Business & Tech News
South African China Accord: Chinese President Xi Jinping and his South African counterpart Cyril Ramaphosa met on Monday, ahead of the ninth African Leaders Summit on China-Africa cooperation. China, is South Africa’s largest trading partner globally. Ramaphosa had been seeking to reduce South Africa’s trade deficit with Beijing and review his country’s trade structure with China, and to negotiate more sustainable manufacturing and job-creating investments in the country. The joint statement, released after the talks indicated that China was willing to uplift job creation, add manufacturing bases near the source of relevant raw materials, and promote the transfer of technology and skills among their businesses.
Motus Musters a Minimal Margin: Motus, the automotive industry company, which was unbundled from Imperial Holdings and listed separately in 2018, have released their results for their financial year ending 30 June 2024, this morning. Key figures indicate that while earnings increased by 7% to 113,6 million (ZAR), profit before tax was down a massive -27% with Headline earnings per share also down by -28%. Return on invested capital was down to 10,8% from 14,1% in the previous trading year. The company cited that the automotive landscape continued to be impacted by economic challenges that contributed to subdued growth. They have stated that higher-than-normal vehicle and parts inflation, the weakening of the South African Rand against major currencies, persistent power outages during the year, plus ongoing high interest rates had impacted their profit. Motus shares have grown by 22% in 2024 and it remains to be seen if it holds its value after figures released today. The share closed at R124.17 (ZAR) yesterday.
Manufacturing Production Dropped in August: The Absa Purchasing Managers’ Index (PMI) has dropped markedly in August, decreasing by 8.8 points to 43.6, this is down from 52.4 in July. According to Absa, this reflects a high volatility in the manufacturing sector in a year of political uncertainty. This has been impacted by high inflation, elevated borrowing costs and low global and domestic demand, which has not been strong enough to fuel a sustained rebound in production. The business activity index decreased by 11.9 points to 38.9 in August after a strong performance was recorded in July when it stood at 50.8. Absa stated that this reading of business activity is at one of its lowest points this year.
Market News
Markets: Currencies are trading in fairly narrow ranges this morning, with markets waiting for the reopening of US market after yesterday’s Labour Day holiday. The Dollar is tradin a little softer this morning at 1.1056 against the Euro, at 1.3126 against the Pound, and at 146.14 against the Yen. Today’s ISM manufacturing PMI will provide some clues as to how the US economy is performing after last week’s better-than-expected GDP number. Emerging Market currencies traded weaker yesterday, with the Rand hitting an intraday low of R17.93 before strengthening to close at R17.83. The Rand is currently trading at R17.92 and might be challenging the $18.00 level. The Hang Seng is currently in the red by -1.65% at 17 691 and the Nikkei flat at 38686.
Commodities: Gold is trading a touch softer at $2,498, while Platinum and Palladium are both trading downwards at $922 and $975, respectively. Concerns about the slow Chinese economy continues to reduce demand for oil. Brent crude remains lower at $77.49 while WTI is trading flat at below the $74.22.
Other News Today
Tunisian Election Shenanigans Continue: Reports from opposition teams in Tunisia yesterday claim that an opposition candidate for the presidential election in October had been arrested. The Tunisia’s electoral commission has only approved three candidates to run in the election in contravention of a court ruling to reinstate three others. Incumbent president, Kais Saied, has been accused of attempting to favour his own re-election by controlling who and how many candidates are permitted to run against him. President Said has been in power since 2019 and has previously fired the Prime Minister in 2021 and pushed through a new constitution that in essence gave him solitary ruling power in Tunisia. By ignoring the court’s ruling is likely to remove any credibility of the up-coming election.
DRC Prison Break Leaves 129 Dead: Reports from Kinshasa authorities in DRC, indicate that an attempted prison break at the Makala prison, DRC’s largest prison, left at least 129 people dead. The attempted breakout happened during a fire that had engulfed sections of the prison administration buildings that included the prison infirmary. Twenty-nine prisoners were killed by gunfire and an additional 59 were left injured. According to Interior Minister Shabani Lukoo, there was extensive damage to the building. The prison was designed to hold 1500 prisoners but currently has a prisoner population of over 14 000 according to reports from Amnesty International.
