SIKI MGABADELI: Good evening and welcome to the Friday edition of the SAfm Market Update with Moneyweb. My name is Siki Mgabadeli.
On the show tonight, we are going to be taking you through some of the steps you need to take in choosing a financial planner. It’s such an important thing. There is one quote that I always hear, and I’m not sure whom it is attributable to: if you think the price of advice is high, then you must consider the cost of ignorance. So today we are going to help you with that. Too many people find themselves in trouble paying high fees, getting bad advice and so on, simply because they haven’t done their homework on their financial planner. So if you have any questions on this particular subject you can call us on 011-731-8502, or tweet me @SikiMgabadeli.
Wayne McCurrie of Momentum Wealth is going to wrap up the markets for the week. But first, Tumisang Ndlovu has your business news headlines.
TUMISANG NDLOVU: Thanks, Siki. Good evening.
Good news for motorists. The petrol price continues to drop. The Energy Department announced earlier today that the price of petrol will decrease by 93c/litre while diesel goes down by just over R1/litre. The February fuel price adjustment comes into effect next Wednesday. This is the second consecutive petrol price drop in 2015 owing to the lower international oil price and a slightly stronger rand. It follows several other decreases since last year, including a sizeable drop of over R1/litre in January.
Consumers are advised to use the unchanged interest rate as an opportunity to stay within their budget. Yesterday Reserve Bank governor Lesetja Kganyago announced the Monetary Policy Committee’s decision to leave the interest rate unchanged at 5.75%, and the lending rate at 5.25%. The decision was also informed by the lower international oil price, current inflation relief and a slightly stronger rand. Kganyago however warned that this current trend will not last forever.
Eskom’s woes have worsened as Standard & Poor’s has downgraded the power utility’s outlook. The ratings agency has cited Eskom’s project delays and high costs in its decision to downgrade it to BBB status. The announcement follows three consecutive days of load-shedding this week. This comes as the power utility continues to face electricity and power-supply challenges a it awaits a bailout from government. Efficient Group economist Dawie Roodt expresses his views.
DAWIE ROODT: This is really bad news. It simply means that the biggest rating agency in the world is not always considering reducing the rating or cutting the rating of Eskom. They reckon that Eskom is from a financial point of view not so sound any more.
TUMISANG NDLOVU: [Previously?]… former Finance Minister Pravin Gordhan announced a freeze on government salaries. President Jacob Zuma and his ministers are set to receive pay hikes. According to a recommendation by the independent commission for the remuneration of public office bearers, Zuma’s salary will go up to about R2.7m this year. Deputy President Cyril Ramaphosa, the Speaker of Parliament Baleka Mbete and Chief Justice Mogoeng Mogoeng, as well as traditional kings, will also be receiving salary increases in April.
Financial indicators this hour: the rand is trading at R11.60/dollar, R17.40/pound and R13.11/euro. Gold is trading at $1 267.90/oz, platinum at $1 222.75/oz and Brent crude oil at $49.37/barrel.
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