase, the utility will still
have a R30 billion shortfall on funding for its capital expansion programme,
needed to broaden supply. Analysts said that the proposed increases would
push inflation up by 0.4 percentage points over each of the next three years,
keeping it above the 3% to 6% official target range. This would likely force
the Reserve Bank to maintain interest rates higher for longer. Government
bonds reacted badly, with yields rising by up to eight basis points on the
news.
BUSINESS DAY (National), 5FM - News @ 6
BUSINESS DAY (National)
Carry trade no longer fundamentally attractive
The carry trade (referring to the investment strategy of borrowing in
low-interest-bearing countries and investing in those with high interest
returns) was probably no longer fundamentally attractive for the rand at this
stage, CitiBank economist Jean-Francois Mercier said yesterday. Mercier said
that were global or local macro and market factors to suddenly turn less
favourable, the rand could suffer from a sudden downward correction as there
is no obvious intrinsic "value" in the carry trade - irrespective of other
fundamentals.
BUSINESS DAY (National)
Mboweni bows out
SA was experiencing a mild, not a severe recession, and should be recovering
by the end of the year or early next year, Reserve Bank Governor Tito
Mboweni said last night. Mboweni, patron of the South African Ballet Theatre,
told the guests at a dinner in his honour that there had been sufficient
"monetary accommodation and fiscal investment" to boost the economy. "Our
forecast is that in the fourth quarter of this year or in the first quarter of next
year (you) should see us coming out of recession." The Reserve Bank has cut
its key repo rate by five percentage points to 7% since December. Mboweni's
comments back the view that the rate-cutting cycle has ended. He has
completed two five-year terms as governor and will hand over to former
deputy governor and Absa chairperson Gill Marcus next month. Mboweni said
that Marcus was "well-placed" to head the Bank as she had been deputy for 5
years.
BUSINESS DAY (National)
NATIONAL BUSINESS
FNB, Draftfcb proudly South African
First National Bank's 'Customer Game' - which rewards customers for card
transactions, ATM withdrawals, as well as online banking services with double
tickets to the 2010 FIFA World Cup - presented communications partner,
Draftfcb Impact, with a major challenge: how to officially announce as many
as 1 000 winners on a quarterly basis. The solution was a mix of far-reaching
print media in the form of the national Sunday newspapers, and beautifully
illustrated double, double page inserts. Vibrant and eye-catching, these drew
on South African iconography, popular culture and local artistic influences to
demonstrate First National Bank's Proudly South African status and highlight
its commitment to the 2010 FIFA World Cup.
NEWS REVIEWS
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Banking shares 'to boom'
Residential building downward trend at bottom
Structural growth opportunities could in the next five to seven years
contribute R5.7 billion to R9.6 billion to bank's earnings, reckons a research
report by RMB Morgan Stanley banking analysts. The analysts expect a
significant repricing of the retail activities of the major commercial banks, in
particular. RMB Morgan Stanley recently conducted an in-depth investigation
into South African banks and found that the picture was not as gloomy as
some analysts thought. Banking shares have been taking a breather in recent
months after their strong run following record lows in March in the aftermath
of the global financial crisis. Since then results have reflected sharply rising
bad debts and weaker growth in advances.
The downward spiral in the residential building sector is probably close to a
bottom, First National Bank (FNB) chief economist Cees Bruggemans said
yesterday, adding that the normalisation of the de-stocking cycle of building
at the retail level had resulted in improved demand experienced by building
materials manufacturers. The FNB Building Confidence Index (BCI) improved
to 32 points in the third quarter of 2009, compared with 30 points in the
second quarter of the year. Three of the six subindices of the FNB BCI have
improved, while the remaining three have seen quarter-on-quarter declines,
FNB stated. Confidence levels among building contractors have improved by
one point, among manufacturers by 23 points and among retailers by 13
points.
FIN24.CO.ZA - FINWEEK
Ramos to build houses
ENGINEERINGNEWS.CO.ZA
Absa group CE Maria Ramos will next week team up with more than 400
employees to build 100 homes for residents of Drieziek Extension 5, south of
Johannesburg, as part of the bank's social responsibility programme. Absa
said yesterday Ramos and bank staff would construct the houses in the week
beginning 19 October and she would join Human Settlements Minister Tokyo
Sexwale to present beneficiaries with the keys to the new houses on 23
October.
Cadiz Holdings sees improvement
BUSINESS DAY (National), Companies & Markets
BUSINESS DAY (National)
Higher Eskom tariffs will make things difficult for
businesses
Consumers financial vulnerability worsens
ArcelorMittal SA had a measure of understanding of the business and financial
rationale underlying Eskom's application for a power tariff hike, a
spokesperson said yesterday. "At the moment, electricity tariffs account for
less than 10% of our cost base and Eskom's tariff increase will put pressure
on our costs. It will drive us to focus on greater energy efficiencies in our
production processes as well as producing our own power sources using
excess gas generated in our steel-making process," said Sven Lunsche,
spokesperson for ArcelorMittal SA. Hulamin CE Alan Fourie said that an
increase of 45%, which was way above inflation, was "extremely
unattractive". Neren Rau, CE of the SA Chamber of Commerce and Industry,
said that these hikes would add to the difficulties already faced by businesses
due to the recession. He said that there could also be new inflationary
pressures.
BUSINESS REPORT (National)
FSB to investigate complaint about Simmers
The Financial Services Board (FSB) has yet to decide whether it will
investigate a complaint about manipulation of Simmer & Jack (Simmers)
stock, which was laid by the company's executives last month.
The Companies & Markets cited FSB spokesperson, Russell Michaels, as
saying, "We are looking into the complaint, but have not decided to register
an investigation yet." On 21 September, Simmers said that it had asked the
JSE to investigate possible manipulation of the its share price. This was after
an "unusual" amount of its shares were traded in the same week that it
became aware of the distribution of a statement to certain shareholders
seeking to remove its management. According to Simmers, on the same day,
five directors resigned. "I don't think that anything will come of this," Peter
Redman, senior technical adviser at the JSE, said yesterday.
BUSINESS DAY (National), BUSINESS DAY (National), Companies & Markets,
BUSINESS REPORT (National), CITIZEN, Citi Business
OM launches senior bond
Old Mutual announced yesterday that it has launched and priced a £500
million fixed rate senior bond. The bond is due 19 October 2016 with a
coupon rate of 7.125% (semi-annual). The reoffer price is 99.323. Lead
managers are Barclays Capital, Deutsche Bank and Royal Bank of Scotland
and co-leads are Calyon, RBC Capital Markets and Societe Generale. The
settlement date for the issue is 19 October 2009. The issue is being made
under the company's £3.5 billion Euro Note Programme and will be listed in
London in denominations of £50 000 and £1 000. The bond is senior and
unsecured and is rated Baa1/BBB by Moody's and Fitch FSA stabilisation, OM
said.
FIN24.CO.ZA - FINWEEK , BUSINESS DAY (National)
IDC seeks 'lead arranger' for domestic bond
The Industrial Development Corporation (IDC), which last raised a bond some
20 years ago, is seeking proposals from South African-registered banks and
financial institutions regarding its planned domestic bond programme. The
development finance institution (DFI) expects to approve R70 billion in equity
and loan finance over the next five years and has indicated previously that it
will need to raise its gearing from around R6 billion currently, to nearly R25
billion by 2013. In doing so, its debt-to-equity position will move from around
8% to 35%. In a recently published tender advertisement, the IDC formally
requests proposals for a "lead arranger" to establish a domestic medium-term
note, or DMTN.
South Africa's financial services groups have battled for a profit over the past
12 months, but Cadiz Holdings appears to be recovering, with earnings up
about 100% in the six months to last month. The specialist financial services
group said in a trading statement that interim basic and headline earnings
were anticipated to be 90%-110% higher than the 8.5c per share reported at
the same time last year.
The financial vulnerability of consumers worsened during the third quarter of
the year, according to the latest results of the consumer financial vulnerability
index, released by the Bureau of Market Research and FinMark Trust
yesterday. The overall index increased from 5.17 in the second quarter to
5.49 in the third quarter, the index shows.
BUSINESS DAY (National)
Barnard Jabobs Mellet expect increased earnings
Barnard Jacobs Mellet Holdings yesterday said it was expecting headline
earnings per share for the six months ended September of 11c-14c compared
to 10.9c in the same period a year earlier. Earnings per share are expected to
be 14c-16c against 10.4c a year earlier.
BUSINESS DAY (National), Companies & Markets
Foreign investors flock to JSE
Nearly R70 billion worth of offshore funds have flowed into JSE-listed
companies this year, on a net basis, according to George Glynos, the
managing director of market analysis firm ETM. Non-resident inflows already
topped the R67.5 billion invested in the local stock exchange in the whole of
2007, Glynos said. And they follow a R57 billion outflow last year. Foreign
inflows have helped push the JSE's all share index up 18% since the start of
the year.
BUSINESS REPORT (Star)
GENERAL NEWS
Former youth commissioners could face charges
Western Cape Premier Helen Zille says she expects former provincial youth
commission members to be criminally charged soon. A report by the
Auditor-General shows there was irregular expenditure to the tune of over R4
million at the now-defunct commission. The Auditor-General gave the
commission a qualified audit. Zille says her office will do all it can to address
the issues raised in the report. "The acting director-general has given
instructions that the money be recovered and that criminal charges be laid
against members of the youth commission."
EWN.CO.ZA
Government department urged to achieve clean audit
reports
Auditor General Terence Nombembe says government departments need to
follow the example of state institutions and achieve clean audit reports.
Nombembe says about 80% of the National State Institutions received clean
audits report. Nombembe said: "We've got close to, I think, about 77 of those
state institutions at a national level that have got clean reports. So it's quite a
high proportion and in fact if you translate it into percentages, close to 80%
of clean reports are compositions of state institutions. So it means
government departments constitute a lower proportion of that, and therefore
we need them to also follow suit."
SABCNEWS.COM
WC does not get a clean financial bill of health
While the Western Cape has fared better than the national government, the
province has fallen short of getting a clean financial bill of health from the
auditor-general. Auditor-General Terence Nombembe said that most of the
issues that led to the Western Cape not getting a clean report were because
of material adjustments that should have been picked up before the audit was
done.
CAPE TIMES
ENGINEERINGNEWS.CO.ZA
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Millions of loans from Ithala irrecoverable
Residential building sector on downward spiral
It has emerged that nearly R80 million in loans and advances from the Ithala
Development Bank seem irrecoverable. In addition, several projects funded
by Ithala's subsidiary, the KZN Growth Fund, have been great failures, having
guzzled well over R88 million. This was revealed to the provincial standing
committee on public accounts made in Pietermaritzburg yesterday by Ithala
CEO Sipho Shabalala. Democratic Alliance's (DA's) John Steenhuisen
expressed concerns about the revelations concerning the fund.
The downward spiral in the residential building sector was probably close to
bottoming out but the downswing in the non-residential building sector was
still firmly in place, FNB chief economist Cees Bruggemans said yesterday.
Bruggemans said residential building contractors expected business conditions
and the growth in building activity to improve in the fourth quarter while
non-residential contractors did not expect business conditions to deteriorate
extensively in the quarter.
MERCURY (Durban)
BUSINESS REPORT (Star)
Municipal accounts committee for City
Property
The Department of Local Government said that the eThekwini Municipality
could have its municipal accounts committee in service before the end of
November. This emerged after members of the eThekwini council's executive
committee called for a progress report on the establishment of the committee
yesterday. The proposal to form the committee was made by former
Democratic Alliance (DA) caucus leader John Steenhuisen in December 2007,
in a bid to improve oversight and accountability at local government level.
Business Day featured a supplement of Property which included the following
headlines: "Bill gives taxpayers a window of opportunity"; "Hi-tech Menlyn
Maine gets going"; "Design Without Borders revamps Cape building"; and
"Smaller office space in demand".
MERCURY (Durban)
INSURANCE
Small businesses fail to insure against crime
Crime is putting pressure on small and informal businesses to insure
themselves as police statistics indicate that over 70% of robberies are
targeted at them. The businesses are particularly vulnerable as many lack the
resources to continue operating after an incident, compelling them to rely on
loans, credit cards and money from family to keep going, or face closure.
BUSINESS REPORT (National)
Aon acquires Pinion and Pennant
Aon SA, an arm of global risk management and insurance consultancy Aon
Corporation, has acquired Santam's 100% stake in Pinion Insurance Brokers
(Pinion) and Pennant Administrators (Pennant). The acquisition, effective from
1 October, will complement Aon's global Affinity business, which generates
30% of Aon SA's international revenue and supports Aon's development of its
Affinity business. "We want to make better products available for our
higher-net worth clients," said CEO Anton Roux. He said he could not disclose
the acquisition price.
BUSINESS DAY (National), Companies & Markets
PROPERTY AND HOUSING
Home-loan deposits shrink
Banks' improved appetite for loans has had a favourable effect on the housing
market, as new figures from the oobarometer indicate. Since all four of the
major banks adjusted their loan criteria and are again offering 100%
mortgage loans, the average deposit for an average house, costing R806 494,
has declined to 12.5% in September from 23.1% in August. A year ago the
average deposit required was 17.6% or R139 771. The average percentage
for turned-down mortgage-loan applications has also fallen to 48.4%, from
52% a year ago. This was however higher than the 45.1% a month ago. The
oobarometer's house-price index shows that prices were 1.8% higher in
September than this time last year.
FIN24.CO.ZA - FINWEEK
Growthpoint looks to Australia
Growthpoint, South Africa's largest listed property firm, expects rising costs
and vacancies to cut profit margins in its home market, and is seeking growth
in Australia, its Chief Executive said on Monday. Norbert Sasse said he plans
to triple the market value of unit Growthpoint Properties Australia to A$1
billion through distressed acquisitions. The unit, bought in May, was
previously named Orchard Industrial Property Fund. "The domestic market is
probably offering less value than what the Australian market is offering right
now ... because there isn't distress in South Africa," Sasse told Reuters on the
sidelines of a conference in London.
FIN24.CO.ZA - FINWEEK, BUSINESS DAY (National), Companies & Markets
Three Cities to take over Queensgate management
Queensgate Hotels & Leisure yesterday signed a partnership agreement with
hotel group Three Cities that will see the latter take over the management of
all Queensgate's hotels with immediate affect. Queensgate has long searched
for the ideal partner to run its hotels while allowing it to focus on its core
strength of developing new properties through its subsidiary, Queensgate
Business Development. This news is welcome in light of Queensgate's trading
update published last month in which it warned that headline earnings a share
for the year to end of August was likely to fall short of its forecast published in
July, largely due to a softer performance from the group's hospitality division.
BUSINESS DAY (National), Companies & Markets
Game City to undergoes revamp
Game City Shopping Centre in Greyville, Durban would get a R15 million
makeover to modernise the building and improve parking, the mall owner
Growthpoint Properties said yesterday. The 42 200² retail shopping centre
would be renamed City View because of the 360º views of the city from the
top of the building. The revamp started in August and would be complete in
December.
BUSINESS REPORT (Star); FIN24.CO.ZA - FINWEEK
OIL NEWS
Opec sees oil demand rising to 84.9m bpd
A recovering global economy, spurred on mainly by China and other
developing states, is expected to boost global oil demand by slightly less than
1% next year, the Organisation of Petroleum Exporting Countries (Opec) said
yesterday, while warning that the pace of recovery remains far from certain.
In its October Monthly Oil Market Report, the 12-state cartel that supplies
over 35% of the world's crude, said that demand was expected to increase by
700 000 barrels per day (bpd) to average 84.9-million bpd. That represents a
200 000-barrel-per-day rise from last month's report. "Given the recent
improvement in the economic performance of the OECD (Organisation for
Economic Co-operation and Development) and China, oil demand is expected
to be better than forecast earlier," Opec said. However, it said that the
economic recovery would be "slow and weak" next year.
BUSINESS DAY (National)
Oil Report
In London, Brent crude rose 51c to $71.87 a barrel (R3.32 a litre) in the
afternoon.
Sweet crude gained 62c to $73.89 in New York.
BUSINESS REPORT (National)
GLOBAL FINANCIAL CRISIS
Financial stability ratings - Britain sinks
The UK has been hit so hard by the recession it now sits below developing
countries like Nigeria and Panama in the financial stability rankings, says a
report by the World Economic Forum. Out of 55 global economies, the UK
ranks 37th for financial stability, just above the US at 38th, according to the
Forum's second annual Financial Development Report. Overall, the UK claimed
the top spot as the world's leading financial system, displacing the US, which
dropped below Australia to third place, hampered by dire economic stability
scores and a weak banking sector. Kevin Steinberg, Chief Operating Officer at
the World Economic Forum, warns that stability is the key issue, not overall
scores, "The United Kingdom and US may still show leadership in the
rankings, but their significant drops in score show increasing weakness and
imply their leadership may be in jeopardy."
ALLAFRICA.COM - ALL AFRICA MEDIA
Stock markets recovery questionable
The stock markets are likely to move sideways for many years, according to
investment manager Allan Gray and its international asset management
partner Orbis. "The recent rise in stock markets appears to imply a strong
recovery in earnings is ahead. The big question is whether these earnings will
materialise and if they do, to what extent," Mahesh Cooper, head of Orbis
Servicing in SA and a director of Allan Gray, said yesterday. This rise in global
stock markets over the past 12 months has resulted in many questions
around whether a bull market is beginning and the recession is behind us, but
developed markets are up 24% in US dollars and emerging markets up more
than 60% in US dollars.
BUSINESS DAY (National)
BUSINESS DAY (National), Companies & Markets
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UK inflation rate at lowest in five years
Russia, China sign $4 billion deal
Britain's inflation rate dropped by more than economists forecast last month,
to its lowest level in five years as the recession curbed cost pressures
throughout the economy. Consumer prices rose 1.1% from a year earlier,
compared with August's 1.6% the Office for National Statistics said yesterday
in London. On the month, prices were unchanged for the first time in
September since this series of records began in 1996. This month Bank of
England policy makers stuck to their plans to spend £175 billion of newly
printed money on assets to foster growth. The UK might not have escaped
recession in the third quarter, and the banks should consider buying more
bonds to secure the recovery, the British Chambers of Commerce (BCC) said
yesterday.
Russia and China signed agreements worth $3.5 billion yesterday, but the
former rivals-turned-strategic partners are still working on a major energy
deal, a top Russian official said. The deals were signed during a visit by Prime
Minister Vladimir Putin to bolster energy, political and military ties. Russian
Deputy Prime Minister Alexander Zhukov told reporters that Russian and
Chinese businessmen and officials signed the agreements, including $500
million loans from the China Development Bank to its Russian equivalent VEB,
and from the Agricultural Bank of Chine to the state-controlled VTB Bank.
Other deals included Chinese companies making investments in construction
industry facilities in Russia, Zhukov said. "Naturally, the Chinese are
interested in getting (ownership) stakes," he said without giving any details.
BUSINESS DAY (National)
FIN24.CO.ZA - FINWEEK
Bear Stearns duo's trial starts
Dollar and inflation help increase gold price
Former Bear Stearns fund managers Matthew Tannin and Ralph Cioffi went on
trial yesterday in a high-profile case that will decide if the men misled
investors about the health of the two hedge funds that collapsed in 2007.
They are two of the first financial executives to face charges since the global
financial crisis began, and face 20 years in prison if convicted. The trial has
implications for the industry and its outcome could spark scores of civil
lawsuits against funds said to have misled investors. The two were either
responsible for triggering a $1.4 billion hedge fund implosion or were
scapegoats for a US government eager to affix blame for it, analysts said
before the trial.
The price of gold rose to a record in New York and London yesterday amid
fears that a weakening dollar and faster inflation will boost the appeal of the
metal. The dollar has fallen 6.6% this year against a basket of six currencies
compiled by Bloomberg. December gold futures gained 0.8% to $1 066.10/oz
on the New York Mercantile Exchange. The metal has risen 20% this year. In
London the spot price of bullion traded up to 1.1% higher at $1 068.63/oz,
beating last Friday's high of $1 061.55/oz. It later went down to $1
062.85/oz.
BUSINESS DAY (National)
INTERNATIONAL ECONOMY & BUSINESS
Aus to aid Zim farmers
Australia has partnered with the World Bank to provide support to poor
Zimbabwean farmers, the Australian High Commission in Pretoria said on
Monday. In a statement, the High Commission said Australia would provide $7
million to the World Bank Global Food Crisis Response Program to expand
maize production and food security in Zimbabwe during the 2009-10 summer
cropping season. The programme would distribute quality certified maize seed
to more than 300 000 poor small-holder farmers across Zimbabwe. Australia's
Ambassador to Zimbabwe, John Courtney, said Australia's contribution to the
programme was part of a co-ordinated donor community effort that was an
important first step to support the recovery of Zimbabwe's grain production.
IAFRICA.COM - BUSINESS
'I'm not to blame' - Gono
Zimbabwe's Reserve Bank Chief Gideon Gono, who presided over the collapse
of the local currency, insisted he was not to blame for "killing" the nation's
economy. He again rejected calls for his resignation after President Robert
Mugabe's unilateral decision to appoint him to a new five-year term last year,
one of the major disputes facing the eight-month-old unity government. "The
immorality and irrationality of the whole argument is that 'Gono must go
because he printed money and he killed this economy.' That's a white lie
because no single individual can harm or kill an economy," he said. Gono's
tenure at the helm of the Reserve Bank saw inflation soar from already
staggering four-digit figures when he took office in 2003 to numbers
estimated in many multiples of billions last year.
BUSINESS DAY (National)
Recession refocuses demand
The demand for professional services has changed sue to the global recession
as companies focus on cash, cost and control, says Barry Robinson, tax
markets leader for Ernst & Young's combined practices in Western and
Eastern Europe, the Middle East, India and Africa. There is now a demand for
company restructurings, tax services and internal audit as organisations cut
costs and retrench employees. Initially there was concern that the
professional services firms would be hit hard by the global recession.
However, Robinson said there was a demand for other types of services in the
current market.
BUSINESS DAY (National), Companies & Markets
INDICATORS
Rand - Dollar $
Rand - Sterling £
Rand - Euro €
JSE Allshare
Gold
Platinum
Brent Crude Oil
7.3535
11.6524
10.8927
25670.2
1057.50
1340.0
71.8
(- 0.0145)
(- 0.0685)
(- 0.0398)
(+ 40.13)
(- 1.25)
(+ 16.00)
(+ 0.51)
The figures quoted are from the close of business yesterday, along with any
movement, either up or down, from the previous day.
NEWS24.COM - NEWS 24, BUSINESS DAY (National)
Africa pushes for autonomy in EU-funded projects
The financing of a joint Africa-EU development initiative could be headed for
an operational shift as leaders press for an independent Pan-African kitty to
bankroll projects launched under it. African leaders want the Joint Africa-EU
Strategy (JAES) funded through a distinct scheme in place of the current
system where it relies on contributions from other supporting kitties by the
European Commission. "It is our strong conviction that a dedicated Pan
African envelope is now not only necessary but also a top priority that will go
a long way in facilitating and ensuring effective implementation of the
strategy," John Shinkaiye of the African Union Commission said in a statement
ahead of Wednesday's joint 13th AU-EU ministerial troika meeting in Addis
Ababa.
ALLAFRICA.COM - ALL AFRICA MEDIA
Nigeria's AGOA challenge
The African Growth Opportunity Act (AGOA), a US Trade Act meant to
enhance US market access for sub-Saharan African countries, is a special
economic growth and development initiative. It was predicated on the
understanding of the US that African nations are at a comparative
disadvantage in global trade because of their lack of capital, poor
infrastructure, corruption, political and economic mismanagement. The Act,
which presently allows 39 sub-Saharan African countries including Nigeria
access to US market, was in operation for eight years between 2000-2008,
but amendments by former President George W. Bush in 2007 extended its
life to 2015.
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