Retail sales paint a picture of hard times for consumers

Johannesburg – Consumers are being hard hit by the combined pressure of interest rate hikes and rising food and fuel prices, data show.

Retail sales fell by 4.6 percent in July, compared to an upwardly revised contraction of 1.5 percent in June, Statistics South Africa said on Tuesday.

In the three months to the end of July, retail sales – a key measure of consumer demand – fell by 3.4 percent compared to the same period the previous year, also at constant prices. More…

No retail therapy for a while

Johannesburg – Consumer demand is unlikely to pick up in the short term, Nedbank group’s economic unit said on Tuesday.

This followed the release of retail sales data earlier by Statistics SA.

The statistics agency said that retail sales at constant prices fell by 4.6 percent in July 2008 compared with July 2007.
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Credit crisis shakes Investec – but foundations stable

Johannesburg – Specialist banking group Investec on Thursday said operating fundamentals across the group continue to be impacted by the global credit and capital market crisis and volatile equity markets.

However, the group has continued to benefit from its recurring revenue base and geographical and operational diversity, it said in a trading update for the first half of the current financial year.

Investec chief executive officer Stephen Koseff said: “Although the reporting period has not yet ended, at this point the group expects to report normalised operating profit in line with the prior year, with the South African and UK operations recording an increase and the Australian operations a decline in operating profit.”
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Mboweni sits tight as other central bankers pour out cash

It’s business as usual in SA on the sidelines of international market frenzy, says governor
September 19, 2008

By Ethel Hazelhurst

Johannesburg – As major central banks pumped money into the world’s banking system yesterday, SA Reserve Bank governor Tito Mboweni said the bank “has not been required to take any special action” to stabilise the local interbank market.

Speaking at the bank’s annual general meeting, he said the central bank “conducted its monetary and open market operations as normal”.

He stressed that local banks had little direct exposure to the US mortgage-backed securities market and “continued to operate relatively smoothly”.
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Inflation’s tighter grip bodes ill for rate cut

By Ethel Hazelhurst

Johannesburg – Inflation has continued to reach record highs despite a fall in fuel prices last month. Statistics SA reported on Tuesday that CPIX (consumer price index minus mortgage costs) inflation was 13.6 percent over the 12 months to August, compared with 13 percent in July. The index rose 0.9 percent in the month.

The previous year-on-year high was recorded in November 2002, when CPIX touched 11.3 percent.
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First-time buyers need a break – ReMax

A serious review of laws is needed to stimulate the property market and encourage first-time buyers.

This is the view of Jeanne van Jaarsveldt, financial director of ReMax of Southern Africa, who said he would like to see the current threshold on payment of transfer duty to kick in on sales above R1 million. This should be accompanied by meaningful tax breaks for first-time buyers.
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Consumer Protection Bill to go to parliament

By Donwald Pressly

Cape Town – The final touches to legislation that hugely expands the concept of consumer rights in South Africa were carried out by the national assembly’s trade and industry committee this week.

The Consumer Protection Bill, which is now ready to go to a plenary of the national assembly before being considered by the national council of provinces, will allow consumers to direct complaints about any goods and services to a new consumer commission “without a whole lot of red tape”, according to ANC MP Ben Turok. He described the move as a “far-reaching” entrenchment of consumer rights.
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Debt counselling shields client from R1.2m blow

By MediaOnLine

Cape Town – Statistics SA data show that 109 259 summons for debt were issued and 57 306 civil judgements for debt amounting to half a billion rand were passed in in June, but at least one man avoided being drowned by his debts.

Andre Snyman, managing director of Consumer Assist, one of South Africa’s largest debt counselling organisations, said the man “was over-indebted and owed R3 004 985, including his bond. He was paying off R24 400 a month but the interest over the 240 months of the debt was going to amount to R2 783 466 alone. In other words over 20 years, he would pay out R5 788 451.

“The debt counsellor restructured his debt after negotiations with creditors. His monthly payment has dropped to R16 890 a month, which means total interest will come down to R1 544 233 and the debt will be reduced to R2 862 133 – including the debt counselling fees. More…

Analysis: Credit crunch may trigger mining mergers

By Jackie Cowhig and James Macharia

The global credit crunch is likely to result in more consolidation among junior South African mining firms, but all enterprises are feeling its bite, even Eskom, according to industry sources and analysts.

Fortunately for the mining industry as a whole, high commodity prices are providing a cushion against more expensive borrowing and soaring operational costs.

With international banks struggling under the credit crisis, liquidity is especially tight for juniors.

Gerard Kemp, the head of Africa’s biggest private equity fund, the Pamodzi Resources Fund, says the fund has looked at about 90 opportunities in the South African coal sector, but they lack infrastructure or are too costly to fund. More…

Credit crunch is just the end of the beginning

Here’s some “big picture” numbers on the state of the world’s financial system. According to ING, the total value of assets written down by Planet Earth’s big banks is $502 billion. The total value of capital raised by the same: $35 billion. That deficit, of $151 billion could easily get much much bigger. No wonder the Deputy Governor of the Bank of England, Charlie Bean, said the other day that the slowdown may “drag on for some considerable time”, while the IMF has called it “the largest financial shock since the Great Depression”.
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