Latest news with #CitadelGlobal
IOL News
27-05-2025
- Business
- IOL News
Rand in favour as dollar drops on back of Trump's policies
South Africa's local currency is hanging on below R18 to the dollar on the back of a weaker US dollar – a position US President Donald Trump seems to favour. Investec chief economist, Annabel Bishop, said in a note that this was because the US dollar's weakness was a major support. 'The greenback has dropped sharply from recent highs, on concerns over US tariffs and the US President seen to favour US dollar weakness,' she said. The currency opened at R17.89 on Tuesday morning, more or less on par with where it has been over the past about two weeks. By mid-morning, it was at R17.93. South Africa's local currency is hanging on below R18 to the dollar on the back of a weaker US dollar – a position US President Donald Trump seems to favour. However, even as investors turn to riskier assets, the rand is only in ninth place in the Bloomberg emerging market currency basket ranker. Bishop noted that Trump apparently wants a weaker dollar for trade support. Recently, that country's President has been negotiating trade tariffs with several major markets, including South Africa, after shocking the world and US markets with high and unexpected import duties on April 2 – his so-called 'liberation day'. Trump later backtracked some of these taxes, dropping them to 10% for 90 days as of April 3, bringing a sigh of relief to markets. However, the rand's strength against the dollar is not reflected in other forex trades, noted Bishop and it has not gained as much as some other currencies, including those of the Philippines, Thailand, and Malaysia. Bishop also pointed out that the rand has weakened against the euro and against the UK pound. 'The rand has not strengthened on its own, but reflects US dollar weakness,' she said. Andre Cilliers, currency strategist at TreasuryONE, seems to disagree, stating that the rand is the 'star performer amongst emerging market and risk-sensitive currencies'. Bianca Botes, director at Citadel Global added that the rand is 'taking its cues from the global landscape and the South African Reserve Bank interest rate decision, which will be released later this week'. IOL
IOL News
26-05-2025
- Business
- IOL News
Rand remains steady below R18 as dollar weakens due to US trade tensions
The rand held its ground against a weaker dollar on Monday. Image: Picture: Henk Kruger/Independent Newspapers The South African rand maintained its position below R18 against the US dollar on Monday, buoyed by a weakening greenback as investors reacted to US President Donald Trump's renewed focus on trade tensions with Europe. The rand traded at R17.82 to the dollar in morning sessions, benefiting from a broader decline in the US currency, which softened after Trump threatened Europe with 50% tariffs and criticised the region on social media. By 4.30pm the rand was at R17.87 to the dollar, 0.2% up. 'The dollar's weakness stems from investors shifting away from U.S. assets amid heightened trade rhetoric,' said Bianca Botes, a director at Citadel Global. The rand, however, remained stable against other major currencies, trading at R24.11 to the pound and R20.32 to the euro. Market participants await the South African Monetary Policy Committee rate decision later this week, with some economists seeing room for a 25 basis point cut, supported by subdued inflation at 2.8% in April, below the SA Reserve Bank's 3 - 6% target. Annabel Bishop, the chief economist at Investec, noted that the dollar has retreated from recent highs due to concerns over proposed US tariffs and a perceived preference by Trump for a weaker dollar to bolster trade competitiveness. 'Reports suggest the US is seeking to weaken the dollar, which has strengthened currencies like the yen and supported gains in others, including the rand,' Bishop said. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ Since mid-January, when the dollar index stood at 110.0, it has fallen to 98.9, driving the rand's appreciation from R19.23 to R17.81 against the dollar. However, this strength is largely confined to the dollar, with the rand weakening against the euro (from R19.51 to R20.37) and the pound (from R23.23 to R24.26) over the same period, reflecting the rand's reliance on dollar dynamics rather than inherent strength, Bishop added. Elsewhere, the British pound rose 0.13% to $1.3558 (R32.84), hovering near its highest level since early 2022, according to Reuters data. South African Markets Rally on Policy Wins South Africa's stock market continued its upward trajectory, fueled by growing investor confidence following key policy developments. The All Share index closed 93 724.31 points higher, up 0.21%. A recent meeting between President Cyril Ramaphosa and Trump yielded an agreement to negotiate on critical minerals, a vital sector for South Africa's economic growth, according to Trading Economics. Additionally, parliamentary approval of Finance Minister Enoch Godongwana's budget has eased political risks, further bolstering market sentiment. The South Africa Stock Market Index (Composite) has risen 3.64% over the past four weeks and 18.56% over the past 12 months, Trading Economics reported, reflecting sustained optimism in the country's economic outlook.
IOL News
26-05-2025
- Business
- IOL News
Cautious optimism in South Africa over new laws for Elon Musk's Starlink
Critics have asserted that the timing of these proposed laws was too coincidental following closely on the heels of President Cyril Ramaphosa's remarks about accommodating Musk and his ventures in South Africa during his working visit to the White House. The business sector has remained cautiously optimistic amid the possibility of a new law that could accommodate South African-born but US-based tech billionaire, Elon Must, to operate his internet company in South Africa. This comes after the Minister of Communications and Digital Technologies, Solly Malatsi, on Friday announced in a policy directive the proposed relaxing of Black Economic Empowerment (BEE) policies in the ICT sector. The proposal would allow Musk's satellite internet service to operate in the country without the usual requirements for 30% ownership to historically-disadvantaged groups, instead focusing on local investment and rural access. 'This move was designed to break a long-standing deadlock and signal South Africa's openness to innovative solutions, even as broader negotiations remained stuck,' said Bianca Botes, director at Citadel Global. Musk has falsely repeatedly claimed that he could not operate Starlink in South Africa because he is not black. The proposal to ease B-BBEE requirements has been met with criticism from several opposition parties in Parliament, although some parties within the Government of National Unity said the move would provide greater and cheaper internet access in the country, which is burdened by some of the world's highest data prices. The Portfolio Committee on Communications and Digital Technologies has summoned Malatsi to brief Parliament on Tuesday the newly issued policy directives aimed at easing Broad-Based Black Economic Empowerment (B-BBEE) requirements for licensing satellite services. The chairperson of the portfolio committee Khusela Diko said the 'gazetted policy directions appear to be in contravention of the Electronic Communications Act and in favour of low-Earth orbit (LEO) satellite provider SpaceX'. Critics have asserted that the timing of these proposed laws was too coincidental following closely on the heels of President Cyril Ramaphosa's remarks about accommodating Musk and his ventures in South Africa during his working visit to the White House. Wary of Musk's provocative stance on issues like alleged 'white genocide' in South Africa, detractors are concerned about the repercussions of welcoming a businessman whose actions challenge the very fabric of national interests. 'You can't come up with laws that are accommodating to an individual. Our country is gone if that happens. And this is the very same individual who is insulting us left, right, and center, accusing us of white genocide, even if his father stays here,' said Black Business Council CEO, Kganki Matabane on Sunday. 'And this is the very same person who was threatening Ukraine to switch off Starlink in Ukraine if Ukraine does not comply with what they want. So imagine the safety of South Africa and the safety of South African data with that type of person.' This comes as Musk's SpaceX-owned Starlink is steadily making strides in a number of countries in Africa. Last month, Lesotho granted a 10-year operating license to SpaceX's Starlink, allowing the company to provide satellite internet services in the country. Starlink first launched its operations in Africa at the beginning of 2023, when Nigeria became the first country on the continent to be granted access to the LEO satellite technology. It is supported by a network of over 6 750 LEO satellites, which SpaceX has been launching in batches since 2019. While proponents of satellite internet argue that Starlink could boost competition and connectivity across the country, critics remain adamant that any investment should comply wholly with South Africa's established legislation. 'We are not against Starlink or any other low Orbit satellites because there are many other low orbit satellites in China and other countries. We're not against any investment into South Africa,' said Matabane. 'We're against trying to change laws of a sovereign country to accommodate an individual or to accommodate a company. Remember, Elon Musk's company did not even attend the hearings at the Icasa. The amendments can be made as long as they are not made to try and accommodate one company or one individual, because that means we would have lost our sovereignty as a country. And that cannot be allowed.' Visit:
Mail & Guardian
21-05-2025
- Business
- Mail & Guardian
April consumer inflation edges higher to 2.8% year-on-year
Consumer inflation edged higher to April to 2.8% year-on-year from 2.7% in March, driven mainly by the housing and utilities as well as the alcoholic beverages and tobacco categories, Statistics South Africa said on Wednesday. Consumer But, on a monthly basis, consumer inflation slowed to 0.3% in April from 0.4% in March. The main contributors to the uptick in the annual number for April were alcoholic beverages and tobacco (4.7%), housing and utilities (4.4%), food and non-alcoholic beverages (4%) and restaurants and accommodation services (3%). During the same period, year-on-year inflation for goods eased to 1.7% from 2% previously, while that for services was at 3.8%, up from 3.5% in March, Stats SA said. Stats SA published Wednesday data ahead of Finance Minister Enoch Godongwana tabling a third version of the 2025 It also comes amid discussions about lowering the inflation target after Reserve Bank governor Lesetja Kganyago last year signalled a desire to set a lower midpoint for the inflation target in line with global peers. The central bank has a mandate from the treasury to keep inflation within a 3-6% target band, with a midpoint of 4.5%. April's slight inflation uptick suggests that the Reserve Bank will 'Lower inflation targets tend to reduce inflation expectations, which can moderate wage and price increases, helping to stabilise the economy,' said Bianca Botes, an analyst at Citadel Global. 'Research into South Africa's experience with moving the inflation midpoint to 4.5% shows that such shifts can be achieved without sacrificing gross domestic product growth or increasing unemployment, provided the central bank maintains clear communication and credibility. This suggests that a further reduction in the inflation target could be managed with minimal economic disruption. 'While this move could lead to more cautious interest rate policies and strengthen the rand, it requires balancing inflation control with growth and investment needs. The ultimate impact will depend on the clarity of communication, policy credibility, and the broader economic environment,' Botes added.
The Citizen
16-05-2025
- Business
- The Citizen
Weekly economic wrap: Rand strengthens, gold on back foot
Economic indicators also painted a bleak picture for jobs and mining production, with the unemployment rate rising to 32.9%. While economic indicators did not bring good news about jobs and mining production this week, the rand strengthened, although gold lost some of its shine. All eyes are now on Finance Minster Enoch Godongwana, who will try for the third time to deliver Budget 2025 on Wednesday, while the inflation rate for April will be announced on the same day and president Cyril Ramaphosa will visit the White House to talk US president Donald Trump out of punishing South Africa for the 'ugly things' happening to Afrikaners in the country. Tracey-Lee Solomon, economist at the Bureau for Economic Research (BER), says the rand appreciated 0.6% against the dollar and posted stronger gains of 1.4% against the euro and 0.8% against the pound, closing Thursday at its strongest level against the dollar so far this year. The rand dipped even lower to R18/$ on Friday morning, and ended the day trading at R18.0/$. ALSO READ: Economic activity slows in April as economy struggles Bianca Botes, director at Citadel Global, says the stronger rand was buoyed by a weaker greenback and anticipation of a key meeting between Ramaphosa and Trump, as well as news that a new inflation target will be announced soon. Isaac Matshego and Busisiwe Nkonki, economists at the Nedbank Group Economic Unit, say the rand was supported by a recovery in global risk sentiment sparked by the tariff compromise between the US and China following trade talks in Geneva last weekend. Gold and oil moved in different directions thanks to trade optimism But as the rand scores, gold suffers. Solomon says the shift toward a risk-on sentiment was evident in the retreat of safe-haven assets. The gold price dropped 4.4% week-on-week, hitting its lowest level since early April on Wednesday. She points out that oil prices climbed on the back of trade optimism, renewed sanctions on Iranian crude and OPEC+'s restraint on production increases in April despite higher quotas. Brent crude rose by 2.7% for the week but late-week hopes for a US-Iran nuclear deal lowered prices. Botes says the gold price fell to around $3,220/ounce early Friday morning, heading for a weekly loss of more than 3%. 'This decline was driven by a reduction in global trade tensions, which lessened the metal's appeal as a safe investment. Recent agreements to ease tariffs and the calming of certain geopolitical risks contributed to this shift, although some international negotiations showed little movement.' ALSO READ: Increased unemployment rate red flag for weak economic growth She says crude oil prices hovered near $61/barrel. 'Optimism about improved trade relations supported oil demand, but gains were limited by the possibility of increased supply from certain producers and a surprise increase in inventories. Forecasts for higher global oil output, as some major exporters increased production, also added further pressure on prices. Unemployment increased again in the first quarter Unemployment increased again in the first quarter, reversing the gains at the end of 2024. According to Statistics SA's Quarterly Labour Force Survey, the unemployment rate increased by 1 percentage point to 32.9% in the first quarter of 2025, reversing the 1% percentage point improvement recorded in the previous quarter. Damian Maart, economist at the BER, says the increase in unemployment stems from the entry of recent school leavers into the labour market and expected seasonal job losses after the holiday period. 'While the first-quarter uptick in unemployment is concerning, it aligns with historical trends and does not appear to be an outlier when compared with past first-quarter data.' Matshego and Nkonki say demand conditions have not improved sufficiently to utilise spare capacity and drive companies to increase hiring or expand their operations, while seasonal factors also played a role, especially in the domestic trade sector, which shed 194 000 jobs. ALSO READ: Salary survey shows gap between increases and inflation narrowing Not unusual for unemployment to increase in first quarter They also say that employment usually declines in the first quarter after a seasonal and temporary surge over the holiday season. 'Besides domestic trade, construction and private households also reduced their workforce, while transport, finance and utilities created more jobs. Despite the disappointing outcome, employment still increased by 43 000 compared to the same period last year.' Mamello Matikinca-Ngwenya, Siphamandla Mkhwanazi, Thanda Sithole and Koketso Mano, economists at FNB, say the fact that the absorption rate decreased by 0.8% to 40.3% suggests a moderate deterioration in the economy's ability to create jobs. 'At this rate, a significant proportion of the working-age population is still left out of the economy, emphasising the need for faster and labour-intensive growth. The near-term cyclical outlook for the labour market is clouded by elevated global uncertainty, including the impact of US trade tariffs. However, continued structural reforms should, over the medium term, support employment creation.' Mining production decreases again despite less load shedding According to Statistics SA, mining production outperformed expectations in March, showing a notable improvement and declining by 'just' 2.8% after a 9.8% contraction in February, Maart says. Matikinca-Ngwenya, Mkhwanazi, Sithole and Mano say the data confirms that the mining sector dragged GDP growth during the first three months of 2025, with output contracting by 4.5% compared to the fourth quarter of 2024, worse than the 0.7% contraction recorded in the fourth quarter. 'This, together with the quarterly weakness recorded in the manufacturing and electricity sectors, poses a downside risk to the GDP growth estimate for the first quarter. The remaining high-frequency data to be published over the next two weeks will give a clearer picture of how the economy performed. ALSO READ: Mining production disappoints again 'At this stage, we pencil in 0.2% quarterly GDP growth for the first quarter, which is lower than the 0.6% quarterly growth recorded in the fourth quarter.' Matshego and Nkonki say that generally inefficient domestic logistics, subdued global demand and stagnant commodity prices continued to weigh on the sector's performance.
