The South African Reserve Bank has done a considerable amount of heavy lifting. This year alone, the repo rate was cut by 300 basis points. For many, it is no surprise that the bank decided to keep the rate unchanged, in its latest MPC meeting. In addition, the Reserve Bank has changed its forecast for GDP contraction in 2020, to 8.2 per cent. Investec Chief Economist, Annabel Bishop joins CNBC Africa for more.
The COVID-19 pandemic and lock-down regulations have had an extensive impact on economic activity. Stats SA reported that manufacturing production decreased by 16.3 per cent in June 2020, compared with June 2019. Annabel Bishop, Chief Economist at Investec joins CNBC Africa to give insight into the contributors, and the utilisation of manufacturing capacity in South Africa.
In its latest Quarterly Employment Statistics update, Stats SA has announced that formal non-farm employment decreased by 3000 in the first quarter of 2020. It is expected that the second quarter will see a plunge in employment on the pandemic’s economic fallout. Annabel Bishop, Chief Economist at Investec joins CNBC Africa for more.
As mentioned previously, the South African Reserve Bank has lowered the repo rate by 25 basis points, to 3.5 per cent. Joining CNBC Africa to look at how this further cut of interest rates means for South Africa locally and internationally are Annabel Bishop, Chief Economist at Investec and Elina Ribakova, Deputy Chief Economist at the Institute of International Finance.
With funding from the Oppenheimers' one billion rand relief fund for small businesses dried up, SMMEs in need of financial help to stay in business can now turn to the national R200 billion Covid-19 loan guarantee scheme, which opened yesterday. Richard Wainwright, new Chairman of BASA and CEO of Investec Banjoins CNBC Africa on how the scheme will work and which businesses qualify to apply.
A multi-billion rand loan guarantee scheme announced by South African President Cyril Ramaphosa last month is now officially in operation, with the assistance of the country’s major banks, including FNB, Investec, Standard Bank and Absa.
“In times of extreme market volatility (and corrections), it is often unnecessary for investors to look far down the quality curve to find attractive opportunities that will generate significant returns in future. This is oftentimes the correct strategy as those economic uncertainties causing market volatility can have far more dire consequences for lower-quality businesses,” writes Stephán Engelbrecht, Fund Management.
A three-pronged approach is needed to try and understand the financial markets in these extraordinary times.