Nervous investors pull bourse under the spell of global credit jitters

By Reuters and Bloomberg

Johannesburg – Advancing mining shares, led by BHP Billiton and Exxaro Resources, failed to save earlier gains for the market on Friday as investors fretted about global economic prospects.

Market players were particularly wary of holding long dollar positions ahead of a long weekend, traders said. The JSE was closed yesterday for the Heritage Day public holiday.

The Top40 index closed 0.42 percent down at 27 049.61 points, after earlier flirting with 29 978.61, while the all share index ended 0.41 percent lower at 29 709.35 points. More…

Furniture retailers will feel heat of credit act

By Tom Robbins

Cape Town – Clothing credit retailers, such as Truworths and Foschini, would endure the climate of slower growth in consumer spending better than credit furniture retailers, such as the JD Group, Ellerine and Lewis, analysts have predicted.

This follows year-on-year furniture and electronic appliance sales falling for a second consecutive month in July as stricter lending criteria and high rates start to bite into spending on big-ticket items. More…

Yes, debt levels are high, but so is wealth

By Ethel Hazelhurst

Johannesburg – Though South Africans are more deeply in debt that ever before, they are also wealthier.

The net wealth of households as a ratio of disposable income rose strongly from a low of 298 percent in 2002 to 317 percent in the first half of this year, according to the Reserve Bank’s annual economic report, released yesterday. More…

Credit regulator hones in on non-compliant retailers

By SAMANTHA ENSLIN-PAYNE

Durban – The National Credit Regulator (NCR) is honing in on clothing retailers to check their compliance with the National Credit Act.

Gabriel Davel, chief executive of the NCR, said yesterday: “There are a couple of retailers we have issues with. We are doing a conduct review at four retailers.”

He declined to name them but said the NCR would examine the retailers’ upfront disclosure to consumers who applied for store cards. More…

Slower retail sales growth eases chance of rate hike

Local retail sales growth slowed to 4.9 percent year on year in July at constant prices, according to official data yesterday, weakening the argument for another interest rate hike next month.

Statistics SA said retail sales, the main measure of consumer demand, braked from an upwardly revised 7.1 percent in June and increased by 6.8 percent in the three months to July compared with the same period last year, also at constant prices. More…

Retail confidence keeps shining despite shadows

Confidence in the retail sector dipped in the third quarter of the year on higher interest rates and a new credit law, but retailers remained upbeat, a new survey showed yesterday.

The independent Bureau for Economic Research (BER) said its retail confidence index slipped to 84 points in the third quarter from a record high 91 in the second quarter.

Despite the fall, the index indicated an overwhelming 84 percent of retailers still found business conditions satisfactory. More…

Credit act flays first-time buyers

Property Editor
THE effects of the implementation of the National Credit Act, a relatively expensive residential market and higher interest rates are now being keenly felt, with First National Bank (FNB) reporting that activity in the residential property market is at its lowest level since the inception of the FNB Residential Property Barometer in 2003.

According to the latest FNB Residential Property Barometer, first-time buyers are also feeling the pinch of a tighter residential environment with the proportion of first-time buyers decreasing to 16% of all buyers from 32% in early 2005. More…

So much asked from too few NCA Debt counsellors?

One of the biggest question marks hanging over the National Credit Act, and there are some big questions dangling out there, is the question of whether there are sufficient suitably qualified and registered debt counsellors to deal with the needs of the NCA. The debt counsellors are an integral element in the debt relief and restructuring procedures of the NCA.

The task of NCA debt counsellor is even greater then that of the debt administrator in terms of Section 74 of the Magistrates Court Act, in that their functions cover amongst others: – initial debt counselling to the consumer – initiating, negotiating and co-ordinating any compromise offers to all the creditors of the consumer – drafting legal documents and overseeing applications to court for debt relief – administering monthly payment from the consumer and distributing these to creditors

Now in order to deal with all these tasks effectively I would submitted that the debt counsellors have to be well skilled in general counselling, financial literacy training, accounting, negotiation skills, financial administration, legal drafting, legal procedure and substantive credit law. Now those skills are no small ask and currently I believe the educational requirement for debt counselling in terms of the NCA is a matric as well as some form of training from an institution recognised by the National Credit Regulator on debt counselling in terms of the NCA.

So the first question are debt counsellors going to be sufficient trained to deal with their vast and important responsibility? Previously Mpho Thekizo, project manager: debt counselling at the National Credit Regulator (NCR) was quoted as saying, “We have developed a course and finalised the relevant training material….It is imperative that we start training people as soon as possible because the Act stipulates that from June 2007 there must be debt counselling services easily available to all South African consumers ….For a start we aim at training at least 500 debt counsellors nationwide.” June 2007 has come and gone and as appears later in this article, there does not appear to be any where this number of debt counsellors available to the public yet.

In order to attract sufficient debt counsellors with such high skill levels the remuneration will have to adequate. Therefore where will these funds come from? One can not burden an already over indebted consumer with charges commensurate with the service provided and the NCA limits charges to a minimal R50.00. So what are debt counsellors being paid and who is financing this?

I have asked this question to the NCR and I look forward to their reply of this issue. I am also awaiting the NCR to answer me on the issue of exactly how many debt counsellors they have out there and how the roll out of debt counsellors is going. Interestingly the NCR website now has a new section which currently details 35 registered debt counsellors.

The demographics of these debt counsellors are: Greater Johannesburg and Rand: 17 Greater Pretoria and northern Gauteng: 4 Durban: 3 Cape Town: 1 Stellenbosch: 2 Other areas: 8

One can but hope that the roll out of more debt counsellors who are sufficiently well trained and skilled to deal to the demand is imminent. As an indication of the need of South Africa in terms of debt counselling, their are approximately 17 million credit active consumer in the country and in April 2007 – 111 471 summons were issued out for outstanding debt and a large percentage of those debtors would need or look for debt counselling and its quite apparent that 35 debt counsellors could never deal with the smallest fraction of that number of debtors considering the extent of their tasks in terms of the NCA. More…

SA credit grantors waste billions on NCA

PIC Solutions

Already roundly cursed by bankers and house buyers alike, let alone bond originators, the National Credit Act, law since June 1 this year, has not been a bed of roses for the above. House and car sales have slowed as credit checking has tightened, and the frustrations have been many for credit grantors and their clients – and the costs have been high. Nedbank reports that it budgeted between R150 and R250 million for implementation costs related to the NCA*.

In the meantime, bond approvals are taking longer: up from three days to three weeks, say some estate agents. And time, for sellers, realtors and banks, is money. Others say the backlog will be cleared as new systems become entrenched and understood. Whatever the long term outcome, it seems that despite the phasing of the legislation and the long lead times given to get their houses in order, this notice was not used to advantage by credit grantors. Few were ready and most, like Nedbank, spent millions on compliance.  More…

US rate cut helps rand keep in shape

By Jacqueline Mackenzie

Johannesburg – The rand was sharply firmer in early trade on Wednesday as the US dollar hit a lifetime low against the euro after the US Federal Reserve cut rates by 50 basis points overnight.

By 8.50am the rand was bid at R7.0673 per dollar from its overnight close of R7.0918 and compared with R7.1747 at around 6.30pm on Tuesday. It was bid at R9.8888 to the euro from a previous R9.9189 and at R14.2472 against sterling from R14.2720 before. More…