Bankers to get keys to kingdom

Nationalization, stimulation, subsidization, appropriation, bond buybacks and bailouts. In the space of a year, global policymakers have thrown away 30 years of free-market orthodoxy in an unprecedented intervention in the global economy. The Financial Post takes a look at the repercussions for growth, banking and monetary policy.

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Investors return to emerging markets

Emerging markets may have weathered the worst of the financial storm and could benefit as massive pension funds, with yawning deficits, desperately seek higher yields.

Chris Hart, an economist at Investment Solutions, said last week that global investors who had left emerging markets as risk aversion rose were starting to return. The flow of investment was likely to accelerate as “some decoupling” took place between the developing and developed world.

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Motor sector job losses top 36 000

South Africa’s automotive industry had already lost 36 000 jobs and many manufacturers were planning further retrenchments, Herman Ntlatleng, the auto and tyre sector co-ordinator for the National Union of Metalworkers of SA, said on Friday.

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Early MPC meeting is expected to cut rates

Some economists yesterday criticised the Reserve Bank for doing too little too late. After repeated calls from economists for the bank’s official repo rate to be cut, Reserve Bank governor Tito Mboweni has brought forward the next meeting of the bank’s monetary policy committee (MPC).

He announced on Wednesday that the MPC would meet on Monday and Tuesday instead of April 15 and 16, as was previously scheduled.

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Food inflation to ease up soon for consumers

South African consumers should experience lower food inflation over the next few months, according to Arthur Kamp, an economist at Sanlam Investment Management.

In spite of agricultural producer prices falling recently, food prices at the manufacturing and retail levels have continued to rise.

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Nationwide’s liquidators to claim damages from SAA

The liquidators of Nationwide Airlines hoped current proceedings before the Competition Tribunal would enable them to claim damages against SAA for an abuse of power by the national airline, Vernon Bricknell, the former chief executive of the airline, said on Friday.

Bricknell was commenting after giving evidence in the latest battle in a long-running war against SAA’s alleged anti-competitive conduct. The dispute, relating to an SAA incentive scheme for travel agents, has been fought before the competition authorities for almost a
decade. SAA abandoned the scheme from January 2005.

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Economy likely to shrink two percent

South Africa’s economy could contract by as much as two percent in 2009, according to Andre Roux, head of fixed income investment at Investec Asset Management.

At a presentation in Johannesburg on Thursday Roux cited the global banking crisis as the reason for the recession and said there could be no recovery until it was resolved and banks globally had resumed lending.

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Toyota seeks help from government

Toyota is forecasting its first loss in 59 years and is seeking loans from the Japanese government as private investors demand up to 50 percent more in interest for the firm’s debt.

The company’s financial unit might ask for ¥200 billion (about R21.4 billion) in loans, public broadcaster NHK reported on Tuesday.

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‘No SA owners for Waterfront’

Johannesburg – The likelihood of the V&A Waterfront getting into the hands of South African property companies is extremely slim.

Market rumours suggest that one of the largest shareholders, Dubai World, will be unable to get refinancing from local banks this month. Insiders however reckon that the other major shareholder, London & Regional (L&R), is keyed up to exercise its pre-emptive right if Dubai World should be forced to sell.

The two companies together own about 75% of the V&A, while the remainder is held in a trust by an empowerment group.

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