WEDNESDAY, 12.30AM:
SOUTH Africa could develop as an attractive emerging market hedge in the next two years, Socit Gnrale-Frankel Pollak economist Mike Brown said on Tuesday.
Speaking at the firm’s 21st Annual Investment Conference, Brown advised investment bankers to promote South Africa as a relatively safe emerging market hedge for international investors.
He said that South Africa’s investment potential arises from a combination of four key factors: large deregulated markets that have the capacity to absorb a sizable inflow of funds; a favourable business cycle; the current “disinflationary mode”; and a large market capitalisation that is continually growing — all combining to position South Africa in a favourable position compared to other emerging market economies.
Brown, however, also warned bankers that South Africa is operating in a global economy characterised by a high risk owing to the Asian market crisis. Because of this possible risk, and the expectation that the economy will have a sluggish two years, Brown recommended that local investors favour bonds over equities. Bonds, he advised, offer comparable returns at lower risk than equities.
BUSINESS BRIEFS
NUMSA TO PICKET EMBASSIES
THE National Union of Metalworkers of South Africa will picket all foreign embassies engaged in business with parastatal arms manufacturer Denel this weekend as a protest against unilateral retrenchments and workplace restructuring, Numsa announced on Tuesday. The dispute arose after Denel unilaterally formed restructuring and workplace committees without consulting Numsa.
MORE WOMEN IN METAL
SOME 1,5% of engineering and metal industry apprentices are women, the Steel & Engineering Industries Federation of South Africa said on Tuesday. Janet Lopes, head of education and training at Seifsa said the increase in female apprentices from 0,16% 1996 was largely the result of equal opportunities policies adopted by several companies in the metal industry.
WORLD BANK UPS EURORAND ISSUE
THE World Bank increased its December 2028, 30-year, zero-coupon eurorand issue for the fourth time on Tuesday. Lead manager Hambros Bank said the increase of R2-billion raised the issue to R7-billion rand, reflecting a continuing demand for long-dated AAA-rated supranational paper from European investors.
PROJECTS TO CREATE 60000 JOBS
INFRASTRUCTURE projects by the Development Bank are expected to create 60000 jobs this year, Finance Minister Trevor Manuel said on Tuesday. Speaking at the Socit Gnrale Frankel Pollack investment conference, Manuel also announced that unemployment is estimated at 30% and that he anticipates a recovery in the manufacturing industry, despite the packaging industry’s deep recession.
FINANCE BILLS MOVE
THREE new finance Bills glided through their second reading in Parliament on Tuesday without debate. Two of the Bills; the Stock Exchanges Control Amendment Bill and the Financial Markets Control Amendment Bill, regulate offshore investments. The third Bill, the Unit Trusts Control Amendment Bill, proposes the deregulation of unit trust fees, providing for the establishment of a fund or funds and more simplified reporting to unit-holders by management companies.
‘HURRIED’ ESKOM BILL REJECTED
ESKOM has sent a Bill, tabled to clear up confusion in present legislation over ownership of its assets, back to the drawing board on Tuesday, telling Parliament’s portfolio committee on public enterprises that the Bill is poorly formulated. As the Eskom Amendment Bill stands, it will destroy Eskom’s status as a borrower on the international capital markets by effectively depriving it of ownership of its assets, but leaving it with its liabilities, Eskom’s legal and secretarial manager Mohamed Adam said. “In fact Eskom would be bankrupt and its creditors would have no security for debts due,” Adam said. The public enterprises department conceded that the Bill had been put together in a hurry.
‘EQUITY BILL NOT VIABLE’
BUSINESS South Africa has rejected the government’s proposal that workplaces should reflect national and regional demographics as “economically unsustainable”. BSA argued that the proposal to set up “numerical goals” to achieve equitable representation of various groups is creating an artificial demand in the labour market as it does not take into account the structure of the labour market, or the current inability of the market to create jobs. BSA’s position will form part of the debate at the start of the talks on the Employment Equity Bill in the National Economic, Development and Labour Council on Tuesday.
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