New car sales fell 6.1 percent in July compared to July last year in the biggest year-on-year drop so far this year.]]> |||
Pretoria – New car sales fell 6.1 percent in July compared to July last year in the biggest year-on-year drop so far this year, recorded for both passenger vehicles and heavy trucks, suggesting a slowdown in both consumer spending and infrastructure investment spending.
The figures were released by The National Association of Automobile Manufacturers of Southern Africa (NAAMSA), citing data from the department of trade and industry website.
“The slowing new car market was despite attractive incentive packages on offer by most automotive companies. Intense competition in an increasingly difficult trading environment continued to put pressure on margins throughout the automotive value chain,” NAAMSA said in its statement.
Passenger vehicles sales showed the biggest decline of 8.8 percent, down 3509 units to 36 506.
“In line with our expectations for 2015, passenger vehicle sales continue to be under pressure, with a decrease of 8.8 percent compared to the same period last year. We anticipate further pressure for the remainder of the year given the recent interest rate hikes, inflationary pressures and general pressure on consumer affordability,” the head of Standard Bank Vehicle and Asset finance said in a statement following the release of the figures.
Sales of medium commercial vehicles were down by 1.6 percent while sales of heavy duty trucks fell by 112 or 6.3 percent to 1675 units.
New vehicle sales are an indicator of both business and consumer confidence, both currently running at multi year lows and the latest numbers will have done little to lift the gloom.
As has been the case so far this year, exports continued to power ahead and lift the gloom. In July, exports were up by 24 percent or 5 555 units to 28 291 units.
NAAMSA said exports were on track to record a 20 percent growth this year and produce a record 330 000 units for various markets around the world.
Sales of light commercial vehicles, bakkies and mini buses were up by 0.7 percent to just over 15 000 units.
Mozambique is expected to add dollar millionaires at the fastest rate in Africa over the next decade.]]> |||
Johannesburg - Mozambique is expected to add dollar millionaires at the fastest rate in Africa over the next decade followed by Ivory Coast and Zambia as a mix of construction, financial services and property developments boost the ranks of the rich on the world’s poorest continent.
The number of people with net assets, excluding their primary residence, of more than $1 million will surge 120 percent in Mozambique by 2024 to 2 200, Johannesburg-based research company New World Wealth predicted.
The number of millionaires in Ivory Coast will jump 109 percent to 4 800 while those in Zambia will double, the company forecast.
“High net worth individual numbers are expected to rise by 45 percent over the next 10 years, reaching approximately 234 000,” New World said in the report given to Bloomberg.
Mozambique’s economy is being boosted by the biggest natural gas find in the world in the last decade, Ivory Coast is recovering from a civil war and Zambia’s rich are expected to benefit from real estate development.
The countries will take over from oil producers Angola and Ghana, where the number of millionaires rose more than fivefold between 2000 and 2014, according to New World.
Over that period the number of millionaires in Africa rose 145 percent compared with a global average of 73 percent.
While South Africa, with 46 800 millionaires, and Egypt, with 20 200, remain Africa’s biggest wealth centres, growth in the numbers of the rich have been held back by emigration from a stuttering economy in South Africa and instability in Egypt.
Still, South Africa is expected to remain home to most of the continent’s wealthy, with their numbers rising 40 percent in the next decade to 65 700.
About $120 billion in African wealth is overseen by asset management companies with Investec holding the biggest market share followed by Rand Merchant Bank and UBS, New World said.
The African private banking market is forecast by the research company to grow 8 percent per annum over the next decade.
Eskom will implement Stage two loadshedding from 5pm on Monday and this was expected to last until 10pm.]]> |||
Johannesburg - Eskom has announced that it would be implementing stage two loadshedding from 5pm on Monday and said this was expected to last until 10pm.
“Eskom would like to assure customers that loadshedding is implemented as a necessary measure to protect the power system and to ensure that maintenance is carried out in order to guarantee that our supply of electricity can be maintained in the long term.”
Eskom said that any unexpected changes on the vulnerable and constrained power system could lead to a change in the load shedding stage at short notice.
US consumer spending in June advanced at its slowest pace in fourth months as demand for automobiles softened.]]> |||
Washington - US consumer spending in June advanced at its slowest pace in fourth months as demand for automobiles softened, suggesting the economy lost some momentum at the end of the second quarter.
But the moderation in consumer spending could be temporary as Fiat Chrysler Automobiles and Nissan Motor Co Ltd said on Monday their US July sales outstripped expectations on the strength of sport utility vehicles sales.
Consumer spending rose 0.2 percent after a downwardly revised 0.7 percent increase in May, the Commerce Department said. Consumer spending, which accounts for more than two-thirds of US economic activity, was previously reported to have advanced 0.9 percent in May.
June's increase was in line with economists' expectations and the data was included in last week's second-quarter gross domestic product report, which showed consumer spending expanding at a 2.9 percent annual rate and the overall economy growing at a 2.3 percent pace.
While the tepid consumer spending suggests less vigor in the economy heading into the third quarter, any slowdown is likely to be mitigated by a strengthening housing sector and tightening labor market, which are boosting household wealth.
FCA and Nissan were the first major automakers to report US July sales, which analysts have forecast rising about 3 percent from a year ago. FCA forecast sales will come in above that estimate.
Prices for longer-dated US government debt slipped after the data, while US stock index futures nudged lower. The dollar was slightly stronger against a basket of currencies.
The Federal Reserve last week described the economy as expanding “moderately,” upgraded its view of the labor market and said housing had shown “additional” improvement.
The Fed's assessment left the door open for a possible interest rate hike in September, which would be the first increase in nearly a decade.
In June, spending on long-lasting manufactured goods fell 1.3 percent, with purchases of motor vehicles accounting for most of the decrease, which reversed May's increase. Outlays on services like utilities rose 0.4 percent.
When adjusted for inflation, consumer spending was unchanged after increasing 0.4 percent in May.
Personal income rose 0.4 percent in June for a third straight month. With income gains outpacing spending, the saving rate increased to 4.8 percent from 4.6 percent in May.
Inflation pressures remained benign. A price index for consumer spending rose 0.2 percent after gaining 0.3 percent in May. In the 12 months through June, the personal consumption expenditures (PCE) price index rose 0.3 percent.
Excluding food and energy, prices edged up 0.1 percent for the third straight month. The so-called core PCE price index rose 1.3 percent in the 12 months through June. It has increased by the same margin every month since January.
Inflation is running below the Fed's 2 percent target.
Johannesburg - Some members of South Africa's National Union of Mineworkers (NUM) rejected a pay hike of up to 17 percent by gold producers, a union source said on Monday, raising the threat of a sector-wide fallout after another union spurned the same offer.]]> |||
Johannesburg - Some members of South Africa's National Union of Mineworkers (NUM) rejected a pay hike of up to 17 percent by gold producers, a union source said on Monday, raising the threat of a sector-wide fallout after another union spurned the same offer.
Some members of NUM, the biggest union in the gold sector by membership, rejected the pay offer saying it was a cash allowance that could fall off after the period of the agreement lapses, the source told Reuters.
The NUM will meet with more of their members at two more meetings this week before officially meeting with the companies, represented by the Chamber of Mines, on Friday, the source said.
The gold companies, battling soft prices and escalating costs, made what they termed a “final offer” last week saying they could not afford to be squeezed any further by a rising wage bill.
The offer was also rejected by NUM arch rival the Association of Mineworkers and Construction Union on Sunday, whose members said it was too low.
AngloGold Ashanti and Sibanye Gold offered an additional R1 000 ($78) a month to entry-level workers, an increase of 17.5 percent while Harmony Gold offered a R500 per month hike.
But that was purely cash and other company benefits related to the basic wage would not be topped up, the firms said.
The source said members of NUM were “angry” about the Harmony's lower offer, a sentiment echoed by an AMCU spokesman on Sunday about his union's members.
Greece's stock market plunges more than 18%, but some listings were attracting buyers at lower levels.]]> |||
Athens - Although Greece's stock market had plunged more than 18 percent by mid-session on Monday, some listings were attracting buyers at lower levels, suffering smaller losses than banks and the broader market.
Unlike the index heavyweight banks, which fell to the daily volatility limit of 30 percent, shares of OTE Telecom , Aegean Airlines and refiner Motor Oil were outperforming the benchmark index with losses of between 11 to 17 percent.
“The market's dislocation can offer worthwhile buying opportunities on quality names,” said analyst Nick Koskoletos at Athens-based Eurobank Equities. “We are seeing some early signs of buying on such listings.”
On the gainers side, there was only one listing - Kordellou a processor of iron and sheet steel products - which was up 4.7 percent. But only 10 shares in it had changed hands.
Jewellery retailer Folli Follie, which has a store network outside Greece, and metals group Mytilineos, an exporter of aluminium, were also trimming initial losses.
“Non-financial companies will have a better performance than banks since their prospects are brighter and are less exposed to the domestic market,” said Manos Chatzidakis, an analyst at Beta Securities.
OTE has secured debt financing up to 2018, while Mytilineos has about two thirds of its revenues coming from exports and a strong cash position. Folli's generates most of its operating profit abroad.
“They can continue operating seamlessly despite the capital controls,” Chatzidakis said.
Economic headwinds facing Chinese manufacturers intensified last month, while euro zone factories shrugged off Greece's crisis.]]> |||
London/ Sydney - Economic headwinds facing Chinese manufacturers intensified last month, with conditions deteriorating to their weakest level in two years, while euro zone factories largely shrugged off Greece's brush with bankruptcy.
July was a fraught month for the global economy, with Athens and its creditors taking debt talks to the brink, while Chinese ructions triggered slides in commodity prices - hitting countries reliant on demand from the world's second-biggest economy.
China's factory activity shrank more than initially estimated in July as new orders fell, dashing hopes the economy may be steadying, a private survey showed on Monday.
The final Caixin/Markit China Manufacturing PMI came in at 47.8 in July, from 49.4 in June. A similar official survey at the weekend was also weaker than expected, suggesting growth had stalled.
Both indicators signalled a slowdown in factory activity at a time when Beijing has been intervening heavily to prevent a full-blown crash in the country's stock markets.
“They are distorted numbers due to the stock market panic. If that's the case, it's a transitory dip and given the amount of stimulus that has been put in place, we should expect a bounce back in the August numbers,” said ING economist Tim Condon.
“But the economy can hardly afford much of a headwind, so probably it brings forward the timing of when people expect the next [policy] move from the authorities.”
China's central bank has already cut interest rates four times since November and repeatedly loosened restrictions on bank lending in its most aggressive stimulus campaign since the global financial crisis.
But a senior Chinese central bank official predicted downward pressure on the economy will persist in the second half of the year, saying growth in infrastructure spending and exports were unlikely to pick up.
Similar business activity surveys for Taiwan, South Korea and Indonesia - all heavily reliant on Chinese demand - reflected varying degrees of weakness that is clouding hopes for a convincing global recovery in the second half of the year.
The frosty state of China saw South Korean exports fall for a seventh month in July, while economic growth in Taiwan cooled to its slowest in three years in the second quarter.
“In terms of external demand, loose monetary conditions and lower energy prices should support a pick-up in global activity in the coming quarters,” Krystal Tan, Asian economist at Capital Economics wrote in a report.
“However, the pace of recovery is likely to be gradual, suggesting a strong rebound in Asia's export performance is still some way away.”
Providing a bit of relief, manufacturing activity in Japan and India both picked up in July thanks to new orders, though analysts questioned if the momentum can be sustained.
Later on Monday a PMI for the United States will give more clues as to whether the world's biggest economy has healed enough to withstand its first expected increase in interest rates since 2006.
Positive signs in Europe
There were positive signs for activity in Europe, however, which European Central Bank policymakers are likely to welcome. The Netherlands, Spain and Italy all grew at a decent pace, with the latter at its fastest in over four years.
French factories slipped back into contraction, though, while those in Germany registered only modest growth.
“It's not a bad thing to happen - a bit of rebalancing away from the core into the periphery,” said Alan Clarke at Scotiabank. “It's doing OK, it should be doing better but there's scope that it will come.”
Perhaps unsurprisingly, Greece's survey signalled the steepest downturn in its 16-year history as its banks were shut for most of the month.
Markit's final Eurozone Manufacturing Purchasing Managers' Index was 52.4, comfortably above the 50 level that separates growth from contraction. It beat a preliminary estimate of 52.2 but was just shy of June's 52.5.
British manufacturing growth picked up in July but new orders grew at the slowest pace in nearly a year, suggesting manufacturers would continue to drag on growth.
The Markit/CIPS PMI rose more than forecast to 51.9. That was up from 51.4 in June - its lowest in over two years - but well below an average of 54.3 recorded since April 2013, when Britain's economy was starting its recovery.
With emerging economies on track to post their smallest share of global growth in years the hope is for continued recovery in the US and Britain, but mixed data in recent weeks has added to doubts about whether they are on a sounder and sustainable footing.
TAG Heuer is shutting a store in Hong Kong as high rental costs and declining numbers of customers weigh on profitability.]]> |||
Hong Kong - Swiss watchmaker TAG Heuer is shutting a store in Hong Kong as high rental costs and declining numbers of customers weigh on profitability, according to the head of LVMH Moet Hennessy Louis Vuitton SE’s watchmaking activities.
The brand has decided to close a store on Russell Street, one of the island city’s main shopping thoroughfares, Jean-Claude Biver said Monday.
“Traffic has diminished and rents have stayed high,” he said by e-mail.
European luxury-goods makers have recently spoken out about the high rental costs in Hong Kong, with Gucci owner Kering saying it may close some of its shops and Burberry Group trying to lower its rent bill.
Luxury spending in Hong Kong has been suffering since China began taking measures against extravagance among government officials in 2012.
Still, Hublot and Zenith may open two stores in Hong Kong next year as demand for those LVMH watch brands warrants expansion, Biver said. Those watchmakers currently have two stores each in Hong Kong.
“In total we foresee one or two openings for Hublot in the coming 24 months, and one, eventually two, for Zenith,” Biver said.
Emerging-market stocks from China to Russia fell as data signaled the slowdown in the two economies is deepening.]]> |||
London - Emerging-market stocks from China to Russia fell as data signaled the slowdown in the two economies is deepening, while Greek equities slumped as they resumed trading. The ruble led declines in currencies as oil slid.
The MSCI Emerging Markets Index dropped 1.2 percent to 891.34 by 11.50 am in London, extending the biggest monthly slide since September. The dollar-denominated RTS Index retreated 2.7 percent in Moscow and the ruble slumped to the lowest level since March as Brent crude extended July’s 18 percent decline. PetroChina led losses among energy companies as Chinese factory data missed forecasts. Stocks tumbled 17 percent in Athens.
Russian stock, bond and currency markets were the biggest decliners among developing nations today as manufacturing in the world’s largest energy exporter unexpectedly deteriorated in July. The final reading on a private Chinese factory index on Monday shrank more than expected, while an official gauge on Saturday slid to a five-month low, stoking concern over how the worsening slowdown will affect global trade.
“A lower oil price is just one symptom of global overcapacity,” according to Daniel Salter, the head of equity strategy at Renaissance Capital in London, who recommends investing in countries that are pursuing government policy changes such as Pakistan, Egypt and Romania.
Since emerging markets benefit from investment in industrial capacity and commodities, “if it takes longer for global capacity constraints to be reached, there’s certainly an argument that the emerging-markets story gets pushed out,” he said.
Oil, which entered a bear market in July, retreated on Monday as Iran vowed to boost production immediately after sanctions.
Outflows from the developing world have been picking up pace. US exchange-traded funds that invest in emerging markets faced $4 billion of net outflows in July, the most since January 2014.
Money leaving eight emerging nations including Indonesia, Thailand and South Africa reached more than $2.5 billion over the past week amid a slump in global commodity prices and concerns about tighter monetary policy by the Federal Reserve, according to a report from Capital Economics.
As equity indexes from Shanghai to Turkey declined at least 1.1 percent on Monday, 14 of 24 developing-country currencies depreciated against the dollar. A gauge tracking 20 of the exchange rates weakened for a third day to a record low.
The ruble declined 1.3 percent to 62.514 per dollar, after sliding 3.2 percent on Friday following a central bank decision to cut interest rates by 50 basis points to 11 percent. While they got a small boost that day, government bonds resumed declines on Monday, sending yields up nine basis points to 10.99 percent today.
Russian policy makers are trying to support an economy that’s facing its steepest slowdown since 2009. The nation’s purchasing managers’ index fell to 48.3 from 48.7 in June, remaining below the 50 threshold that separates contraction from growth, Markit Economics said Monday.
The Shanghai Composite sank to a three-week low as the Chinese Caixin final manufacturing purchasing managers’ index slipped to 47.8 in July, the lowest since July 2013. Malaysia’s ringgit fell to a 16-year low as data pointed to a contraction in the country’s factory output.
Turkish 10-year bonds declined, sending yields up seven basis points to 9.63 percent, while the lira lost 0.2 percent to 2.7776 per dollar. President Recep Tayyip Erdogan is standing in the way of the formation of coalition government, main opposition CHP leader Kemal Kilicdaroglu said before the last round of scheduled talks with the ruling AK Party on Monday, according to state-run news agency Anadolu.
In Asia, technology shares retreated, dragging an emerging-market gauge of the industry to a 16-month low. MediaTek losing 9.9 percent in Taipei after the chip designer forecast sales that trailed estimates.
Athens stock market reopens, Greek manufacturing PMI devastated, HSBC profits jump.]]> |||
New York - Athens stock market reopens, Greek manufacturing PMI devastated, HSBC profits jump. Here are some of the things people in markets are talking about today.
Athens stock exchange reopens
Following a shutdown that lasted five weeks, the Athens Stock Exchange reopened this morning. The ASE index was down a record 22 percent at the start of trading, with Greek bank shares falling as much as 30 percent.
Trading on the index is still restricted for Greeks due to continuing capital controls in the country.
The stand-out number in this morning's round of Purchasing Managers' Index releases came from Greece, where PMI fell to an astonishingly low 30.2 according to data from Markit Economics.
The company said survey respondents blamed a “generally uncertain operating environment” and capital controls for the collapse.
Seperately, China's official PMI came in at 50 for July, a reading that indicates neither expansion or contraction.
HSBC Holdings, Europe's largest bank, reported first- half pretax profit of $13.6 billion in a statement on Monday.
The bank said a 19 percent jump in Asian earnings was the main driver of the earnings beat, giving a boost to CEO Stuart Gulliver's strategy of shifting investment to the east.
Iran ready to pump
Iran can increase production by 500 000 barrels per day within one week of the end of sanctions, and by a million barrels per day within a month, Oil Minister Bijan Namdar Zanganeh has said according to reports on state media.
Brent for September settlement dropped as much as $1.36 to $50.85 a barrel on the London-based ICE Futures Europe Exchange this morning.
Obama on climate
US President Barack Obama is set to unveil new limits on planet-warming carbon emissions and more incentives for renewable energy later today at the White House.
The rules, dubbed the Clean Power Plan have the enthusiastic backing of green-energy companies. Coal companies have vowed to kill the plan.