August 2, 2011

Wage talks aim to end South Africa gold, coal strikes

By *media update*

Striking South African coal and gold miners’ unions were set to meet employers for talks at the Chamber of Mines on Monday in a bid to end stoppages that have cost Africa’s largest economy tens of millions of dollars in lost output.

The mounting impact of the country’s yearly strike ‘season’, which has also hit the fuel, diamond and steel industries, was seen crimping growth in the quarter and possibly pushing an already stagnant economy into contraction.

Some 100,000 gold miners downed tools on Thursday, halting work at AngloGold Ashanti, Gold Fields and Harmony Gold at a time when bullion is at record highs. Tens of thousands of coal workers have been off for a week.

Analysts say gold mining groups are losing about $25 million a day in production.

Gold’s run has been driven by its safe-haven status in the debt crises in Europe and America and analysts have said a prolonged strike in South Africa, the No. 4 producer of the precious metal, would help push bullion prices higher.

Spot gold was $1,615.80 an ounce by 1042 GMT on Monday, compared with a record high of $1,632.30 on Friday.

Markets were also watching wage talks between unions and managers at Impala Platinum, the world’s No. 2 producer of the precious metal, which were due to start around midday.

Impala and its larger rival Anglo American Platinum , which is also engaged in negotiations, together account for around two-thirds of global platinum output, so if strikes started there platinum prices are likely to rise.

ECONOMIC IMPACT

Data on Monday highlighted the impact of strikes in South Africa as unions seeks increases of 10 to 15 percent, far above five percent inflation rate.

South Africa’s Purchasing Managers’ Index (PMI) fell for the fourth straight month in July, sponsor Kagiso Securities said on Monday. Kagiso said strike activity hit the business activity sub-index, which dropped nearly 20 points, and led to some of the PMI decline.

‘It’s very possible we’ll see negative growth in the third quarter because of these unbelievable strikes. Something in the order of -0.5 percent. Already the economy is in a stagnant position,’ said Chris Hart, an economist at Johannesburg-based Investment Solutions.

The economy grew by 4.8 percent in the first quarter but the central bank has already said that momentum will not be maintained in the second quarter. The current wave of strikes could slow things further in the third.

A fuel strike that interrupted business and sparked panic buying at the pumps ended last week, but when workers go back to their jobs in one industry, labour strife flares in another.

The series of strikes highlight the difficult position of the ruling African National Congress, which is keen to attract foreign investment but is in a governing alliance with unions.

Monday’s gold talks were set to start in the morning but were delayed to the afternoon. Negotiators have narrowed the gap on gold wage negotiations, raising hopes of more progress, though neither side is predicting a breakthrough.

The NUM wants a 14 percent pay rise while the gold mine companies have offered rises of 7-9 percent.

A new round of talks to try to end the coal miners’ strike may avert supply problems to utility Eskom, which provides almost all of South Africa’s power and almost exclusively runs on coal.

Eskom has said it has around five weeks of stocks.

Analysts have said if the coal strike persists for at least another week, exports to Asia and Europe could be disrupted.

Coal firms affected include Anglo Thermal Coal SA, Exxaro, Optimum Coal and Xstrata Coal.

Article courtesy of London South East – please click here for the original article

Leave a comment | posted in commodites, economic growth, labour

July 28, 2011

Gold miners strike looms

By *media update*

More than 250000 workers in the influential gold sector are set to join the hundreds of thousands of employees already on strike countrywide.

The gold miners say their strike will “hurt the economy and cause it to cry like a baby”.

Gold miners will join about 150000 colleagues in the coal sector who downed tools on Sunday following a breakdown in talks between the National Union of Mineworkers and the Chamber of Mines.

Economists fear a prolonged strike in the coal sector might affect Eskom and threaten electricity supply.

The gold strike is expected to cripple exports and prevent mining companies benefiting from high gold prices, which are expected to hit record highs in a few days.

Referring to the breakdown in talks between NUM and the chamber, union spokesman Lesiba Seshoka said yesterday: “We could not achieve a settlement last night. We wrote a 48-hour notice for a strike on Thursday. Gold miners will down tools indefinitely until gold itself cries.

“We are demanding an increment of about 14%, but the employer is giving us 7%. You can see for yourself that the economy will cry like a baby.”

Major players that will take a knock include AngloGold Ashanti, Harmony Gold and Gold Fields, while the coal sector includes Exxaro and Anglo Coal.

Yesterday, the chamber met NUM to continue negotiations relating to the coal sector. Both parties declined to comment on the meeting, except to say the strike continued. They would resume negotiations.

Regarding the looming gold strike, Harmony CEO Graham Briggs said: “We have made a reasonable offer to the trade unions, which has been rejected. We are now preparing for a possible strike. This means that operations will be closed, assets will be secured and measures will be taken to ensure that expenditure is kept to a minimum.”

AngloGold Ashanti spokesman Alan Fine said he hoped the next few days of negotiations would yield results. “We really want to avoid the strike,” he said, declining to comment on how the industrial action might affect operations. “Let’s wait and see.”

Economist Dawie Roodt said a strike in the gold sector would not have a significant impact on the economy.

“If you stop working for a week or two it is fairly easy to catch up with production. It will be disruptive to the particular mines, but not the economy. It’s bad, but it wouldn’t disrupt the economy,” he said.

Chris Hart, an economist with Investment Solutions, agreed, saying the action would be felt within the gold-mining industry but not in the broad economy.

However, both economists said a protracted coal strike could be extremely disruptive for the economy.

“The coal sector is important for electricity-generation,” said Hart. “However, Eskom says there are enough contingency supplies. It says it has 38 days’ worth of coal supplies.”

Roodt said: “If [the coal strike] goes for three to four weeks, we will all pay a huge price as we will not have electricity.”

In recent weeks, hundreds of thousands of workers across the country have downed tools during mid-year bargaining known as the “strike season”. Workers are demanding double-digit pay rises; many employers are offering between 7% and 9%.

The petroleum and pharmaceutical workers’ strike is in its third week, and 6000 employees from the industry are expected to march to Sasol’s head office in Rosebank, Johannesburg.

Article courtesy of Times Live – please click here to see the original article

Leave a comment | posted in commodites, labour

July 25, 2011

Despite the Greek bailout … It could be high noon

By *media update*

While many sighed with relief at news of a new bailout plan for Greece, which removes the immediate risks of a wider European crisis, local analysts warned that SA stood to be affected by the problems in Europe.

Before a deal was reached late on Thursday, finance minister Pravin Gordhan said SA would not escape unscathed from an escalated European crisis, although its exposure to countries in the current turmoil is reasonably low.

EU leaders agreed to a bail-out package of à109-billion for Greece and a temporary, orderly Greek default.

According to John Cairns, currency strategist at Rand Merchant Bank, the bailout is comprehensive, sensible and better than anyone had expected. He said that while it does not resolve long-term solvency problems in Greece or other EU states, it removes immediate risks. Risks of a complete blow-out of the rand would also dissipate, he said.

“It is important to know that this week’s bailout is very temporary,” said Chris Hart, economist at Investment Solutions.

Gordhan said that, as a small, open economy, SA would be hit by trouble in Europe and analysts agreed.

“We cannot avoid a fallout (in Europe). We are no longer an isolated island, we are part of the global village,” said Ian Cruickshanks, head of treasury strategic research at Nedbank Capital.

“But there has not been a failure as such and it has been shown that the European community cannot allow any member to fail, because if it does the risk is that the sovereign debt held by the banking sector would be written down close to zero, closing down their new business potential and strangling the economy.

“(A sovereign default) will not happen, that has been demonstrated with this bailout package and the actions of the US Fed and the Bank of England who have all pumped money into the system to ensure that there is not a domino effect on the banking sector like there was after the collapse of Lehman Brothers.”

Cruickshanks said that as the EU accounted for 35% of SA’s international trade, a scenario of failures in the EU – which he did not expect – would lead to a fall in imports from SA.

“In such a scenario we would find our trade account going into a deficit, and that would negatively affect the current account and then risk the currency being downgraded.

“If the EU rescue package was not there we’d have severe trade problems, which would mean severe current-account problems and would have very negative long-term ripple effects.”

Gill Marcus, the governor of the Reserve Bank, said at Thursday’s interest rate announcement – where rates were kept unchanged – that as long as the sovereign debt crisis was unresolved, confidence would not be restored and periodic bouts of risk aversion could contribute to a high degree of volatility in financial markets.

The Reserve Bank and the treasury were discussing options to protect SA’s banking system, she said.

“The challenge in the nature of the crisis in the eurozone is that it can be triggered by a number of things and it can take different forms.

“The best scenario would be no disorderly default.”

Marcus said even if Europe and the US solved their debt problems, they faced a long period of recovery and difficult economic times.

“This is heightening the risk issues and we as a country need to pay attention to just how grave the situation is.”

Ulrich Joubert, an economist at Kruger International, said the current stimulus and possible lifting of the debt ceiling in the US, as well as the return to fiscal discipline the Europe, would eventually mean lower economic growth, which would continue to affect SA’s exports.

This could be exacerbated by the underlying risks in the Chinese economy and possible overheating of the country’s property market, he said.

The message from the problems in the EU and US is that SA has no choice but to keep its fiscal house in order.

“The most recent budget led to some alarm bells if the money spent on public sector wages and social grants is considered compared to the money spent on fixed investment,” Joubert said.

“For a country like SA to retain or improve its credit rating, long-term risks like rising public sector wages and social grants should be brought under control and the emphasis should be on investing.”

Cruickshanks said with a sovereign debt-to-GDP ratio of about 35% SA is not over-indebted relative to the size of the economy. Greece was hopelessly over-indebted with a ratio of 130%, which caused the market to stop lending it money.

“SA is seen as a well-managed economy with strong monetary and fiscal discipline, therefore we will continue to attract funding,” he said.

Hart said investors would continue to be attracted to SA. “The only problems are the own-goals that SA scores, like the strikes and the nationalisation debate,” he said.

Article courtesy of Business Live – please click here to see the original article

Leave a comment | posted in economic growth, eurozone, monetary policy

July 21, 2011

Rand steady at noon

By *media update*

The rand remained steady, trading in a narrow range, in midday trade on Wednesday as global markets marked time ahead of crucial debt meetings in the Eurozone.

The local currency paid little heed to consumer inflation data for June which was in line with expectations and supported economists’ views that a rate increase remains unlikely this year.

At 12pm local time, the rand was bid at 6.9026 to the dollar from its previous close of 6.9118. It was bid at 9.8090 to the euro from 9.7843 before, and at 11.1085 against sterling from 11.1317 previously.

The euro was at US$1.4207 from US$1.4169.

A local dealer said he expected “more of the same” ahead of crucial meetings in the Eurozone to tackle debt concerns.

“I would expect the rand to trade in a sideways movement,” he said, pointing to a range of 6.86-6.98 against the dollar.

“The euro is a little stronger, but the market is headline-driven at the moment, resulting in sudden little moves. But we’re not expecting much change ahead of the Eurozone meetings,” the trader added.

Standard Bank analysts said in a morning report that rand bears had backed off as risk aversion eased.

Michael Keenan, head of forex research, said that risk appetite improved on Tuesday on better-than-expected US housing data, encouraging US corporate earnings, President Obama’s plan to reduce the US’s debt as well as optimism that EU leaders would reach an agreement about how to deal with the Eurozone’s debt. This saw the rand enjoy some short-covering.

“However, rand strength was curtailed by the unresolved domestic fuel strike.

“We believe that global risk appetite is driving the rand. However, we argue that SA retail sales data will have a greater bearing on the rand than CPI data because inflation is still comfortably within the SARB’s 3-6 percent range and SA monetary policy is only likely to start normalising when local demand recovers on a sustained basis,” Keenan said.

Standard Bank however added that if either data release surprised to the upside, it would be regarded as rand-positive because such an outcome would help maintain the rand’s real yield differentials even if inflation keeps climbing.

RMB analysts said in their morning brief that the relief rally had proved stronger than expected but was losing speed coming into this morning.

“The most USD/ZAR can do ahead of tomorrow’s Eurozone summit is probably 6.90. Multi-day risks remain to the upside,” the group said.

Meanwhile Dow Jones Newswires reported that hopes for an agreement on financial aid for Greece supported the euro, but the single currency remained in a narrow range ahead of the EU’s emergency summit Thursday.

Bonds firmer after CPI data 

Bonds were up to five basis points firmer in midday play on Wednesday, as CPI data came out in line with market consensus.

The increase in South Africa’s consumer price index (CPI), which is used by the SA Reserve Bank (SARB) for its inflation target, was 5.0 percent year on year (y/y) in June, from 4.6 percent y/y in May, Statistics SA (Stats SA) said on Wednesday.

This was in line with to a survey of leading economists by I-Net Bridge. Forecasts among the eight economists ranged from 4.77 percent to 5.1 percent. CPI was 0.4 percent month on month (m/m) from 0.5 percent in May.

Chris Hart, an economist at Investment Solutions said: “Clearly the CPI is still on the upward trend and this is expected to continue until the year-end. The rand continues to strain the CPI in the face of very excessive cost expenses. Basically, there is no pressure on the Reserve Bank yet, but when CPI reaches 6 percent then the Reserve Bank will increase scrutiny.”

By 11.50pm, the benchmark R157 bond was at 7.470 percent, from its previous close of 7.495 percent. The R207 was bid at 8.320 percent and offered at 8.295 percent from 8.370 percent, and the R186 was trading at 8.575 percent from 8.615 percent.

Article courtesy of iafrica.com – please click here for the original article

Leave a comment | posted in bonds, currency, eurozone, inflation, monetary policy

July 21, 2011

Food inflation drives June CPI to 5.0%

By *media update*

South African inflation rose in line with expectations in June at a year on year rate of 5.0% from 4.6% in May. The food and non-alcoholic beverages index contributed significantly to the June figure, rising 7.1% in June from 6.1% in May, Stats SA reported on Wednesday.

Gina Schoeman, Economist at Absa Capital, said that while food inflation was likely to rise more in the third quarter, base effects should push it a bit lower in the fourth quarter.

CPI rose by 0.4% month on month in June, compared to a rise of 0.5% in May.

Higher prices associated with food and beverages, housing and utilities, and transportation were the key contributors to the 0.4% monthly increase in the CPI, Adenaan Hardien, chief economist with Cadiz Asset Management, said.

Food and beverages and transportation have seen a major increase in their contributions to overall inflation over the last 12 months, Hardien said, adding that food inflation would likely peak in December at a rate above 11%.

The housing and utilities index increased by 1.0% between May and June, Stats SA reported, mainly due to a 1.5% increase in actual rentals for housing and a 1.6% increase in owners’ equivalent rent.

A 6.5% increase in public transport between May and June led to a 0.6% rise in the transport index between the two months.

Pressure also emanated from the still-high cost of petrol, despite the two cents a litre decline in the pump price [in May], Shireen Darmalingam, Standard Bank economist said.

Peter Attard Montalto, an analyst with Nomura International, said that pass through and more relaxed margins seemed to be occurring in service prices but not in goods prices yet.

“This can certainly change through Q3 as the wage round starts to filter through and surveys still suggest that retailers are more ready to widen margins,” he said.

The SA Reserve Bank’s Monetary Policy Committee would not see any second round effect pressures for now, Attard Montalto said. The bank previously said that it would “act” appropriately on interest rates should inflation second round effects become visible in the economy.

There was no pressure on the Reserve Bank to hike interest rates yet, according to Chris Hart, economist with Investment Solutions. “But when CPI reaches six percent then the Reserve Bank will increase scrutiny,” he said.

The MPC’s three-day meeting ends on Thursday with the announcement on interest rates expected shortly after 15:00.

The Nedbank Economic Unit noted the latest CPI figure was not likely to have a “major impact” on deliberations at the MPC meeting, with the focus more on the dangers of recent above-inflation wage settlements.

Looking ahead, there were still a number of clear upside risks to local inflation, Kevin Lings, Stanlib’s economist, suggested.

“These include higher food inflation, and higher energy prices,” Lings said. The extent to which these price pressures would impact on inflation would be heavily influenced by the rand exchange rate, he added.

Article courtesy of BusinessLive.co.za – please click here to see the original article

Leave a comment | posted in inflation, monetary policy

July 20, 2011

Striking workers start to lose money

By *media update*

Johannesburg – The strike season in SA is in full swing but a tipping point is within reach when it comes to the loss to the strikers themselves, according to analysts.

Dawie Roodt, an economist at Efficient Group, said: “If there are 50 working weeks in a year, then one week is about 2% of the year. So if I want an additional 2%, I can afford to strike and provided I get the 2%, I’m not worse off and not better off, I am at break-even point. However, if I want 2% and I strike for two weeks, it doesn’t make sense because I’ve essentially lost 2%.

“Right now, it’s been about two weeks since the strike began and the unions have lost 4%, so they have roughly reached break-even point. If they strike for another week, it becomes irrational to strike,” Roodt said.

The National Union of Metalworkers (Num) kicked off strike season two weeks ago on Monday July 4, and an increase of 8% to 10% was agreed upon which would run for the next year.

The Chemical, Energy, Paper, Printing, Wood and Allied Workers Union (Ceppwawu) as well as the General Industries Workers Union of SA (Giwusa), who together represent about 70 000 workers, began strike action last week also demanding better wages and employee benefits.

Unions are pushing for an increase of between 11% and 13%, whereas employers are offering between 4% and 7%. Some of the more visible effects of the strike include fuel shortages in some areas and Investment Solutions economist Chris Hart predicts a 0.2% reduction in economic growth from the strike action.

Independent Research obtained by BusinessLive/I-Net Bridge has estimated how much it costs the average striker to participate in the strike and how much time it would take to recover the loss of earnings, even if the increase the unions are fighting for is accepted.

According to the research, if one assumes that a striking worker earns an average of R48 000 per annum before tax and he or she works nine hours a day for 250 days out of the year, their average daily rate is about R192.

With the Ceppwawu strike now in its sixth day, that worker has already lost R1 152, and it would take 55 days to recover that loss even with an 11% hike. This is because the increase that the striker will receive does not make up for the loss incurred while striking.

If a striker earns R192 per day and receives an 11% increase, the rise in earnings per day is R21.12. So, to make up for the amount lost while striking, they would have to work an additional 55 days.

Sacrifice

John Appolis, national policy coordinator for Ceppwawu, said that the strike is continuing and that the union is still negotiating with the pharmaceutical, industrial chemicals as well as the petroleum industries.

“At the moment industrial chemicals is offering 7.5% and the petroleum industry is offering 8%. We are going to take the offers back to our members and hear their response,” he said.

He added that while the unions don’t calculate how much money is lost during a strike, the members know that they have to make a sacrifice.

“Our members know that no work means no pay and they also know that in the long term they will have improved wages as well as benefits. However, to enjoy these benefits they have to make a sacrifice in the short term, and they know that,” he said.

Article courtesy of Fin24.com. Please click here to see the original article

Leave a comment | posted in 3rd world, economic growth, labour

July 19, 2011

Rand weakens as major currencies gain ground

By *media update*

Johannesburg. The South African rand weakened against major currencies, as investors shield away from risky assets.
“The last two days have seen the rand trading weaker on worries about poor performing European banks and fears about US credit ratings.

The rand will be unlikely to weak any further from here. We expect the rand to remain in the range we set which is between 6.60 and 6.97,” said Chris Hart, Chief Strategist of Investment Solutions.
The strike by steel, engineering and energy workers has also being weighing on the rand. “I think there’s still a lot of investment merit for investment inflows to come in South Africa as conditions deteriorates in developed economies,” said Hart.
The rand fell almost 1 percent this week. The South African currency was trading at 6.90 to the US dollars from 6.85 from previous day’s close. Pound Sterling was at 11.11 after touching 11.04 on the previous day’s session. The euro was costing 9.75 rand from 9.71 rand. The dollar was softer against the Japanese Yen at 79.10 from 79.12.

On the capital market, bonds are flat, with the yield on the R157 government bond at 7.45 per cent from 7.48 per cent Thursday. (Xinhua)

Article courtesy of The Citizen – please click here to see the original article

Leave a comment | posted in bonds, currency, international, investment, labour

July 15, 2011

Economists warn of tough times ahead

By *media update*

South Africans have barely recovered from the grim 2008 global recession and economists are advising that the end is not in sight.

In fact, as European countries such as Greece, Ireland, Italy, Portugal and Spain struggle to keep their economies afloat and the US debates elements of legislation to reduce its deficit and raise the debt ceiling by August, local economists are painting a bleak picture of a double-dip recession.

Chris Hart, an economist at Investment Solutions, says slow growth in Europe, Asia and the US in the previous quarter is a sign that the world is heading back into the recession.

“My biggest worry, in that context of a slowdown, is that we are having strikes, and we are likely to struggle in the third quarter,” he said.

“If not for the strength of the rand, we would be much worse off.”

Lullu Krugel, a senior economist at KPMG, said the economy was dependent on the health of the average consumer because more than 60% of gross domestic product was contributed by spending in sectors such as retail, banking and property.

“The pace of inflation increases has also quickened, with food inflation, increases in fuel prices [although there has been some relief of late] and electricity price increases hitting the pocket of the consumer,” she said.

Inflation, combined with job losses and lower pay increases by employers to reduce the number of potential retrenchments, had led to the South African consumer – already deeply indebted – feeling even greater pressure, Krugel said.

Several major companies are consulting unions about restructuring of their businesses that will inevitably lead to job losses.

Loane Sharp, Adcorp’s labour market analyst, said big private-sector companies would be worst hit by the retrenchment tide this year, with the government and its parastatals unlikely to shed jobs.

Retail giant Pick n Pay is the first, with plans to retrench 3000 employees.

Announcing the retrenchments last week, operations director Neal Quirk said the decision was motivated by declining profitability and loss of market share.

“We’ve worked hard at looking at possible alternatives that may reduce the number of full-time people affected and these options will be discussed during our consultation process with the union,” he said.

Azar Jammine, a chief economist at Econometrix, said he did not anticipate a major downturn in domestic economic growth over the next 18 months, barring a double- dip recession in the world economy, which could not be ruled out.

The fears come on the back of Adcorp’s Employment Index, released on Monday, that showed 127000 permanent jobs and about 5712 temporary jobs were lost last month.

While Japan’s growth has been slowed by the tsunami, economists predict that countries like the US and Italy will take a few years to recover from the 2008 recession because of sovereign debt – money owed by their central banks.

Economists say pressure on the South African economy is intensified by:

  • An increase in inflation, caused by exorbitant electricity tariff hikes and petrol price increases, among others;
  • Companies selling off some of their assets to finance debt, which caused the 2008 recession;
  • Over-indebtedness of consumers; and
  • Foreign companies’ reluctance to invest in a country where there is political tension and demanding labour unions.

Ronel Oberholzer, a senior economist from IHS Global Insight, said South Africa’s recovery from the 2008 recession was hampered by its lack of competitiveness, a result of “increasingly militant and demanding trade union activity”.

“When investors are presented with a choice between investing in an economy with rising political and social tension and a labour force that presents significant disruption to the economy and demands double-digit wage increases (even if they are justified) or an economy with weak unions, cheap semi-skilled labour and an environment that is conducive to attracting investment, most investors would pick the latter.

“Unfortunately, there are numerous countries which fall into the latter category, and they are the ones that are experiencing high growth rates since the recession,” she said.

Lew Geffen, the chairman of Sotheby’s International Realty, said his group had lost 20% in profits in the quarter ending in June.

He said the situation was replicated across the property sector, which was suffering from a soccer World Cup hangover.

“Our economy does not seem to be picking up as much as it should be, and this is also because of the strikes, the National Credit Act and political utterances from certain people – that has caused jitters in the market.”

Article via Times Live – click here to see original article

Leave a comment | posted in currency, eurozone, household, inflation, property

July 14, 2011

Economists warn of effects of fuel shortage

By *media update*

Although the immediate impact of the petroleum industry strike and fuel shortages may not be put in monetary terms just yet, the economic ramifications will be dire, economists have warned.

Freddie Mitchell, an economist with Efficient Group, told I-Net Bridge/BusinessLIVE that “some lower economic activity” should be expected following reports of fuel shortages at some filling stations, especially around Gauteng.

Fuel was not being delivered to filling stations due to a strike by the Chemical, Energy, Paper, Printing, Wood, and Allied Workers Union (Ceppwawu), the General Industries Workers’ Union of SA (Giwusa) and the South African Chemical Workers Union (Sacwu).

Union demands included a wage increase of between 11% and 13% across the board, a minimum wage of 6,000 rand per month and a ban on labour brokers. Employers offered between 4% and 7%.
Mitchell suggested that without fuel, economic and trade performance and “anything related to moving goods from one point to another” would be affected.

Chris Hart, an economist at Investment Solutions, referred to the strike as a “difficult set-up” because the strike was “snowballing”.
Fuel shortages would increase inefficiencies, Hart added.

Contracting other workers to deliver the fuel to filling stations by fuel retailers carried some risks, Mitchell and Hart suggested.

“One may have to resort to contracting, but there’s quite a bit of intimidation and violence associated with strikes,” Hart said. Mitchell said even those not participating in the strike and would like to help out by delivering the fuel were hesitant as “you’re not sure you’re going to make it back”.

Jac Laubscher, group economist at Sanlam, said it was difficult to make “definitive” statements on the kind of impact the fuel shortages would have on the economy, but noted that fuel was a basic input in transport and that any shortages could be “very disruptive if we see them on a large scale”.

Article via Business Live – click here to view original article

Leave a comment | posted in 3rd world, media update, service sector

July 14, 2011

News in Brief

By *media update*

Rand loses out to dollar amid euro worries

The rand lost ground yesterday to a low point of R6.95 to the dollar, before recovering to be bid at R6.8871 at 5pm. The currency has weakened sharply from R6.68 last Thursday. Investment Solutions economist Chris Hart said the slide in value was a reflection of dollar strength, after recent concerns about debt default in the euro zone eroded the euro’s value. He said domestic factors, such as a series of strikes, were unlikely to have played a part in the rand’s weakness. To support this argument, he pointed to the JSE, where the all share index rose 0.26 percent yesterday. – Ethel Hazelhurst

Union prepares for Walmart hearings

Next Tuesday the SA Commercial, Catering and Allied Workers’ Union will present a submission to the portfolio committee on economic development’s public hearings on Walmart’s takeover of Massmart. Massmart is also preparing a submission and will attend the hearings, even though it has had no interaction with the committee.

Article via IOL.co.za – click here to see original article

Leave a comment | posted in currency, labour, markets

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