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IOL News
6 days ago
- Business
- IOL News
Sarb poised for rates cut despite inflation tickin up to 4-month high
Stats SA chief director of price statistics, Patrick Kelly, said the annual rate for food and non-alcoholic beverages has notably surged to a 15-month high of 5.1%, with meat prices—especially beef—being the primary culprit behind this uptick. Image: Simphiwe Mbokazi/Independent Newspapers The South African Reserve Bank (Sarb) may once again loosen its monetary policy before the year draws to a close despite recent data revealing an uptick in consumer price inflation. This comes as the Sarb's Monetary Policy Committee (MPC) will announce its decision on the policy rate next week after cutting the repo rate by 25 basis points to 7.25% per annum in May. Data from Statistics South Africa (Stats SA) on Wednesday showed that the headline consumer price index (CPI) edged higher to 3.0% in June after holding steady at 2.8% in April and May. This was the 11th consecutive month in which inflation remained below the 4.5% midpoint of the Sarb's 3-6% target range. Stats SA chief director of price statistics, Patrick Kelly, said the annual rate for food and non-alcoholic beverages has notably surged to a 15-month high of 5.1%, with meat prices—especially beef—being the primary culprit behind this uptick. The price of beef significantly rose on the back of the food and mouth disease outbreak in meat producing provinces, reducing the supply of red meat more than the demand in the market. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading "Meat – particularly beef – continues to be the main driver of food inflation," Kelly said. "Beef prices spiked for a third successive month, with high annual and monthly increases recorded for stewing beef, mince and steak. Stewing beef rose by an annual 21.2%, the fastest pace on record since the current CPI series began in January 2017." Analysts are closely watching the Sarb's next moves as they navigate the complexities of a fluctuating economic landscape. Dr Elna Moolman, Standard Bank Group head of South Africa Macroeconomic Research, said consumer inflation re-entered the Sarb's target range again in June after falling below the 3-6% target range for three consecutive months. 'Such low inflation provides considerable support for consumers, given that most wage increases are higher than this low prevailing rate of inflation. It also arguably supports the case for the Reserve Bank to cut interest rates further at the upcoming MPC meeting next week,'Moolman said. 'We do expect inflation to continue trending higher in the coming months, but it should remain reasonably benign.' On a monthly basis, the CPI increased 0.3% following a 0.2% rise in May. Meanwhile, the annual core inflation rate edged down to 2.9% in June, the lowest since April 2021, from 3% in each of the previous two months. David Omojomolo, Africa economist at Capital Economics, noted that the slowdown in core inflation has set a favourable backdrop for potential interest rate cuts, reinforcing the Sarb's stance against excessive underlying price pressures. Omojomolo projects considerable relief for consumers, forecasting further cuts by year-end 'We expect rates to be lowered by more than most currently anticipate by the end of next year. The outturn was a touch stronger than our forecast that inflation would stay unchanged at 2.9% year-on-year, but in line with the LSEG consensus,' Omojomolo said. 'We expect a 25 basis points cut to 7.00% at the MPC meeting next week. And we think the Sarb will cut interest rates by another 125 basis points to 5.75% by end-26, further than most expect – even if the inflation target is lowered.' In a recent statement, Sarb Governor Lesetja Kganyago hinted at a potential shift in the bank's inflation target, considering a lower objective of 3% in light of internal and external analyses indicating that its current target may be unusually high. Nedbank economist Busisiwe Nkonki fforesees ongoing upward pressure on inflation during the second half of the year, primarily driven by food and fuel costs. The ongoing foot-and-mouth disease outbreak is expected to result in soaring meat prices, compounded by unpredictable geopolitical developments impacting the global price of Brent crude oil. 'We believe that the benign inflation outlook and muted domestic demand, amongst other factors, will convince the MPC to cut interest rates by 25 basis points next week,'she said. 'However, the MPC's decision will also be influenced by the US Fed's decision in the same week. Therefore, there is a chance that the MPC could delay the cut to September.' BUSINESS REPORT
IOL News
11-07-2025
- Business
- IOL News
Blue Label to rebrand amid restructuring for potential Cell C listing
Cell C, South Africa's fourth largest mobile network operator, may list separately on the JSE in terms of a restructure underway at its parent Blue Label Telecoms, which in turn also rebranded itself Blue Label Unlimited Group. Image: Simphiwe Mbokazi Blue Label Telecoms said on Friday its directors will change the name of the company to Blu Label Unlimited Group, following a significant restructuring of its businesses that may eventually entail the listing of Cell C. The company announced in a notice on Friday that it is undergoing a significant restructuring that involves the separation of its telecoms and non-telecoms business units. The share price, which has risen from only R4.27 a year ago, had increased by 0.86% on Friday afternoon to R14.15. 'In light of this strategic shift, the board believes it is prudent for the company's name to reflect this new direction by omitting the reference to 'telecoms.' They also noted that the adjustment of the term 'Blue' to the abbreviated form 'Blu' aligns with the recent adoption of the trading name and logo 'Blu' across various marketing platforms. 'The board has therefore resolved to recommend the change of name to the shareholders of the company for their approval, deeming it a more fitting representation of the company's evolving identity and business focus.' The share code and JSE listing will remain unchanged. In May, Blue Label stated that it was exploring a potential restructure of the group to aid in the separation and potential future listing of Cell C on the Prime Segment of the Main Board of the JSE. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ 'The proposed restructure is expected to encompass various ancillary transactions aimed at optimising Cell C's capital structure and balance sheet in preparation for a potential separation and future listing on the JSE. Should Blue Label elect to implement the proposed restructure, it is envisaged that the various restructuring steps will be inter-conditional and contingent upon the potential listing of Cell C.' They said a separation and potential listing of Cell C from Blue Label's existing distribution businesses would allow investors to independently assess the value and strategic focus of each business. Earlier this month, Blue Label warned shareholders that the terms and conditions of the restructure were still being developed and remain subject to ongoing engagement and approvals. Visit:
IOL News
09-07-2025
- Business
- IOL News
SA sugar association warns that 30% US tariff will threaten local industry and jobs
The South African Cane Growers Association has expressed concern over the looming 30% tariff on sugar exports to the United States Image: Simphiwe Mbokazi/Independent Newspapers The South African Cane Growers Association has expressed concern over the looming 30% tariff on sugar exports to the United States, warning that the move could undermine the competitiveness of South African sugar. Starting on August 1, 2025, all South African exports will face a 30% tariff after US President Donald Trump sent a formal letter to President Cyril Ramaphosa earlier this week, alerting him of the new terms.. This comes despite Ramaphosa's efforts to maintain and strengthen bilateral trade relations between South Africa and the US, including recent discussions in the White House earlier this year aimed at resolving trade disputes. The association said the tariff could make South African sugar 'uncompetitive in the US,' while the industry also faces a surge of cheap, subsidised sugar imports from countries like Brazil, India, and Mexico flooding local ports. "It is important to stress that the South African sugar industry poses no threat to the US market, which relies on sugar from outside the US to meet local demand". Sinyanya said. "The US has, up until recently, had a quota system in place to ensure that the US retains full control over both the volume and price of imported sugar. The 30% tariff will make South African sugar less competitive in the US market when compared to heavily subsidised competitors like Brazil, India and Mexico". Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ The association also warned that this 'double blow' threatens the industry, which supports around one million jobs across the value chain. "South African sugarcane growers cannot compete with these unfairly subsidised imports arriving every day at our ports, particularly as the industry contends. "With a range of other pressures including erratic weather patterns, mill closures, the Health Promotion Levy (sugar tax) and the 30% tariffs that will reduce revenue from the US. For every ton of imported sugar that enters the local market, the industry loses R6000". Meanwhile, the Citrus Growers' Association (CGA) has also previously cautioned that the imposition of US tariffs could result in the loss of more than 35,000 jobs. 'The 30% tariff would wreak havoc on entire communities,' Boitshoko Ntshabele, CEO of the Citrus Growers' Association of Southern Africa, said, according to African Farming. In an interview with the public broadcaster on Wednesday, Ntshabele also revealed ongoing challenges accessing the European Union market due to what the industry calls unjustified trade barriers. 'One of the pressure points we face as an industry has been access to our biggest market, which is the European Union. We face a lot of pressure in terms of what we consider unscientific and unjustified trade barriers with regard to CBS and FCM control. This matter is a subject of dispute between South Africa and the EU at the WTO.' IOL Business Get your news on the go, click here to join the IOL News WhatsApp channel
IOL News
25-06-2025
- Business
- IOL News
Macroeconomic uncertainty drags South Africa's manufacturing sector into deep decline
According to Statistics South Africa (Stats SA) on Tuesday, the decline was broad based and was driven by contractions in nine out of 10 manufacturing divisions. Image: Simphiwe Mbokazi/Independent Newspapers Economists have warned that the ongoing macroeconomic and policy uncertainty will continue to leave operating conditions unfavourable for manufacturing production and drag the sector's contribution to South Africa's economic growth. This comes after manufacturing output fell 6.3% year-on-year in April following a revised 1.2% contraction in March. This was the sixth consecutive monthly contraction and the sharpest drop since March 2024. Maarten Ackerman, chief economist at Citadel, expressed deep concern over the sector's trajectory, emphasising its vital role in job creation and economic stimulation. Manufacturing remains one of the few sectors in the South African economy with significant potential to create jobs, stimulate broader economic growth, and provide opportunities for the unemployed. In 2024, the manufacturing sector contributed 13% to South Africa's gross domestic product (GDP). with the sector's nominal GDP forecast to grow by an average rate of 5.7% per annum over the next decade. This sector also employs over 1.6 million people and is a significant driver of the country's export economy. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. 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Advertisement Next Stay Close ✕ Ad loading South African industries have benefited from high carbon intensity and lower export prices, but the European Union's Carbon Border Adjustment Mechanism (CBAM) and similar policies will erode this advantage, leading to higher costs, lower demand and increased pressure from EU importers for carbon footprint and sustainability compliance. However, Ackerman said the sector continued to grapple with deep-rooted structural challenges. He said these included unreliable electricity and water supply, as well as ongoing issues with the country's logistical infrastructure, particularly the rail network, freight trains, and port systems. 'These constraints are effectively limiting the sector's capacity to expand. While this data reflects monthly high-frequency indicators, it aligns closely with quarterly trends showing that manufacturing is no longer a driver of economic growth, Ackerman said. 'Since the 2008 global financial crisis, the industry has largely failed to contribute positively to South Africa's GDP. In fact, manufacturing output volumes have stagnated, returning to levels last seen in early 2010. Over the past 15 years, the sector has shown no real growth.' Ackerman said this unfortunate trend underscored a broader issue: South Africa's urgent need for fixed investment to tackle these structural barriers. 'Without meaningful and sustained investment, the country will struggle to unlock higher, more inclusive, and sustainable economic growth,' he said. According to Statistics South Africa (Stats SA) on Tuesday, the decline was broad based and was driven by contractions in nine out of 10 manufacturing divisions. Nicolai Klaassen, director of industry statistics at Stats SA, said the food and beverages and metals and machinery divisions were the largest negative contributors to the print. 'Together, the two divisions subtracted 3.2 percentage points from overall manufacturing growth. Four divisions contracted by more than 10%. These were electrical machinery, the automotive division, communication and professional equipment, and the miscellaneous category, furniture and manufacturing not elsewhere classified,' Klaasen said. 'Glass and non-metallic mineral products was the only division that recorded positive growth, expanding by 2.3% year-on-year.' On a month-on-month basis, seasonally adjusted manufacturing production increased by 1.9% in April compared with March, marking a moderately better start to the second quarter of 2025. On a quarterly basis, industrial production contracted by 1.4% in the three months to April. The manufacturing sector's lacklustre outcome is in line with the performance of the ABSA Purchasing Managers Index (PMI). Specifically, the PMI index moved further into contractionary territory in April, with both the business activity and new sales orders' indices declining. Broad-based weakness in manufacturing activity has persisted through the first four months of the year, with output down by 3.4% compared to the same period last year. FNB senior economist Thanda Sithole said the persistent annual decline underscored ongoing unfavourable operating conditions and was consistent with their assessment of downside risks to the near-term economic growth outlook. 'Operating conditions for domestic manufacturers remain unfavourable, as reflected in the continued decline in the manufacturing PMI. While the manufacturing PMI expected business conditions index improved to 62.5 points in May from 48.6 in April, indicating better near-term sentiment, conditions remain fluid amid ongoing macroeconomic and policy uncertainty,' Sithole said. 'Domestic demand, particularly private sector fixed investment, remains weak, and external economic conditions are not conducive to growth in manufacturing merchandise exports.' BUSINESS REPORT
IOL News
24-06-2025
- Business
- IOL News
How economic stagnation is impacting property transactions in Johannesburg
The Johannesburg region continues to see a surge in population as many people search of better economic opportunities. Image: Simphiwe Mbokazi / Independent Newspapers Property transactions in Johannesburg depict years of low economic growth, with Lightstone data showing that the city's property transactions are down by over 30% in some areas. It has lost significant property value over the last few years, with negative property value growth of 1.3%, the weakest of the metros, and notably below Cape Town's 6% growth, says Samuel Seeff, chairman of the Seeff Property Group. He said the average property price has remained static at around R1.3 million. Despite this, he said the Gauteng metros present unparalleled value for property buyers and investors right now. 'Buyers should use the interest rate savings and opportunity to invest at the current historically low prices,' Seeff said. 'You can find unbelievable value, even in the luxury areas where you can find mansions for under R10 million to R15 million. While the market is picking up, it remains sluggish, largely due to poor infrastructure maintenance and management, but this will not always be the case,' he added. The property group said that despite its current challenges, Johannesburg possesses enormous untapped potential. It said this is the country's most populous metro with the highest urbanisation rate, as people continue to flock to Gauteng in search of economic opportunities. This constant influx creates a robust demand for accommodation, including rentals, presenting lucrative opportunities for investors, with many areas offering above-average rental yields that often surpass those found in Cape Town, it said. Seeff said the problems of Johannesburg and the Gauteng metros are man-made and they demand man-made solutions. The chairman said it is vital for South Africa's economic resurgence that these issues are decisively addressed and resolved, especially with significant international gatherings like the G20 on the horizon. Beyond that, Seeff says residents and ratepayers need to get involved instead of waiting for someone else to solve the problems. Earlier this year, Neil Gopal, CEO of the South African Property Owners Association(SAPOA), told Independent Media Property that one of the biggest risks currently facing Gauteng is the water crisis and the near collapse of the City of Johannesburg. He said the continued degradation of infrastructure is a major concern amongst investors and citizens. The organisation that represents the commercial and industrial real estate sector in South Africa appealed to the government to resolve the devastation of infrastructure at the local government level and intervene where necessary to financially stabilise dysfunctional municipalities. Seeff said the star power of Joburg is undeniable since it is the financial and economic heart and engine of South Africa, and the wealthiest city on the continent. He said it is home to the JSE (Johannesburg Stock Exchange), the largest and most sophisticated stock market in Africa, and home to major banks and financial head offices, legal firms, and consultancies. It is the preferred headquarters for the vast majority of leading corporations, with over 70% of the country's companies based there, he said. The company added that the city's economic output is staggering, contributing almost 16% to South Africa's total GDP and a remarkable 40% to the economy of Gauteng, the wealthiest province. It also added that it is also home to the largest concentration of wealth, with nearly 15 000 dollar-millionaires in Johannesburg/Pretoria (according to New World Wealth). Captains of industry, business entrepreneurs and those who drive much of the South African economy are said to be based here. Seeff said that the property market should be pumping; instead, it is lagging at the bottom of the cycle, offering exceptional value for money, which may not be repeated down the line. Right now, the cost to build is significantly higher than what you can buy for, and buyers and investors should take advantage, he says. The reality is that Joburg is going nowhere, it will continue expanding, and there are tremendous opportunities to capitalise on, he says further. 'Beyond its economic might, it is a great place to live, and one of the greenest metros with great weather, and a vibrant cosmopolitan lifestyle. It has some of the best schools and tertiary institutions on the continent.' He said the amenities are top class despite the deteriorating infrastructure, but even on this point, he believes this needs to be addressed as a matter of urgency.
