SA records surprise trade surplus in March

South Africa records trade surplus in March 2011, boosted by strong rand.

ROY DOWNING

Published: 2011/04/29 03:08:18 PM

SA recorded a trade surplus of R0,97bn in March 2011 from a deficit of R0,35bn in February 2011, according to data released by the South African Revenue Service (SARS) on Friday.

"The trade surplus for March 2011 was buoyed by higher commodity exports specifically in precious and semi-precious stones and mineral products," SARS said in a statement.

Exports rose 15,3% to R60,24bn and imports increased 12,7% to R59,27bn.

This is better than expectations as the majority of analysts expected March to show another trade deficit.

Standard Bank said it expected the trade data to reflect another deficit, albeit a rather modest one.

"The gap between exports and imports is expected to have widened in March (after narrowing to just -R0,4bn in February) on the back of an anticipated decline in exports to Japan," Standard Bank said in a statement.

SARS says the cumulative deficit for the year to date is R4,5bn compared with R9bn in 2010, an improvement of 49,9%.

Sasha Naryshkine, asset manager at Vestact, believes the strong rand is the cause of the surplus.

"We are exporting more which is good. What helped the trade surplus was the strong rand in March compared with last year," Naryshkine said.

However, Naryshkine says that April could get a deficit because of the Easter holidays and other public holidays in April.

Isaac Matshego, an economist from Nedbank told Reuters the trade surplus is very encouraging.

"The increase in exports is an encouraging number. I hope this indicates that the global environment is going to be supportive of the local recovery. On the import side, it seems a boost came from vehicles and electrical equipment, but from a low base," Matshego said.

"I think the numbers indicate that imports are not strong. We saw with credit data earlier that the domestic recovery is on track but is not booming, while exports are benefiting from global demand for commodities and remain strong," Salomi Odendaal, an economist from Citadel told Reuters.

"One can expect that if the rand remains strong and recovery picks up imports will pick up as well. But for this year, we should have a fairly small deficit if things continue in this way," Odendaal added.

Ban on booze ads ‘will cost SABC R400m’

Acting CEO says an outright ban on alcohol advertising on television and radio is one of the biggest risks to SABC’s revenue

CHANTELLE BENJAMIN

Published: 2011/04/29 06:27:57 AM

THE cash-strapped SABC stands to lose R250m-R400m if a total ban on alcohol advertising is imposed by the government, the broadcaster’s acting CEO Robin Nicholson said yesterday.

"An outright ban on alcohol advertising on television and radio is one of the biggest risks to SABC’s revenue," said Mr Nicholson. "It’s a significant part of our advertising revenue."

The SABC has warned the parliamentary portfolio committee on communications that such a ban would see the SABC lose about 8,5% of its advertising income. The SABC is the only public broadcaster in the world that has to rely almost exclusively on commercial revenue to fund its operations, with 80% of its revenue derived from advertising and 17% from licence fees.

A discussion document being circulated among the departments of health, social development and trade and industry, contains various proposals aimed at reducing alcohol consumption. These include limiting trading, a ban on sponsorships, higher taxes and a ban on advertising.

The SABC’s financial problems have occupied headlines , with the broadcaster indicating recently it did not intend to borrow more than the R1bn it received through a government guarantee, after a R1bn loss in the 2008-09 financial year. The broadcaster will still have to shed 699 out of 3699 jobs in order to streamline the organisation and cut costs, according to reports.

Mr Nicholson was recently asked by Parliament to name the top 20 risks to SABC revenue. "Obviously there were the normal ones like risk to market share, the decline of advertising and threats like mobile advertising, but loss of alcohol advertising revenue was at the top of the list," he said.

Marketing analyst Chris Moerdyk has warned that a ban would have implications for all media.

He said of the R17bn spent on advertising last year, about 10% could probably be directly attributed to alcohol advertising in the mass media.

"Removing that from the advertising and media industries would achieve nothing but considerable job losses.

"So much so that one could easily argue that an increase in alcohol abuse created by unemployment as a result of an advertising ban would exceed any benefits resulting from the ban," he said.

Mr Moerdyk said legislation banning smoking in public, and changes in the acceptability of smoking, helped to reduce smoking — not a ban on advertising. US research indicated that advertising bans led to a 5%-8% drop.

Some have argued that the ban would have more effect on marketing and advertising companies than on alcohol producers, as ads are aimed more at switching brands than encouraging drinking. It is also not clear how much money would be lost to soccer, cricket and rugby, which receive millions in sponsorship deals.

Health ministry spokesman Fidel Hadebe said yesterday the debate was at an early stage. "The ministerial committee , chaired by Social Development Minister Bathabile Dlamini, drew up the initial documents. Everyone will be consulted, including the alcohol industry before it is submitted to Cabinet. Look, alcohol abuse is a serious problem," he said.

Last month Ms Dlamini said a survey had shown that alcohol and substance abuse was destroying families.

Zuma offers shock deal on disputed ANC lists

Task team to look at candidates foisted on ANC voters ‘after poll’

SAM MKOKELI

Published: 2011/04/29 06:27:56 AM

IN AN astonishing about-turn just weeks before local government elections, President Jacob Zuma says some African National Congress (ANC) candidates could be ejected to make way for communities’ "preferred" candidates.

His climb-down on candidate lists, which have become a major source of friction in the party, could throw the outcome of the May 18 poll into disarray, certainly for some ANC candidates .

It also appears to negate the frantic efforts of ANC leaders in recent weeks to persuade some local communities to accept party- ordained candidates over their own popular choices.

Mr Zuma said yesterday that a task team would be established to investigate complaints about candidates foisted on communities by party leaders, and possibly replace those with popular candidates after the elections.

Mr Zuma told journalists in Johannesburg yesterday that the task team — whose terms of reference were still to be thrashed out — would investigate irregularities with the list process and remove undeserving councillors.

That can only be done after the polls , since the lists have already been submitted to the Independent Electoral Commission.

"We can’t correct the lists before the election, as legally that process is closed," he said.

Replacing the councillors would lead to by-elections , potentially creating even more problems for a party that has fared relatively badly in by-elections in the past five years.

Revisiting the lists could blow up in Mr Zuma’s face as councillors are unlikely to walk away from their jobs. The announcement may also open the floodgates for more communities to complain that their candidates had been imposed on them .

It may be difficult for the ANC to undertake the investigation after the elections as the focus is expected to shift to the succession within the party and its youth league, and the coming leadership elections in the unions and the South African Communist Party.

Mr Zuma told a press conference: "The ANC has taken a decision that the removal of preferred candidates from our lists should be properly investigated by a team to be set up by the ANC headquarters.

"In the affected wards, candidates that are preferred by our structures and communities were removed from the lists.

"This has understandably caused anger and frustration."

He said the findings of that team would allow the ANC to remove councilors who did not get party and community support but were put on the list by regional leaders. "We will deal with the individuals who should not be on the list after the elections."

He said the ANC’s "honesty and track record" spoke for itself and it would keep its word.

He also called on those who had left the ANC to register as independent candidates to return to the ANC.

During an election drive in Bloemfontein yesterday afternoon, Mr Zuma told unhappy ANC members to "vote for the ANC and we will sort out the candidate lists later". Mr Zuma was visiting the Khayelitsha informal settlement near Grasslands in Bloemfontein when local residents handed a memorandum to him containing their grievances.

Political analyst Steven Friedman said the ANC had dug itself into a hole with the introduction of the "ill-conceived" selection process. Revisiting it after the elections "may well backfire" and encourage councillors likely to lose their jobs to organise communities behind them in protest.

By announcing that the process would be revisited, the ANC was not putting out the fire. "It is making sure that the fires continue," Prof Friedman said.

Getting communities involved in the selection process was a bad idea from the start, when the party did not have its own selection process under control.

The ANC’s election campaign has battled to take off . ANC succession tensions have also seen key organiser Fikile Mbalula — the star of its 2009 national elections campaign — sidelined.

The ANC Youth League is campaigning to install him as secretary-general in party elections in December next year, and those opposed to the idea fear the May 18 elections may give him a platform to campaign for that post. With Sapa

Private sector credit extension below expectations

Growth in credit demand by South Africa's private sector slowed to 5,13% year-on-year in March

Growth in credit demand by South Africa's private sector slowed to 5,13% year-on-year last month, compared with a 5,43% rise in February, central bank data showed on Friday.

This was below expectations of 6,05% year-on-year but the numbers are very unimpressive, Ilke Smit, Economic analyst at Metropolitan Asset Managers said.

"Even though household credit extension increased by R8,398bn during March 2011, corporate lending contracted by R9,997bn. Year to date, corporate credit has declined by R17,113bn since December 2010, as household lending has increased by R19,228bn. Therefore private sector credit extension has only increased by R2,11bn since December 2010 – a meagre 0.5% growth for the first quarter of this year," she said.

Corporates are investing and reinvesting very slowly post-recession. Few companies are hiring en-masse either.

"There was no evidence of a meaningful upturn in corporate borrowing in March’s credit usage figures - surplus capacity means there is little compulsion for corporates to expand operations," Investec economist Annabel Bishop said.

In March, credit extended to the government declined by R4,453bn, which brought total domestic credit extension down to R2,124trn. This is R6,052bn lower than the previous month, and only up 3,63% year-on-year from a year ago. Corporate credit extension is up 2,64% year-on-year. Household lending is up 7,37% year-on-year.

"Mortgage lending declined by R1,616bn to a total of R1,046trn. From a year ago, mortgage lending is only up by 2,89% year-on-year. Instalment sales increased once again, speaking to the growth the economy has been witnessing in vehicle and furniture sale sectors. These types of lending are mostly unsecured– which paints a fragile picture for retailers should the job market not commence on a sustainable recovery," Ms Smit.

Namibia court clears local Walmart deal

Namibian court overturns competition watchdog ruling that placed conditions on Walmart’s proposed takeover of Massmart

A Namibian court has quashed a competition watchdog ruling that placed local conditions on Walmart's planned takeover of South African retailer Massmart Holdings, a newspaper said on Friday.

Massmart operations in Namibia include retailers such as Game and Builders Warehouse. The country's regulator had said the US retail giant's takeover should be subject to conditions relating to local ownership and prevention of job losses.

Walmart contested the decision in the Namibian High Court, which described the conditions as "arbitrary and irritional and impermissibly vague", and said they ran contrary to the Foreign Investment Act, the Namibian daily reported.

The judgment, which was awarded to Walmart with costs, means the $2.3bn acquisition of Massmart is now subject only to a decision by South African competition authorities. A hearing is scheduled for May 9.

Regulators in other African countries where Massmart operates have already given the deal the green light. The merger will affect operations in 14 countries.

CCS cops file chargesheet in Suri case

The Central Crime Station Police on Friday filed a preliminary chargesheet against four persons in connection with the Maddelacheruvu Suri murder case in a Nampally Court.

Though the 25-page chargesheet named five persons as accused in the murder of the factionist from Anantapur district, charges were framed against only four — Sulam Subbaiah, gunman Manmohan Singh Bhadauria, R. Venkataramana and Haribabu.

A chargesheet was not filed against the main accused Bhanu Kiran who is absconding.

Driver Madhumohan who shifted Suri to hospital in a critical condition was included as a witness in the case. A total of 88 persons who were examined in the case were included as witnesses in the case.

MLCs seek CBI probe on Jagan

April 28: The Congress MLCs, Mr K.R. Amos and Mr K. Yadav Reddy on Thursday approached the AP High Court seeking a direction to conduct a CBI probe against the former MP, Mr Y.S. Jagan Mohan Reddy, and his associates and associate companies.

The MLCs urged the court to investigate the colossal corruption coupled with abuse of power during the rule of the late chief minister Dr Y.S. Rajasekhar Reddy by his own son, Mr Jagan Mohan Reddy and others who allegedly amassed assets worth thousands of crores of rupees and expanded their business by not just defrauding the government, but also diluting the institution as a whole by flouting laws.

They also sought a probe against the Rajya Sabha MP, Mr K.V.P. Ramachandra Rao, and his relatives Raghuraj, Krishna Mohan and Mr N. Sunil Reddy, a close relative of Mr Jagan. The petitioners told the court that Mr Srinivasulu Naidu, founder of the Indira television, Mr Sajjala Diwakar Reddy, MD of the R.R. Global and his younger brother, Mr S. Ramakrishna Reddy and one Mr Muralidhar Reddy of Chennai were instrumental in causing a huge loss to the exchequer.

They prayed the court to conduct an investigation so that their role in the fraud could be established. They said that a small and defunct power company owned by YSR family attracted foreign investments, contrary to the laws applicable at that time, after he assumed charge as the Chief Minister of the state from tax heaven countries at a premium to promote four companies with this money. They told the court that the details of the modus operandi adopted by Mr Jagan are explained in the writ affidavit.