News in South Africa 13th September:
1. Tough future for Rand:
The rand is expected to be beaten around by global markets in the coming months, as inflationary and interest rate pressure from central banks in the US and the European Union continue to dominate global market movements.
The European Central Bank (ECB) hiked interest rates by an unprecedented 75 basis points (bps) last week, increasing the likelihood of a bigger than expected hike from the South African Reserve Bank later this month.
On the same day as the ECB statement, the chair of the US Federal Reserve, Jerome Powell, emphasised that the Fed needs to act “forcefully”, which further cemented the market expectation of a third consecutive 75bps US policy rate hike later this month.
Investec chief economist Annabel Bishop said that markets will react directly to the US CPI figures coming this week, influencing the US dollar and so the rand.
“Currently, the Fed funds futures rate shows a 73bp hike is factored in by markets at the FOMC meeting this month – on 21st September – essentially factoring in a 75bp move,” she said.
The rand will take direction from this and is likely to fluctuate, weaker and stronger, for the remainder of this month and into the fourth quarter of the year, retaining high sensitivity to any and all US inflation figures, she said.
“Market expectations for September’s US interest rate move have been fluctuating, closer to between 50bp and 75bp earlier in the month, and a lower than expected CPI print could see the market move its rate hike view back closer to 50bp if this occurs,” she said.
In this event, the rand could see further strength against the greenback as the US dollar weakens a bit further, but this short-term volatility risks being overridden by the US PPI print coming out higher than expected later in the week or any following inflation indicator.
“Volatility will likely persist for the rand against the US dollar, while it has experienced greater stability against the GBP and EUR. However, over Q4.22, it may well see some more fundamental strengthening, drawing towards R16.00/USD instead of R17.00/USD,” Bishop said.
2. R47.3bn in unclaimed retirement funds:
There is still R47.3 billion in unclaimed retirement funds in South Africa. But there are also people who will use that fact to run scams, warns the Actuarial Society of South Africa (ASSA).
Pension funds are looking to pay out billions in unclaimed retirement funds, but they are simultaneously warning the public not to fall prey to scammers, says Jeanine Astrup, a consulting actuary and ASSA member.
Returning money to beneficiaries, or their descendants, is tricky, as they have to give verifying information to tracing agents hired by the pension funds.
Astrup understands that people might be wary about someone phoning them up and offering money, if they first need to hand over personal information such as ID and bank account details to facilitate the payment of benefits.
“With all the scams out there, it is no surprise that members are sceptical when, out of the blue, they receive a phone call or email advising them that the employer they left five, 10 or even 20 years ago would like to pay them money,” says Astrup.
She notes that simply dismissing legitimate approaches by tracing agents makes it very difficult for retirement funds to unite people with their benefits.
Those wanting to find out if they have pension funds coming their way don’t have to wait for a tracker to find them. All they have to do is contact the FSCA to see if they have money owed to them.
Here’s how to find out if you have pension funds due to you:
- Online search via the FSCA website
- Email enquiry for an ID number: Pensions.UBmemberID@FSCA.co.za
- Email enquiry for a general request: Pensions.UBQuery@FSCA.co.za
- SMS enquiry: send your ID number to 30913
- SMS general enquiry: text 30766
- Fax submissions: 086 578 1183
- Toll-free telephone enquiries: 0800 20 3722
- Walk in clients address: River Walk Office Park, Block B, 41 Matroosberg Road, Ashlea Gardens
3. Virtual emigration on the rise:
While South Africa contends with a surge in skilled individuals leaving the country, it also faces challenges with virtual emigration, where more skilled workers turn to remote work for foreign companies.
Boston Consulting Group (BCG) said the US, UK and Australia are among the top countries South Africans are looking to for remote employment.
A recent survey found that 73% of South Africans are willing to work for an international remote employer compared to the global average of 57%.
4. Lockdown on tyres from China:
South Africa’s four tyre manufacturing companies have welcomed the imposition of provisional payments on passenger, truck and bus tyres imported from China.
The International Trade Administration Commission (Itac) announced an additional across the board 38.33% anti-dumping duty on Chinese imports. The duties will remain in place until March next year.
The South African Tyre Manufacturers Conference (SATMC), representing Bridgestone, Continental, Goodyear and Sumitomo, says in a statement fairly traded imports at prevailing prices from countries like South Korea, Japan and the US will not be affected.
The local manufacturers applied for relief against dumped imports from China late last year.
Itac has now completed its preliminary report and found that there is evidence of dumping and that it is causing the local industry material harm.
“SATMC believes that these provisional payments will address the issue of unfairly traded tyres from China that over many years have caused the SACU [Southern African Customs Union] tyre industry to suffer material injury. It placed the tyre industry’s future, investment opportunities, as well as direct and indirect job creation, at risk,” says Nduduzo Chala, SATMC managing executive, in a statement issued shortly after the publication of the provisional payments.
Tyre imports carry general customs duties of 30% on passenger car tyres and 25% on truck and bus tyres. The imports from China will now carry an additional 38.33%.
Move will ‘drive prices up’
Gavin Kelly, CEO of the Road Freight Association, says the duty will increase the price of imported tyres “driving the price of the transportation of goods up by at least 8%”.
Depending on the transport leg variables, this could be more, he adds.
“This means that, despite the dire economic situation in the country, consumers will pay more for goods, including the basic basket of everyday food, transport and medicines.”
Kelly says the country cannot have a situation where tyres become so expensive that fleet owners and private individuals begin to push tyres to the extreme limits of wear and endurance.
He appeals to the Department of Trade, Industry and Competition to reconsider the decision.
5. Putco buses locked in protests:
Putco drivers have decided they will not be taking the latest wage deal.
This is after trade unions presented drivers with the proposed six percent increase.
The company had promised to resume operations on Monday, however, this has not happened so far.
Workers say anything less than the reinstatement of over 100 workers dismissed after embarking on the unprotected strike and honouring back pay is mere disrespect.
They have tasked the union’s representative to go back to the table and renegotiate.
Putco says it is monitoring the processes.
As they go back to the drawing board, it seems Putco passengers will have to wait a while longer.
All information sourced from articles posted by: BusinessTech, Business Insider, TimesLive, Moneyweb, and ENCA.
