Unemployment Insurance Fund benefits are set to increase, Labour Minister Mildred Oliphant said.]]> |||
Johannesburg - Unemployment Insurance Fund (UIF) benefits are set to increase, Labour Minister Mildred Oliphant said on Saturday.
“The prudent investment of your funds by the UIF management and the board means that government is now in a position to increase unemployment insurance benefits from the current eight months to a year,” she said in a speech prepared for delivery.
This was subject to legislative amendment approval.
Oliphant was speaking at a domestic workers imbizo in Bloemfontein.
She said other changes to the UIF benefit would be the maternity benefit. It would be increased from the current 121 days to a period of four months based on a flat income replacement rate of 66 percent.
The maternity benefits would also be applicable to domestic workers.
“In future, we will also be amending legislation on compensation to also include domestic workers. There is no reason why you should be treated any differently from other workers,” she said.
Currently, employees on learnerships, those who worked for less than 24 hours a week and public servants were not covered in UIF benefits.
“In future all these workers will be eligible for UIF coverage,” said Oliphant.
She called for domestic workers to ensure that their employers complied with UIF laws and registered them. - Sapa]]>
Black economic empowerment is necessary to build a prosperous society, deputy president Cyril Ramaphosa said.]]> |||
Johannesburg - Black economic empowerment is necessary to build a prosperous society, deputy president Cyril Ramaphosa said on Friday.
“Black economic empowerment is necessary not only to satisfy the imperatives of the Constitution. It is necessary not only to correct the wrongs of the past. It is necessary and essential if we are going to build a prosperous, sustainable and equitable society.”
He said there was a need to undo the deliberate exclusion of black people and women from meaningful participation in the mainstream of the economy.
“We need to understand the barriers that still prevent black and women business people from establishing themselves in particularly industries. And we need to work together to address them.”
He told the ANC Nelson Mandela Region gala dinner that effective black economic empowerment benefited everyone.
“The Nelson Mandela Metro is a strategic economic centre. It has significant infrastructure and a strong industrial base. It has skilled and capable people. But most importantly, it has tremendous potential for growth and development.”
He said the region required a dynamic and vibrant partnership between government, business, labour and communities. - Sapa]]>
US equities enjoyed their best week in months as buying fever returned to the market following a month-long swoon on solid earnings.]]> |||
New York - US equities enjoyed their best week in months as buying fever returned to the market following a month-long swoon on solid earnings and easing anxiety about the Ebola virus outbreak.
The S&P 500 jumped 77.82 points (4.12 percent) to 1,964.58 on Friday, the biggest weekly increase in percentage terms since late 2012.
The Dow Jones Industrial Average rose 425.0 (2.59 percent) to 16,805.41, while the tech-rich Nasdaq Composite Index leaped 225.28 (5.29 percent) to 4,483.72.
The gains snapped a four-week skid that had dropped some leading indices by about 10 percent, a decline considered a market correction.
The week's trade showed the market's penchant for buying the dip has been restored, at least for the time being.
“Some say, 'That's the biggest correction I've seen in 2014, I'm buying now,'“ said Art Hogan, chief market strategist at Wunderlich Securities.
“The money waiting on the sideline sees it as an opportunity.”
Market sentiment had at times veered near panic earlier in the month on worries about slowing economic growth in Europe and China and, more recently, Ebola.
But analysts pointed to a few key data points, including a euorozone purchasing managers index of business activity, which edged up to 52.2 in October from a 10-month low of 52.0 in September.
“Even though the numbers still weren't very good, they allowed European economists to dismiss the risk of a recession, at least for this quarter,” said Chris Low, chief economist at FTN Financial.
Low said Chinese growth figures, while also lacklustre, came in better than expected, while worries that US retail sales could “collapse under the weight of some kind of Ebola panic also subsided this week.”
Corporate earnings reports were generally “good enough,” he added.
Among the better performers in terms of earnings, Apple finished the week at an all-time high after fiscal fourth-quarter earnings jumped 13 percent to $8.5 billion on soaring sales of its newest iPhone models.
Dow member Microsoft's earnings bested expectations following strong sales from its Xbox consoles and Internet “cloud” services for enterprises, fortifying confidence in recently installed chief executive Satya Nadella.
Airlines also prospered, as giant carriers American Airlines and United Airlines, among others, benefited from strong consumer demand and lower fuel prices. Industry officials also expressed confidence at the sector's ability to manage the Ebola risk.
But not all the week's reports were standouts.
Perhaps the biggest major laggard was IBM, which reported its 10th consecutive quarter of lower revenues as “Big Blue” continues to struggle with its effort to shift away from low-return commodity products and toward growing sectors such as data analysis and cloud computing.
Shares tumbled 11 percent since IBM's earnings report was released on Monday.
Amazon was another underperformer, as shares sank 8.3 percent after the online retailer's third-quarter loss rose tenfold to $437 million due to the costs of product launches including new phones, tablets and television programs.
Earnings season continues next week with reports from Pfizer, DuPont, ExxonMobil and Facebook, among others.
The highlight on the calendar is the Federal Reserve's two-day monetary policy meeting that opens Tuesday. The Federal Open Market Committee is widely expected to announce the end of the central bank's asset-purchase program and keep the federal funds interest rate near zero, where it has been since late 2008.
The week's economic data include the first estimate of third-quarter economic growth and the Conference Board's consumer confidence index for October. - Sapa-AFP]]>
The dollar weakened against other major currencies in cautious trade ahead of next week's Federal Reserve monetary policy meeting.]]> |||
New York - The dollar weakened against other major currencies on Friday in cautious trade ahead of next week's Federal Reserve monetary policy meeting, expected to mark an end to its massive asset-purchase program.
The market already has largely priced in the Fed's exit from its easy-money quantitative easing program, said David Song of DailyFX.
The US central bank began tapering the QE monthly purchases last December, when they stood at $85 billion, and the amount now is down to $15 billion.
The Federal Open Market Committee, which meets Tuesday and Wednesday, is also expected to stick to its outlook on keeping its benchmark interest rate near zero to mid-2015.
“Caution ahead of policymakers' October 28-29 meeting caused the dollar to settle into a narrow range against its rivals,” said Joe Manimbo of Western Union Business Solutions.
The greenback fell to $1.2666 to one euro from $1.2647 late Thursday.
The euro gained support ahead of the results Sunday of the European Central Bank's unprecedented stress tests on some 130
Analysts are confident that because banks have been taking action for months now to plug any holes in their balance sheets, there will not be any nasty surprises.
“We expect that the majority of banks will pass the assessment,” said credit rating agency Fitch.
Meanwhile the confirmation late Thursday of the first Ebola case in New York City “had limited evident impact in currency markets,” said XE Currency Blog.
2100 GMT Friday Thursday
EUR/USD 1.2666 1.2647
EUR/JPY 136.97 136.93
EUR/CHF 1.2062 1.2066
EUR/GBP 0.7873 0.7888
USD/JPY 108.14 108.27
USD/CHF 0.9522 0.9540
GBP/USD 1.6086 1.6032 - Sapa-AFP]]>
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]]>