The Burning Question

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09 March 2010 00:16

So far, not bad

Last week’s earnings were mixed, pointing to some ongoing weaknesses in SA.

PHILADELPHIA - Last week a number of South African companies released results as the first earnings season of 2010 rumbled on, and although not uniformly good, there were some encouraging numbers. Below, I pick out some of the important results and discuss how they point to broader economic trends.

Tongaat Hulett (JSE:TON)
The sugar giant reported headline earnings per share (heps) up 44% for the year ended December 2009, mostly thanks to strong sugar prices. These numbers can be understood as part of a general global trend; food prices are high, and in many cases rising, and well-run agri-businesses are set to benefit.

There are a few drivers behind the phenomenon of ...

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02 March 2010 00:35

Look into the crystal ball

What do the latest economic indicators really tell us?

PHILADELPHIA - Three recent pieces of economic news paint a mixed picture of South Africa's economy in 2010. Last week saw both the release of encouraging GDP growth and consumer price inflation (CPI) figures and the more negative news that Eskom would be raising prices by around 25% a year for the next three years.

The GDP and CPI numbers were pretty positive. Statistics South Africa (StatsSA) reported last week that GDP (a measure of total economic output) grew by a higher-than-expected annualised 3.2% quarter-on-quarter (q/q) in the fourth quarter of last year.

This is the second quarter of growth in a row, and a marked improvement on the growth of 0.9% q/q recorded in the third quarter of 2009. It seems to suggest that the economy is now decisively out of the woods r...

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23 February 2010 00:11

Gordhan to Marcus: I got your back

Unequivocal support for inflation targeting.

PHILADELPHIA - In an unusual move, the Reserve Bank last week published a copy of a letter from Finance Minister Pravin Gordhan to Reserve Bank governor Gill Marcus, in which the minister underscored the centrality of the Bank's inflation targeting mandate, with a small pinch of salt.

The letter (which, amusingly, looks like a form letter into which someone inserted the name "Gill") was sent the day before the Budget was presented (Click here for the full Budget 2010 coverage), and drives home the message that the minister also communicated in Read post