IBRC Business Newsroom Pty-Ltd (2024)

14/02/2022

Social development minister Lindiwe Zulu has reassured people dependent on the SRD grant that funding is available, after the president announced that it would be extended for a further year.

BY: [object Object] - Mon, 14 Feb 2022 05:14:00 GMT

Social development minister Lindiwe Zulu is adamant SA has enough money to fulfil President Cyril Ramaphosa’s pledge to extend the R350 social relief of distress (SRD) grant until the end of March 2023.

“When the president announces ‘I have so many millions for such and such a thing’, it’s because it has been budgeted for already ... So it is not that the Treasury still needs to find the money,” Zulu told Sunday Times Daily.

During his state of the nation address last week, Ramaphosa allayed the fears of millions of South Africans who are deeply dependent on the grant, when he said it would be extended for a further year.

The grant was introduced soon after the devastating Covid-19 pandemic hit SA shores.

The decision to extend it comes after ongoing discussions between the government and its social partners in business and labour, who proposed an extension of some of the social and economic support.

However, Ramaphosa said the relief should not come at the expense of basic services, given the already under-pressure fiscus.

There is also mounting pressure for the government to expand the SRD grant into a basic income grant. Zulu said that before Ramaphosa made his announcement, ministers met to discuss pledges and exactly how much it’s going to cost the taxpayer.

“The president was never going to announce the extension if there was no money. The extension has been budgeted for. In this case the government was never going to announce that we are going to pay money if it didn’t have it, because once the people don’t get that money, we get into trouble,” she said.

17/12/2021

Washington — US regulators fined JP Morgan Securities $200m for “widespread” failures to preserve staff communications on personal mobile devices, messaging apps and e-mails, and are probing similar lapses at other financial institutions, they said on Friday.

JPMorgan Chase’s broker-dealer subsidiary admitted to the charges and to violating securities laws. It also agreed to implement robust improvements to compliance policies, in addition to a fine, the US Securities and Exchange Commission (SEC) said in its $125m order.

The US Commodity Futures Trading Commission (CFTC) said on Friday it had fined the firm $75m for the same issues.

“The firm’s actions meaningfully impacted the SEC’s ability to investigate potential violations of the federal securities laws,” the SEC said.

JPMorgan declined to comment.

The penalty is one of the first major enforcement actions brought under SEC chair Gary Gensler, who was appointed by Democratic President Joe Biden and who has pledged to crack down on misconduct by Wall Street companies.

The SEC said it discovered that JP Morgan Securities had been violating rules that require firms to preserve written business communications when the broker was unable to produce records during the course of other investigations.

As a result of the JPMorgan probe, the SEC has opened investigations into other firms’ records-keeping practices, it said, confirming an October Reuters report.

“This is an issue that we’re seeing at other firms,” said an SEC official, adding that “individuals and entities that self-report” will fare better in penalty negotiations.

16/12/2021

What was your first job?

After my studies, I spent a lot of time following my dad around a chemical plant that he ran. But my first formal job was at an audit firm.

How much was your first pay cheque, and how did you spend it?

It was around R1,950. I had a student loan and my family needed financial help, so the money was quickly allocated to cover these expenses.

What is the one thing you wish somebody had told you when you were starting out?

Remain humble and cherish opportunities to learn from people. I have worked with many incredible leaders who have helped accelerate my growth and development.

If you could fix only one thing in SA, what would it be?

Education is the key to success. We need to implement the best education system for the children of our continent.

What’s the most interesting thing about you that people don’t know?

I’m an entrepreneur at heart … My university dorm had little space for much else than a single bed and a tiny desk. Even so, I had boxes piled to the ceiling — filled with T-shirts and tuck-shop stock that I flogged. Selling these helped me pay for my studies and resulted in me buying my first car by my fourth year of study.

What’s the worst investment mistake you’ve made?

Emotional investments are the ones to avoid. While passion is important in business, one needs to be considered and disciplined.

What’s the best investment you’ve ever made? And how much of it was due to luck?

On a lighter note, I bought a few koi fish and, a number of years later, when they were eventually valued, I was astounded by how valuable they had become!

What is the hardest life lesson you’ve learnt so far?

The success of any business or organisation is determined by its people. Making difficult people decisions to ensure you have the right team, and doing so quickly, is key to success.

16/12/2021

Ahead of what is expected to be another difficult marketing year, the global Dentsu advertising network has identified three megatrends that will go some way towards assisting brands define and chart a recovery.

Locally, media buying agency The Media Shop says a cyclical recovery in global economic growth will be felt in SA gradually next year. It says the momentum will likely complement an increase in adspend as digital channels increase their consumption and reach.

In a report titled "Reimagine Next", Dentsu says consumers have become accustomed to the flexibility offered by omnichannel retail — the ability to research and buy both online and in-store and by combining the two. The report says many other areas of life are now becoming omnichannel, developing hybrid models that mix digital and in-person participation. Brands need to experiment to accommodate this megatrend, Dentsu says. Shopping and payment messages should include strong, brand-based messages.

The second megatrend is increased brand citizenship. Dentsu says: "Brands are increasingly showing their human side. The rise of social media has meant that many consumer-facing brands now have a more human tone of voice. They have become used to sharing news and to replying to queries. Many are … showing a more empathetic and caring side."

The key takeaway for brands is a "new need to be conscious of their consumers’ views and [to] help them live more sustainable lives".

The third megatrend concerns the redefinition of identity. Dentsu says: "It seems certain that people’s online identities will become even more important to them, while being ever harder for brands to access. Brands need to be trusted for people to agree to sign into their sites [or stores] or submit e-mail addresses to give them permissions to target. Brands can build trust by acting in more ethical, fair and sustainable ways, essentially by demonstrating transparency and empathy."

16/12/2021

Times are tough for SA households after more than a year and a half of coronavirus-induced economic and social upheaval – and the disruption already caused this week after the Omicron variant of Covid-19 was reported in SA has shown that even more economic distress lies ahead.

According to the SA Reserve Bank’s Quarterly Bulletin, gross saving in households as a percentage of nominal GDP declined to 2.2% in the second quarter of 2021, from 2.4% in the first quarter.

The pandemic has put additional pressure on consumers in SA’s tough economic landscape, and the resultant negative returns on investments have added to these challenges. More and more individuals are looking for better investment options.

“The past year and a half has been particularly difficult for South Africans,” says Zanele Mbere, head of unsecured lending portfolio management (personal banking) at Standard Bank.

“In many cases, consumers have to balance variable income, increased expenses, lower savings returns and lower levels of confidence. Consumers who could save or want to save are looking for investment opportunities that will allow them to make higher returns at lower risk. They want their money to work harder for them.”

Standard Bank’s Flexi Advantage Investment Account and Fixed Deposit Investment Account offer low-risk opportunities with higher potential returns for risk-averse investors.

16/12/2021

Trade, industry and competition minister Ebrahim Patel will probably always be remembered for the wrong reasons, not least for doggedly pushing for localisation despite overwhelming evidence that such a policy is dangerous and undesirable for a developing economy like ours.

Localisation, which in simple terms is a form of protectionism, dominated debates on our pages throughout the year. It calls for the use of locally made inputs for manufacturing processes, with the government setting a target of 20% of nonpetroleum imports for local replacement within five years as part of measures to revive struggling local industries such as sugar, poultry and steel. The government has also banned the use of imported cement on all government projects, boosting local firms such as PPC.

In a country where the record unemployment rate risks a repeat of the unrest in July, when protests over the jailing of former president Jacob Zuma morphed into wider outpouring of anger over poverty, it is easy to be seduced by the idea behind reviving local manufacturing industries amid worsening global protectionist trends.

“Even though the rollout of effective vaccines in late 2020 and early 2021 may loosen the grip of Covid-19 on the global economy, ongoing protectionist and geopolitical trends suggest that the world is unlikely to see a return to business as usual,” according the OECD.

But one doesn’t need to be an economist to understand that such measures will have dire unintended consequences. To begin with, there’s a chance that they will reduce competition and thus drive up input costs, hold back innovation and ultimately weigh down economic growth. Growth is a must to alleviate the unemployment and poverty crisis.

14/12/2021

The South African tourism industry is a key economic driver, contributing 9% to GDP and 4.5% of jobs. The sector was hardest hit by Covid-19, with tourist volumes decreasing by 72.6% in 2020, resulting in huge job losses. To recover, transformation needs to be on top of the agenda, agree industry leaders.

Industry leaders joined Andile Khumalo, co-founder of Sanlam Gauge, in an online workshop to discuss challenges and solutions that can result in meaningful transformation.

The workshop was the fourth instalment of sector conversations after the release of Sanlam Gauge (https://sanlamgauge.co.za/report/), a report that measures the level of B-BBEE activity across sectors.

Empowerdex ratings agency MD Lerato Ratsoma said the sector sits at a level-1 recognition with 110 points, and commended companies that put an effort to achieve their B-BBEE scores.

The tourism sector achieved 23.9 out of 27.0 points for black equity ownership, 11.7 out of 19.0 for management control, 16.6 out of 20.0 for skills development, 34.6 out of 40.0 for enterprise and supplier development and exceeded expectations with 6.8 out of 5.0 for socioeconomic development.

The workshop was punctuated with robust debates, with some participants stating that there was no significant transformation at grassroots level, where it is most needed.

Lindiwe Sangweni-Siddo, chairperson of the Tourism Transformation Council of SA, said the Sanlam Gauge report findings mirrored their sector’s 2018 state of transformation report, particularly on poor representation of women in management control.

“The reality on the ground is that the industry is untransformed. Only 11% of enterprises had black women at board, executive and senior management levels.

14/12/2021

Annual retail sales slacked off in October, hinting at a softening in the recovery that followed July’s civil unrest, and comes as SA faces off against the Omicron-spurred fourth wave of the pandemic.

Retail sales slowed to 1.8% year on year in October from the previous 2.1%, according to data released by Stats SA on Wednesday, slightly off the median forecast for 1.9% of economists surveyed by Bloomberg.

The official figures, however, have yet to reflect the outcomes of festive season shopping and the gearing up to Black Friday during the month of November, which typically offers the sector a boost.

The retail sales figures follow the worse-than-expected third-quarter GDP numbers released on Tuesday that reflected the strain consumers are under as confidence remains shaky and joblessness has reached record highs.

Household consumption expenditure, which accounts for about two-thirds of GDP, shrank a seasonally adjusted 2.4% in the third quarter, its worst performance since the second quarter of 2020 when SA was in hard lockdown.

Though it could be argued that October’s slowdown partly reflected consumers’ “holding-back” in anticipation of Black Friday deals, it “does not explain the softening trend overall”, said Stanlib chief economist Kevin Lings in a note.

“Retail activity has clearly lost momentum over the past six months,” he said.

14/12/2021

The Treasury says the International Monetary Fund’s (IMF's) report on key risks to SA’s economic framework is largely aligned with the government’s programme to stimulate growth.

In the 2021 medium-term budget policy statement, the Treasury said the government underscored its commitment to fiscal sustainability, enabling long-term growth through narrowing the budget deficit and stabilising debt.

There has been some progress in implementing structural reforms to support economic growth, it noted. Key actions and announcements include the restructuring of Eskom; raising the licensing threshold for embedded electricity generation; preparatory work on the establishment of a National Water Resources Infrastructure Agency; and accelerating investment of 62 priority infrastructure projects.

“The government continues to work towards moving SA forward and realising strong, sustainable, balanced, inclusive and green growth that will improve the lives of all South Africans,” said the Treasury.

14/12/2021

Chinese artificial intelligence firm SenseTime is delaying its Hong Kong initial public offering, according to people familiar with the matter, as tensions with the US government ratcheted higher at the last minute.

The AI start-up’s IPO would not be priced on Friday as expected because the banks need to make adjustments and address regulatory concerns, one of the people said, asking not to be identified as the information is private.

Bankers had been gauging investor interest in the IPO when news broke about the plan to add the firm to the treasury department’s list of so-called Chinese military-industrial complex companies, timed to fall on Human Rights Day as well as SenseTime’s expected pricing.

SenseTime said in a statement on Saturday that the US government’s accusations are “unfounded and reflect a fundamental misunderstanding of our company”. The firm has “been caught in the middle of geopolitical disputes” and it will “take appropriate action to protect the interests of our company and our stakeholders”.

Deliberations are ongoing and the share sale could resume at some point in the future, the people said.

14/12/2021

Virgin Atlantic Airways owners Richard Branson and Delta Air Lines agreed to provide a £400m capital injection into the UK carrier to see it through the latest slump in global travel.

Branson’s Virgin Group will contribute £204m of the funding and Atlanta-based Delta the rest, allowing them to maintain their current holdings of 51% and 49%, respectively, Virgin Atlantic said in a statement on Monday.

The financing will help bolster Virgin Atlantic’s balance sheet as the Omicron variant of Covid-19 threatens to strangle off a revival in long-haul travel. Bloomberg reported last month that the company was exploring fundraising options to help tap what was expected to be a rapid rebound in transatlantic demand after the US eased border curbs. Since then, the new strain has caused people to delay booking flights and governments impose fresh restrictions.

“Virgin Group and Delta Air Lines, and our creditors, have been a source of unwavering support,” CEO Shai Weiss said in the release. He said that Virgin Atlantic sees a return to sustainable profitability in 2023, driven by improved demand and £300m of savings already achieved.

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