South African manufacturing sentiment worsens further, Absa PMI shows
South African manufacturers reported a continued deterioration in business conditions in February, a local purchasing managers' index (PMI) survey showed on Monday.
The seasonally-adjusted PMI sponsored by South African bank Absa slipped to 44.7 points in February from 45.3 in January, falling further below the 50-point mark that separates expansion from contraction.
"This is the fourth consecutive contraction, as activity remains subdued. The manufacturing sector has seemingly not picked up following its poor performance towards the end of last year," Absa said in a statement.
Respondents flagged a fall in business activity as a response to both a decline in demand and input supply issues.
Export sales also fell further into contractionary territory mainly owing to lower-than-expected demand, global trade disagreements and logistics issues.
"Uncertainties about global trade dynamics continued, with some respondents flagging that increased tension in SA-US relations had specifically worsened their prospects," Absa said.
President Donald Trump cut U.S. financial assistance to South Africa in an executive order last month, citing disapproval of its approach to land reform and its genocide case against Washington's close ally Israel at the World Court.
Absa said the return of scheduled power cuts after months of consistent supply may have also weighed on sentiment last month.
(Reporting by Tannur Anders; Editing by Alexander Winning)

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The National
28 minutes ago
- The National
Trump-Musk dispute exposes US space programme's reliance on SpaceX
A dispute between US President Donald Trump and billionaire Elon Musk that had escalated last week demonstrated a vulnerability of America's space programme and the consequences of its reliance on one private company. While the tension between President and billionaire has eased, the clash has exposed the risks of Nasa and the Department of Defence relying so much on SpaceX, Mr Musk's aerospace company, to carry out critical missions from taking astronauts into orbit to developing battlefield communications. The dispute unfolded on June 3, when Mr Musk criticised Mr Trump's proposed economic policy on X, calling it a 'disgusting abomination.' Mr Trump responded on Truth Social, threatening to withdraw 'billions and billions of dollars' in government contracts awarded to his companies. 'The clash between President Trump and Elon Musk exposes both the vulnerability of SpaceX and the reliance of the US government on SpaceX's capabilities,' said Laura Forczyk, founder of space consulting firm Astralytical. 'A healthy ecosystem needs multiple competitors to provide a variety of options for the space industry to choose from.' A public fallout Mr Musk escalated the situation by tweeting that SpaceX would begin 'decommissioning Dragon,' referring to the spacecraft that carries Nasa astronauts to the International Space Station. 'Cancelling government contracts over social media spats could be a real-world consequence to escalating rhetoric in cyberspace,' said Evan Nierman, chief executive of crisis communications company Red Banyan. 'But there is no reason for that to happen, especially since all sides will lose.' The Dragon capsule remains the only operational American spacecraft capable of transporting crew to and from the ISS, and its only rival, Boeing's Starliner, has only just completed its first crewed test flight after extensive delays. Before SpaceX, Nasa relied on Russian rockets and spacecraft for more than 10 years to ferry their astronauts to the station. Strategic reliance SpaceX launches most of the Pentagon's military satellites, delivers cargo and astronauts to the ISS, and is developing the Starship vehicle that will serve as Nasa's lunar lander for the Artemis programme. Its Starlink satellite internet system is also being used by the US military and allied forces for secure communications, including in war zones and disaster areas. 'Nasa has already invested $4 billion in SpaceX to develop the Human Landing System, and at present, there are no near-term alternatives, so SpaceX is secure for now,' said Dimitra Atri, a planetary scientist at NYU Abu Dhabi. Dr Atri said that the public dispute between Mr Trump and Mr Musk could prove useful in the long run. 'The feud essentially serves as a catalyst for diversification efforts that were likely needed regardless of political dynamics, given the strategic risks of single-source dependency,' he said. During a press briefing on June 9, Mr Trump acknowledged the importance of Starlink despite his criticisms of Mr Musk, saying: 'I may move the Tesla around a little bit, but I don't think we'll be doing that with Starlink. It's a good service.' Legal and political limits While Mr Trump has hinted at punishing SpaceX, any serious attempt to cancel or redirect federal contracts are likely to lead to legal challenges. Ms Forczyk said such actions would break procurement laws. 'Contracts by Nasa and the US Department of Defence are won by competition. In many cases, SpaceX is the best competitor,' she said. 'In a few cases, SpaceX is the only company capable of doing what the US government needs, such as launching astronauts to the International Space Station. 'Companies that feel they are treated unfairly can legally protest contract awards, as SpaceX did in 2014 and 2019. 'Political biases should not play a part in contracting decisions, and contracts under suspicion of political bias could be challenged in court. It would be illegal for President Trump to cancel a federal contract with SpaceX and give that same contract to a competitor company.' Tough times at Nasa The Trump–Musk dispute comes at a time when Nasa is under heavy funding pressure. A proposed budget cut of nearly 25 per cent for the 2026 fiscal year could jeopardise dozens of scientific missions. 'I don't think it's too far off to say that Nasa is facing its worst-ever crisis,' said Gordon Osinski, a planetary scientist at Western University in Canada. 'The Artemis programme to return humans to the Moon seemed to be safe but given the crucial role of SpaceX in this endeavour, even that could now be in jeopardy.' The face of SpaceX While SpaceX has consistently delivered on launch services and human space flight, its image is closely tied to Mr Musk's unpredictable behaviour and political views. 'The SpaceX brand is so deeply tied to Elon Musk that it is seen as an extension of him,' said Mr Nierman. 'That makes the political risk of the Trump–Musk feud harder to contain. The company's best move right now is to maintain institutional calm, keep its head down publicly, and double down on performance behind the scenes.' He said that the firm's long-term reputation would benefit from separating its operational excellence from Mr Musk's personal identity. A push for competition The argument may serve as a catalyst for Nasa and the Department of Defence to broaden their portfolio of providers, by increasing investment in Blue Origin, Northrop Grumman and emerging launch firms. Dr Atri said that while SpaceX currently leads in terms of capability and cost-efficiency, building a diversified and resilient space economy is in the national interest. Blue Origin was awarded a second Human Landing System contract by Nasa, but its lander is not expected to be ready until after the 2030s. 'That company is rapidly building the capabilities needed to challenge SpaceX in rocket launches,' said Dr Atri.


Zawya
an hour ago
- Zawya
India slashes interest rates, but who will borrow?
MUMBAI: India's central bank is rolling out aggressive monetary easing to revive consumption and investment in the world's fifth-largest economy, but the payoff hinges on whether banks ramp up credit and companies want to take on more debt in uncertain economic conditions. The Reserve Bank of India on Friday cut its key repo rate by a larger-than-expected 50 basis points and slashed banks' cash reserve ratio (CRR) by 100 bps, taking advantage of cooling inflation as U.S. President Donald Trump's tariff threats add to global uncertainty. The RBI's pivot comes at a crucial moment. A strong monsoon is expected to lift rural incomes and sentiment, but urban consumption and private investment remain tepid. The policy shift is in line with the government's broader push to support small and medium enterprises (SMEs), critical to create jobs in the world's most populous country. By unlocking bank funds, the central bank is betting that cheaper credit will revive urban demand, stimulate SME investment, and complement the rural boost — helping broaden the economic recovery. "Boosting consumption alone will not lead to long-term structural growth, the idea is to also boost investments by small and medium sized (SME) firms where there is a large appetite," said a source familiar with the central bank's thinking. RBI Governor Sanjay Malhotra said the measures aim to push growth toward a higher 'aspirational' trajectory of 7% to 8%. India's economy is estimated to have grown by 6.5% in the year to March and is expected to maintain that pace in fiscal 2026. The RBI did not immediately respond to a request for comment. Nearly 80% of retail and SME loans are now linked to external benchmarks such as the repo rate, meaning borrowers will see interest costs drop almost immediately, said Soumya Kanti Ghosh, group chief economic adviser at State Bank of India. Banks, however, have typically perceived SMEs as high-risk, charging them interest rates much above those offered to larger companies. Ghosh estimated that the easing could free up 500–600 billion rupees ($5.8 billion–$7 billion) for spending and investment. "The RBI's current focus is to support momentum in capital formation for more durable growth," said Ghosh, who was among the few economists to predict a 50-bps cut. ALL EYES ON BANKS NOW The success of the RBI's pivot now rests with banks' willingness to lend and borrowers' readiness to take on leverage. In 2023, a sharp uptick in unsecured loans prompted tighter norms by the RBI alongside concerns raised about elevated credit-deposit ratios at certain private banks. This prompted banks to go slow on these segments and moderated bank credit growth. Bank credit rose 11.2% in April compared with 15.3% a year earlier but was sharply below high-teen levels seen in 2023. Demand from large companies remains muted, as many are sitting on cash and prefer tapping bond markets or external borrowing, said a source at a state-run bank. In contrast, mid- and small-sized firms — which lack those options — are likely to benefit from the additional liquidity created by the CRR cut and the RBI has privately urged banks to focus on this segment, the source said. "Basically, they (RBI) have done all what they can from their side and left the ball in banks' and borrowers' courts," the source said. Retail credit segments like mortgages, SME lending and loans against gold are expected to see a pickup, bankers said. "We expect lending towards sectors like mortgages, MSME and gold to rise after this surprise CRR cut," said Virat Diwanji, national head-consumer banking at Federal Bank. Still, some analysts caution that the impact may remain limited to consumption, with little spillover to private investment. "We believe the transmission will be felt mostly through the consumption cycle," said Seshadri Sen, head of research and strategist at Emkay Global Financial Services. "Banks are far better geared to lend to this segment and will focus here to quickly ramp up loan growth. We see little impact of these cuts on corporate credit and private capex," he added. ($1 = 85.5600 Indian rupees) (Reporting by Swati Bhat and Siddhi Nayak. Editing by Kim Coghill)


Arabian Post
an hour ago
- Arabian Post
Saudi Oil Flow to China Inches Down Amid OPEC+ Expansion
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Conversely, independent processors such as Rongsheng Petrochemical, Hengli Petrochemical, and Shenghong Petrochemical face reductions. This redistribution highlights a prioritisation of established, integrally linked buyers amid a backdrop of expanding OPEC+ supply. ADVERTISEMENT Although Aramco has yet to comment publicly, the company's allocation strategy aligns with broader pricing adjustments. Saudi Arabia recently reduced the official selling price of its Arab Light grade to Asia for July, setting it at $1.20 per barrel above the Oman/Dubai benchmark—20 cents less than June's pricing and the lowest benchmark since May. This pricing decision reflects two intertwined considerations: increased global supply and sustained domestic demand. Internally, Saudi Arabia ramps up crude consumption for power generation and refinery throughput during the summer months. This seasonal domestic demand can restrict exportable volumes, prompting a more conservative OSP reduction compared with the broader cutbacks anticipated by markets. Meanwhile, the continued output expansion under OPEC+ serves both competitive and geopolitical objectives, helping Riyadh reclaim influence in key markets. OPEC+ members have collectively unwound approximately 1.37 million bpd of previously implemented cuts since April, which form part of an initial 2.2 million bpd reduction plan initiated in early 2025. The restored output aims to counterbalance growing global non-OPEC production and mitigate domestic political pressure—particularly from the US, which has advocated for greater oil supply. Notably, seven other nations in the coalition also agreed to this third consecutive increase, reinforcing OPEC+'s strategic shift towards output recovery. Market analysts indicate that larger increases in crude availability have begun to weigh upon Middle Eastern benchmarks, with the June OSP developments 'less aggressive' than anticipated, partly due to Saudi Arabia's own intensified refinery runs. Global demand dynamics further complicate the outlook, with potential softening in Chinese economic indicators and US-China trade negotiations influencing futures pricing. This recalibrated export approach reflects a nuanced balancing act for Saudi Arabia: securing long-term contracts with major Chinese refiners while managing domestic consumption and contributing effectively to global supply strategies. Analysts point out that the kingdom has largely succeeded. Brent crude futures have remained stable around $65 per barrel, with occasional upward pressure following confirmation of July's OPEC+ increment. ADVERTISEMENT Within China, diversions in allocations have specific implications. State refiners, many with government backing and deeper logistical links to Aramco, stand to gain from increased shipments. Independent refiners, essential drivers of private-sector energy demand, are compelled to source a greater share of crude from alternative suppliers such as Russia, the Middle East, or emerging West African producers. Their reduced access to Saudi barrels may translate to thinner margins amid said competition. Chinese crude throughput data underscores this evolving dynamic. Earlier this year, the nation's refiners reached record-high processing levels—nearing 14.8 million barrels per day—yet faced maintenance schedules and weakening export margins for oil products. These factors have cooled demand from some processors, slightly alleviating pressure on upstream supply chains. Within OPEC+, calls for coherence and strict quota compliance persist. Saudi Arabia has publicly censured members like Kazakhstan for exceeding agreed production levels, underlining Riyadh's insistence on an equitable distribution of output responsibilities. Expectations remain that OPEC+ may complete the unwind of its 2.2 million bpd voluntary cuts by the end of September, though some analysts caution that internal discipline could falter, potentially reshaping future output and pricing trajectories. Against this backdrop, Saudi Arabia's adjusted supply to China illustrates both strategic recalibration and geographic realignment. By trimming shipments marginally from independents, bolstering allocations to state-linked refiners, recalibrating export prices, and synchronising with collective OPEC+ policies, the kingdom is reinforcing its position in a price-sensitive, competitive marketplace. July's allocations represent not a retreat but a fine-tuned manoeuvre in a complex global chessboard. Saudi Arabia is both maintaining influence and responding to evolving domestic and international demands. While Chinese imports continue at robust levels, the marginal dip signals a deliberate redistribution rather than a market-driven contraction.