News in South Africa 23rd March:
1. Stimulus package announcement today:
President Cyril Ramaphosa is expected to announced a new stimulus package to help businesses that are bleeding due to the coronavirus.
2. Moody’s decision Friday:
Moody’s will announce its decision on whether to downgrade South Africa to “junk” on Friday, but given that even the Reserve Bank now expects the economy will shrink this year, there is basically zero chance of a retrieve.
3. Trading halted:
It’s shaping up to be another rocky week in the stock market. US equity futures fell sharply after trading opened overnight, triggering a limit down trading halt.
The rand has slumped to R17.70/$ as investors dump risky assets. Moody’s is expected to downgrade South African government bonds to “junk” later this week.
Over the week, the US Senate failed to agree on a stimulus package designed to fight the sudden economic fallout from coronavirus. The rescue package would amount to roughly $1.6 trillion (R28 trillion) of aid, according to Politico.
Major US stock indexes are fresh off their worst week since 2008. The sudden economic slowdown forced by the global coronavirus outbreak has prompted experts all across Wall Street to warn of an imminent US recession.
4. Banks give reprieve for businesses:
Standard Bank is giving all of its business clients with a turnover of less than R20 million a year (and are up to date with their credit payments) as well as students, a debt repayment holiday from 1 April to end-June.
Under the terms of Standard Bank’s Coronavirus Business Interruption Payment Scheme, they won’t have to pay debt instalments for the next three months.
Businesses don’t need to apply for the debt repayment holiday – it will automatically apply to all clients with a turnover of less than R20 million per year, who are up to date with their payments as at the end of March 2020 and are in good standing with Standard Bank. Businesses which want to opt out of the arrangement need to contact the bank.
Following Standard Bank’s decision to extend a three-month debt repayment holiday to students and all businesses with a turnover below R20 million per year, Nedbank says it will offer all clients “individual solutions to cashflow challenges” due to the coronavirus.
This includes that they will be able to halt debt repayments (or part thereof) for a “suitable” period. Alternatively, their loan periods may be extended or they could get more credit to manage short term cashflow shortfalls.
“We are committed to supporting our clients during this time of uncertainty and have a number of solutions available to assist clients in good standing who are impacted by this pandemic,” the bank said in a statement.
5. Sol Kerzner passes:
The 84-year old Sol Kerzner died in Cape Town on Saturday, after a sometimes controversial career developing some of the world’s most spectacular resorts.
The youngest of four children, he was born in Doornfontein, Johannesburg to Lithuanian-born Jewish immigrants. His parents ran a store selling fruit and vegetables.
In 1979, Kerzner developed Sun City for R35 million in the homeland of Bophuthatswana. It had two casinos, a conference centre and an 18-hole golf course. While it was initially developed as part of the Southern Sun group, Kerzner would retain the Sun City assets when he launched a competitor, Sun International, in 1983.
Read Kerzner’s obituary in the article posted by Business Insider: https://www.businessinsider.co.za/sol-kerzner-2020-3
All information sourced from articles posted by: Business Insider