Government is in the process of launching a fund to support the informal business sector, the presidency says.]]> |||
Johannesburg - Government was in the process of launching a fund to support the informal business sector, the presidency said on Friday.
“To address skewed spatial development, a government fund is being launched to support informal sector enterprises, especially in the townships,” the presidency said in a statement.
“It was agreed (at the Presidential Business Working Group meeting) that municipalities that needed support would be identified for which anchor companies could be identified.”
On Friday, President Jacob Zuma hosted a presidential business working group, comprising the business sector and government, to assess the status of economic development and job creation.
Zuma first convened the meeting between government and business in February 2013 to promote collaboration towards implementing an inclusive growth strategy to support the National Development Plan, the presidency said.
“The meeting followed President Zuma's undertaking, in his June 2014 State of the Nation Address, that government would work with the private sector to remove obstacles to investment, promote inclusive growth and build a more prosperous society.”
The meeting on Friday assessed progress and implementation action plans in areas including education and skills development, infrastructure, labour regulatory environment, regulatory impact on investment, and economic growth.
Government involvement in industrial relations operational matters is undesirable, Labour Minister Mildred Oliphant said.]]> |||
Johannesburg - Government involvement in industrial relations operational matters is undesirable, Labour Minister Mildred Oliphant said on Friday.
Speaking at the KwaZulu-Natal economic summit, she said this was for the reason that the government has created institutions for this purpose.
“The unwarranted intervention by government carries the real danger of undermining the very institutions it created in the first place.”
She said using the National Economic Development and Labour Council (Nedlac) platform to engage on policy matters and other pressing socio-economic problems, was necessary.
“Nedlac remains one of the platforms through which government, labour, business and community organisations seek to co-operate, through problem-solving and negotiation, on economic, labour and development issues, and related challenges facing the country.”
She said the institutionalised social dialogue under the auspices of Nedlac remained an important and indispensable tool for transparency and participation in policy formulation.
Nedlac was launched in 1995. It aims to allow inclusive and transparent decision-making about labour issues.
She said Nedlac remained a contested terrain and it would be expected that from time to time that there would be tensions.
“Whilst some of the high expectations and enthusiasm that surrounded the launch of Nedlac on February 18, 1995, have not been met, its achievements to date have been encouraging, albeit with some setbacks.”
Oliphant said it was disappointing that workers downed tools even when the gap between their demand and the employer offer was small.
“I have observed with a degree of disappointment that in most strikes around collective bargaining issues, workers down tools when the gap between what the employers are offering and their demand is so minute that going on strike for weeks on end does not make social and economic sense,” she said.
“Imagine workers going out on strike because the employer is offering eight percent but, are quite happy to come back after two weeks of strike shouting victory when the employer improves the offer by a meagre .05 percent.”
South Africa's rand hovered near the previous day's five-week highs against the US dollar.]]> |||
Johannesburg - South Africa's rand hovered near the previous day's five-week highs against the dollar on Friday, still anchored by a well-received medium term budget statement mid-week, in the absence of more immediate drivers.
Despite announcing a slightly wider budget deficit forecast for 2014/15, Finance Minister Nhlanhla Nene bolstered investor confidence in the currency and local bonds on Wednesday by vowing to clamp down on spending.
Analysts lauded his statement on the whole, saying it would go a long way to lessen the chances of more credit downgrades for Africa's most advanced economy.
The rand traded at 10.9300 to the dollar at 17:45 SA time, up 0.4 percent from Thursday's close.
It was within a whisker of Thursday's high of 10.9235, the currency's strongest level since Sept 17.
The rand was however caught in a narrow range for much of Friday's session, reflecting a dearth of market moving news and data on the day.
“We've had a very quiet day and that goes for just about all the forex markets,” RMB trader Jim Bryson said.
“There's a lack of drivers, no real news.”
The rand was still among the strongest performers in a basket of 20 emerging currencies tracked by Reuters, surpassed only by Brazil's real, the Polish zloty and Latvia's lats.
The debt market was also sluggish, with the yield for the 2026 secondary market benchmark dipping just half a basis point to 7.91 percent. - Reuters]]>
South African stocks fell for a third straight session, with iron ore producer Assore down sharply.]]> |||
Johannesburg - South African stocks fell for a third straight session on Friday, with iron ore producer Assore down sharply as the commodity's price was on track for its first weekly drop in a month due to Chinese steel mills keeping stockpiles low.
Assore was the biggest decliner among blue chips, shedding 4.4 percent to 210.32 rand and taking its losses for the year to 38 percent amid concerns about cooling demand in China, the world's top consumer of the key steel-making ingredient.
Kumba Iron Ore lost 0.94 percent to 279.50 rand.
Iron ore has recovered from a five-year low of $77.50 (R850) at the end of September, but has struggled to sustain gains in the face of a supply glut.
More generally for South African equities, uncertainty is setting in after Finance Minister Nhlanhla Nene signaled in the Treasury's medium-term budget outlook that a tax shake-up was looming.
“We don't see changes to the tax system in South Africa very often and so this creates uncertainty,” said Christie Viljoen of NKC Independent Economists.
“It could be higher VAT which will hurt consumers, or it could be a higher corporate tax which will hit all of the listed companies as there will be less money for profits and dividends,” he said.
Viljoen also noted that South African companies were working on budgets for the next financial year amid uncertainty over what impact taxes might have.
The benchmark Top-40 index shed 0.57 percent to 42,676.13 while the broader All-share index ended 0.47 percent lower at 47,879.45. - Reuters]]>
France and Italy renewed their commitment to reform their economies.]]> |||
Brussels - France and Italy renewed their commitment to reform their economies on Friday in the hope of winning more time to bring their public finances in order but the ECB's president warned more needed to be done to avoid “a relapse into recession”.
After the bloc's revival came to a halt in the second quarter, France and Italy want to shift course away from the spending cuts that marked the bloc's response to the 2009-2012 crisis.
Germany says debt discipline must continue.
Seated around a large oval table in the EU summit's red marble building, European Central Bank President Mario Draghi told euro zone leaders over lunch that more needed to be done.
“We avoided the collapse of the euro with a joint effort. Now our focus should be to act jointly again to avoid a relapse into a recession,” Draghi said, according to his spokesman, who quoted from his speech.
“Hope is not a strategy.”
He said a coherent strategy for economic growth had to involve “concrete and credible” structural reforms.
Laying out a four-pronged strategy, Draghi emphasised that monetary policy was only one part of an economic revival plan, with the others being reforms, sound public finances and healing the bloc's sick banks.
But despite Draghi's firm words, the summit underscored how the euro zone has few quick fixes for near record unemployment, leaving it in search of billions of euros for spending that Berlin wants to see come from the private sector.
Merkel said no country with a national debt greater than its economic output should be borrowing more, diplomats said.
According to people in the room, Merkel said record low interest rates gave the euro zone “room to breathe” and that a mix of private investment, fiscal discipline and openness to fast-growing Asian economies was the way forward.
Merkel also said a proposed free-trade deal with the United States, which is increasingly unpopular in Europe, was crucial.
But such measures could take years to bear fruit, while the euro zone's poor performance is becoming a wider concern, with the United States and the International Monetary Fund worrying that the bloc that makes up a fifth of the world economy is a drag on global prosperity.
The debate is complicated by EU rules that seek to keep country's public finances in order and Germany's promise to balance its books next year for the first time since 1969.
The European Union's top economic official renewed calls on Berlin to act, saying that without investment the future was bleak for Europe's biggest economy, even if it is stronger than most.
“All euro area countries have shortages in potential growth, including Germany,” said Jyrki Katainen, the European Commissioner who will become the bloc's growth tsar from November, tasked with bringing down near record unemployment and raising investment.
“Germany's potential growth is currently 1.5 (percent). This is far too low,” he told reporters.
Diplomats say the euro zone may be moving towards a bargain where France and Italy, the second and third biggest euro zone economies, make new commitments to reform in return for more spending room in their budgets.
At the summit, French President Francois Hollande said Europe should not give the impression that there were “good and bad students” and promised in principle to meet EU budget rules, diplomats said.
Italian Prime Minister Matteo Renzi is proposing tax cuts to get households spending again, as his country is suffering its third recession since 2008.
But Dutch Premier Mark Rutte, a Merkel ally, said no investors will put their money into the euro zone if public finances are out of control, warning against the risk of what he described as “rapid death” for the currency area.
Jeroen Dijsselbloem, the Dutch finance minister who chairs the meetings of euro zone finance ministers, said structural economic reforms were key.
“Paris and in Rome are quite ambitious in terms of reforms and modernising their societies, the government and the economy,” Dijsselbloem said. “I think that's crucial.”
The European Commission, which acts as a budget policeman, has until next Wednesday to reject any 2015 budgets with France's in the spotlight after it said it would fail to meet EU debt limits until 2017.
Any changes made by Paris and Rome are likely to be small, officials say.
“We need to look at each case separately, keeping in view the Stability and Growth Pact rules and the need to maintain a responsible fiscal policy,” said Lithuanian President Dalia Grybauskaite, whose country joins the euro zone next year.
“Austerity needs to be in place, and in parallel we need to invest,” she said.
Such declarations on budget discipline could provide cover for the ECB to do more to fend off the deflation that would make it even harder for the euro zone to bring down its debts.
Many investors want to see the ECB launch a US-style quantitative easing programme that could act as a proxy for government stimulus. But Draghi faces stiff resistance, notably from Germany. - Reuters]]>
Procter & Gamble plans to remove its batteries and make Duracell a stand-alone company.]]> |||
New York - Procter & Gamble plans to remove its batteries and make Duracell a stand-alone company.
The world's largest consumer products maker, which acquired Duracell in 2005, has been trimming its product lineup to focus on its top performers.
After it finishes jettisoning more than half its brands around the globe over the next year or two, P&G said it will be left with about 70 to 80 brands.
If a split-off of Duracell occurs, P&G said its shareholders would have the option of exchanging some, none or all of their P&G shares for shares of the new Duracell company.
Jon Moeller, the company's chief financial officer, said during a call with reporters that Duracell is an “attractive” business that generates about $2 billion (R22 billion) a year in sales.
But he said P&G wants to focus on products that are “even more attractive.”
P&G also makes Tide detergent, Pampers diapers and Olay skin care.
The Procter & Gamble, based in Cincinnati, said Friday it prefers a spinoff of Duracell, but that it's considering a sale or other options for Duracell.
The decision to sell or discontinue 90 to 100 brands - many of them smaller, regional products - comes as Procter & Gamble fights to boost sluggish sales.
In the latest quarter, for instance, the company said sales volume declined in its beauty, hair and personal care unit.
Volume also fell in its grooming unit, with blades and razors declining in developed markets.
Under pressure to boost its performance, the company brought back A.G. Lafley as its chief executive last year.
Lafley has said the company's expansive portfolio is the result of a natural evolution of multinational companies, which have a tendency to create or acquire brands over time.
But P&G had already been trying to slim down in recent years, including the sale of food brands including Jif peanut butter, Folgers coffee and Pringles chips.
Looking ahead, P&G said it now expects sales in 2015 to be flat to up to low-single digits.
It previously forecast growth in the low single digits.
It stood by its guidance for core earnings per share to grow in the mid-single-digit range.
For the quarter ended September 30, it earned $1.99 billion, or 69 cents per share.
Not including one-time items, it earned $1.07 per share.
That matched the consensus of analysts surveyed by FactSet.
Revenue slipped to $20.79 billion.
Analysts polled by FactSet expected $20.76 billion.
Shares of P&G climbed $1.52, or 1.8 percent, to $84.75 in premarket trading about 90 minutes ahead of the market open. - Sapa-AP]]>
German consumer confidence is set to hold steady in November after two months of decline, a survey released on Friday.]]> |||
Berlin - German consumer confidence is set to hold steady in November after two months of decline, a survey released on Friday showed.
The Nuremberg-based GfK research group provisionally pegged its closely watched index at 8.5 for next month, slightly above 8.4
this month in Europe's biggest economy.
Analysts surveyed by dpa-AFX had been expecting consumer confidence next month to decline to 8.0 as fears mounted that the eurozone would slip back into recession, Ebola would spread further outside West Africa and bad news would continue to roll in from Ukraine and other hot spots.
While German business has been troubled by the unsolved crises and the poor state of the global economy, shoppers appear to have stopped paying so much attention, GfK economist Rolf Buerkl noted.
“Consumers surprise us sometimes,” he said.
“There aren't any rules of nature about how consumers are going to react.”
Income expectations and willingness to buy among the German public have improved, GfK's survey of consumers showed.
In a sign that big-ticket items are a tough sell right now, another survey showed deep discounts spreading at German car dealerships.
“Measured by advertisements by online brokers, discounts offered by car dealers to retail buyers for the 30 most-sold models are the steepest since the beginning of our data in January 2010,” the CAR Institute at Duisburg-Essen University said.
The average of such discounts below list price grew 2.7 percentage points month-on-month to 20.7 per cent.
Often, models were available for 25 per cent less with the blessing of manufacturers.
There have been hints of a steadying of nerves in German industry, with the widely watched index of expectations of German businesses' purchasing managers rising marginally in September, climbing 0.2 points to 54.3.
By contrast, even the German government has downgraded its growth predictions for the country in recent weeks, forecasting that gross domestic product (GDP) will only increase by 1.3 per cent this year and 1.2 per cent next year.
The figures for both had been set at just under 2 per cent earlier in the year. - Sapa-dpa]]>
Shares Amazon plunged after the US online giant reported a greater-than-expected loss in the past quarter and a disappointing outlook.]]> |||
New York - Shares Amazon plunged in early trade Friday after the US online giant reported a greater-than-expected loss in the past quarter and a disappointing outlook.
The shares tumbled 7.7 percent to $288.98 (R289) in the first 30 minutes of trade.
Amazon said Thursday its loss in the last quarter widened to $437 million after a series of product launches including new phones, tablets and television programs.
The news from online retail giant, which is known for prioritizing investment over profits, nonetheless stunned many investors and analysts.
“We see further downside risk to the stock,” said Barclays analyst Paul Vogel.
Vogel said Amazon's aggressive spending and soft growth outlook “may be too much for everyone but the most patient of investors.”
Jon Ogg at the finance blog 24/7 Wall Street said the results suggest that Amazon chief Jeff Bezos “wants to continue running a quasi non-profit rather than a business that makes money off of its millions of customers.”
The loss in the third quarter was worse than anticipated, and far worse than the $41 million deficit in the same period a year earlier.
The loss came even as net sales increased 20 percent from a year ago to $20.58 billion in the quarter.
Amazon in June announced the launch of its “Fire” smartphone, upgraded its line of Kindle tablet computers and introduced a streaming media player.
The company bolstered its online content with new original programs and ordered a second season of its dark comedy “Transparent,” a move that boosts its challenge to video rivals such as Netflix.
The Seattle-based company bolstered its online gaming presence with a $970-million acquisition of the game platform Twitch, and expanded its “Amazon Fresh” grocery delivery service.
While some Amazon products and services have been popular, its smartphone market share has been “effectively zero,” according to the Consumer Intelligence Research Partners consultancy.
Yet some analysts say the company is on the right track with Amazon Prime, a subscription service which gives customers free shipping, and access to music, videos and other online content.
“Amazon remains a very aggressive investor,” said Mark Mahaney at RBC Capital Markets.
Mahaney added because of Amazon's marketing acumen and “excellent innovation track record” and suggested that its investments will pay off in the long run.
“We'll be patient,” he said in a note to clients. - Sapa-AFP]]>
US stocks were little changed, as disappointing earnings from Amazon were offset by gains in Microsoft after its quarterly results.]]> |||
New York - US stocks were little changed on Friday, as disappointing earnings from Amazon were offset by gains in Microsoft after its quarterly results.
Amazon plunged 7.3 percent to $290.45 as the biggest drag on both the S&P 500 and Nasdaq 100 after the online retailer's sales projections for the crucial holiday quarter disappointed Wall Street and third-quarter results missed forecasts.
But Microsoft, up 1.3 percent at $45.63 (R501) , helped offset the drop in Amazon after it reported higher-than-expected quarterly revenue while keeping its profit margins largely intact.
Procter & Gamble gained 2.9 percent to $85.67 to also help boost the Dow and S&P 500 after the world's largest household products maker posted quarterly results and said it would split its Duracell battery business into a separate company.
The S&P 500 is up 3.5 percent for the week, putting the index on pace for its first weekly gain in five and best week since the start of 2013, powered largely by solid corporate earnings reports.
The benchmark index is down 2.8 percent after slumping more than 7 percent from its record high on September 18 while volatility has spiked.
“The global growth scare that set everything into a tailspin seems to have calmed down a little bit, the world is not coming to an end,” said John De Clue, chief investment officer of the Private Client Reserve at US Bank Wealth Management in Minneapolis, Minnesota.
“We were lulled into a sense of complacency and now the market is on high alert, people perceive both threats and opportunities and they are poised to take action pretty quickly.”
Concerns over the spread of Ebola continued to vex the market.
A doctor who worked in West Africa with Ebola patients was in an isolation unit in New York City on Friday after testing positive for the virus while the World Health Organization set out plans for speeding up development and deployment of experimental Ebola vaccines.
At 10:04 a.m. (16:04 SA time) the Dow Jones industrial average rose 6.07 points, or 0.04 percent, to 16,683.97, the S&P 500 lost 0.64 points, or 0.03 percent, to 1,950.18 and the Nasdaq Composite added 1.97 points, or 0.04 percent, to 4,454.76.
Sales of new US single-family homes rose to a six-year high in September, up 0.2 percent to a seasonally adjusted annual rate of 467,000 units.
The largest percentage gainer on the S&P 500 was Edwards Life, which rose 10.2 percent, while the largest decliner was Amazon.
On the Nasdaq 100 the largest gainer was KLA Tencor, which rose 8.3 percent, while the largest decliner was Amazon.
Among the most active stocks on the NYSE were Petrobras, up 7.18 percent to $12.98; Ford Motor, down 2.85 percent to $13.99 and Bank Of America, up 0.06 percent to $16.61.
On the Nasdaq, DryShips, down 26.3 percent to $1.48; Microsoft and Apple, down 0.1 percent to $104.77 were among the most actively traded.
Declining issues outnumbered advancing ones on the NYSE by 1,472 to 1,289, for a 1.14-to-1 ratio on the downside; on the Nasdaq, 1,153 issues rose and 1,131 fell for a 1.02-to-1 ratio favoring advancers.
The benchmark S&P 500 index was posting 20 new 52-week highs and two new lows; the Nasdaq Composite was recording 29 new highs and 17 new lows. - Reuters]]>
The intended strike action by Uasa members at the SA Naval Base in Simon's Town has been interdicted, the union said.]]> |||
Johannesburg - The intended strike action by Uasa members at the SA Naval Base in Simon's Town has been interdicted, the union said on Friday.
“The Labour Court granted an interim order to Navigators CC this morning and the return date is November 21, for Uasa to show cause why the interim order should not be made permanent,” said spokesman Andre Venter.
He said Navigators CC was a labour broker appointed to provide dock and maintenance services.
“Uasa members in Simon's Town have been denied upward mobility and a decent job for 26 years because of the shameful practice by the SA Navy through Armscor of appointing new labour brokers every three years or so.”
He said the members mandated the union to demand permanent employment.
“When negotiations failed, we took the matter up with the CCMA, and because the matter was not resolved, a certificate of non-resolution was issued by the commissioner.
“Uasa consequently held a strike ballot among our members and the overwhelming majority of members indicated that they wish to embark on a protected strike.”
Venter said a notice of intention to embark on strike was served on Thursday to start the strike action on Monday.
The strike was supposed to start on Monday, and could have impacted on a joint maritime exercise between India, Brazil and South Africa, which is set to take place between October 26 and November 7.
“We are confident that we will successfully show just cause when we return to the labour court on November 21. In his order, the judge ordered that we may anticipate strike action within 48 hours, should he rule in our favour.” - Sapa]]>