SIKI MGABADELI: Good evening and welcome to the SAfm Market Update with Moneyweb. My name is Siki Mgabadeli.
A raft of local economic data out today. We are going to look at some of those.
The FNB house-price index continues to reflect a stagnant economy, but it does suggest that second-quarter economic growth may be slightly better after that dip that we saw in the first quarter.
We also look at activity in the manufacturing sector. It improved last month – and then a pickup in business activity and new sales orders. We are going to get into the details of the Kagiso Purchasing Managers’ Index this evening.
Then we are going to look at whether or not you are buying cars – it looks like you aren’t. But we did see a bit of a recovery in the light commercial vehicle segment in Naamsa’s figures. We are going to delve into that.
Chris Gilmour is watching the markets for us today, but first Tumisang has your business news headlines.
TUMISANG NDLOVU: Thanks, Siki. Good evening.
It has emerged that a probe into Eskom’s power supply and financial woes will cost a reported R22m; the power utility has reached a settlement with yet another suspended executive. The agreement with the power utility’s head of group capital Dan Morokane follows a settlement with former CEO Tshediso Matona. The pair were suspended along with two other senior executives pending the probe by multinational law firm Denton at a cost Public Enterprises Minister Lynne Brown says will be paid from Eskom’s own budget.
Still on struggling parastatals, the North Gauteng High Court has found in favour of the state in private aviation group Comair’s bid to stop SAA from getting government guarantees. The matter was dismissed with no cost after the state argued that the bailouts amounting to billions of rand are not legally binding and don’t pose a competition threat in the industry. Comair, which manages British Airways’ local flights and low-cost airline Kulula, has argued the matter as unfair advantage. The Free Market Foundation’s Leon Louw, whose organisation backed Comair, says SAA is no longer a strategic national asset but a burden on taxpayers.
LEON LOUW: It violates such things as Section 33, which says administrative action must be fair and reasonable and lawful. But more importantly, it’s a diversion of money from the poor to the rich. This is an extreme example of the poor subsidising the rich.
TUMISANG NDLOVU: And political figures made business news headlines today. This as the South African Revenue Service has withdrawn the EFF leader Julius Malema’s sequestration. Malema, who had reached a failed settlement deal with SARS, had been under provisional sequestration for his reported R16m tax debt.
Meanwhile Deputy President Cyril Ramaphosa has reportedly completed the sale of most of his business interests to a company led by MTN Group Ltd chairman Phuthuma Nhleko. Nhleko’s Pembani Group is said to merge with Shanduka which Ramaphosa’s family trust has a 30% stake in, creating a group with more than $370m in assets.
Financial indicators this hour: The rand is at R12.25/dollar, R18.58/pound, and R13.37/euro. Gold is at $1 194.25/oz, platinum at $1 111.36/oz, and Brent crude oil is trading at $64.44/barrel.