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Risk-off environment exposes SA’s weak fundamentals

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The global risk-off environment, brought about by fears of a US recession, has further exacerbated South Africa’s economic woes. “When the tide goes out, you tend to see which countries are exposed in terms of weak fundamentals,” says Annabel Bishop, Investec Chief Economist.

 

In this Investec Focus radio podcast, Investec Chief Economist Annabel Bishop discusses local and international concerns affecting the South African economy.

 

Annabel Bishop on rand volatility

“Typically, you do see quite a bit of volatility in the domestic currency in the middle two quarters of the year. In the Northern Hemisphere summer period, we tend to see heightened sensitivity to global market events.

“So if you have a risk-off event like the recent escalation of trade war tensions between China and the United States and concerns that the FOMC might not cut interest rates as much as previously was expected – those concerns were exacerbated in terms of the market impact and that’s quite typical for this time of the year. This given that trading conditions are fairly thin as the bulk of market traders in the Northern Hemisphere do tend to go away on their summer vacations now.”

Read Annabel’s Rand Note.

On underlying fundamentals for SA currency and markets remaining weak

“When the tide goes out, you tend to see which countries are really exposed in terms of weak fundamentals and of course with the global financial markets seeing a risk-off period, essentially the tide flowing out, then you see some of South Africa’s worries really being exposed, particularly in the run-up to the medium-term budget policy statement.

“That mini-budget we get, halfway through the fiscal year, gives us an update on government finances and of course the great worry around Eskom and its financing – what’s the quantum of debt that’s going to likely be transferred to the South African government balance sheet?”

On the proposed Debt Relief Law

“The worry [with the new Debt Relief bill] for the banking system is that such write-offs can have a significant impact on the banks’ books themselves. Conversely, this comes at a time where debt forgiveness could see some increase in borrowing.”

On an IMF bailout

“The IMF has said that South Africa is not, at the moment, in a situation which would require IMF rescue, which only happens when you go into a balance of payments crisis, so if we were unable to make payments on our government debt, particularly hard currency and foreign payments. South Africa is not deemed to be in that territory at the moment.”

On Brexit’s impact on SA

“There’s been a lot of increased relationships with South Africa in terms of trade. The UK is looking to foster deeper trade relationships and business ties with SA. If we do see a hard Brexit, strong breakaway from the EU for the UK, it will look to foster trade relationships and deals with other countries.”

On a potential US recession

“We have seen concern that the United States might not cut interest rates by as much as needed in the face of what could be a weakening in US economic growth and global economic slowdown.

“If we do see a situation where it looks like the United States will really go into a recession then I don’t think the Fed would hesitate in terms of cutting interest rates. But at the moment the US economy is deemed to be doing fairly well and I think there’s a friction between what the markets expect and what’s been communicated by the FOMC.”

 An interest rate cut from the FOMC?

“Markets are pricing in an 80% chance of a cut in the next meeting which is in September and slightly less than that for October and then perhaps around about 50% in terms of the December cut. Although these probabilities do change quite a bit.” BM

 

 

This article originally appeared on Investec’s FOCUS.

 

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In other news…

South Africa is in a very real battle. A political fight where terms such as truth and democracy can seem more of a suggestion as opposed to a necessity.

On one side of the battle are those openly willing to undermine the sovereignty of a democratic society, completely disregarding the weight and power of the oaths declared when they took office. If their mission was to decrease society’s trust in government – mission accomplished.

And on the other side are those who believe in the ethos of a country whose constitution was once declared the most progressive in the world. The hope that truth, justice and accountability in politics, business and society is not simply fairy tale dust sprinkled in great electoral speeches; but rather a cause that needs to be intentionally acted upon every day.

However, it would be an offensive oversight not to acknowledge that right there on the front lines, alongside whistleblowers and civil society, stand the journalists. Armed with only their determination to inform society and defend the truth, caught in the crossfire of shots fired from both sides.

If you believe in supporting the cause and the work of Daily Maverick then take your position on the battleground and sign up to Maverick Insider today.

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Austria stops train from Italy due to coronavirus suspects: report

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VIENNA (Reuters) – Austria has denied entry to a train coming from Italy on suspicion that two travellers might be infected with the coronavirus, tabloid Oe24 said on Sunday, citing security sources.

The train was now waiting at the Brenner Pass on Italian territory. On board were two people with fever, who are suspected to be infected with the coronavirus, Oe24 said on its website.

Austrian police, the interior ministry and the train operator OBB could not immediately be reached for comment.

Reporting by Kirsti Knolle; Editing by Giles Elgood

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Scarlets down Kings with bonus-point win

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Cape Town – Scarlet prove too strong for the Southern Kings as they claimed a bonus point win in their PRO14 encounter at the Parc y Scarlets in Llanelli on Sunday.

As it happened | Scarlets v Kings

The home side won 36-17 after leading 12-10 at half-time.

Register your interest for the British & Irish Lions tickets in South Africa 2021

The home side scored six tries in the match through Tevita Ratuva, Ed Kennedy, Ryan Conbeer, Uzair Cassiem, Dan Davis and Tom Rogers.

Dan Jones added two conversions, while Conbeer landed another one.

The Kings replied crossed the whitewash twice thanks to Howard Mnisi and Christopher Hollis with Demetri Catrakilis adding two conversions. While Courtney Winnaar kicked a penalty for the visitors.

Next week the Kings host Connacht on Sunday, March 1 (15:00) while the Scarlets travel to Ireland to face Munster on Saturday, February 29 (19:00 SA time).

Scorers:

Scarlet

Tries: Tevita Ratuva, Ed Kennedy, Ryan Conbeer, Uzair Cassiem, Dan Davis, Tom Rogers

Conversions: Dan Jones (2), Conbeer

Kings

Tries: Howard Mnisi, Christopher Hollis

Conversions: Demetri Catrakilis (2)

Penalty: Courtney Winnaar

Teams:

Scarlets

15 Angus O’Brien, 14 Corey Baldwin, 13 Kieron Fonotia, 12 Paul Asquith, 11 Steff Evans, 10 Dan Jones, 9 Kieran Hardy, 8 Uzair Cassiem, 7 Josh Macleod, 6 Aaron Shingler, 5 Sam Lousi, 4 Tevita Ratuva, 3 Werner Kruger (captain), 2 Taylor Davies, 1 Phil Price 

Substitutes: 16 Ifan Phillips, 17 Dylan Evans, 18 Javan Sebastian, 19 Steve Cummins, 20 Dan Davis, 21 Dane Blacker, 22 Ryan Conbeer, 23 Tom Rogers

Kings15 Courtney Winnaar, 14 Christopher Hollis, 13 Sibusiso Sithole, 12 Howard Mnisi, 11 Howard Mnisi, 10 Demetri Catrakilis, 9 Stefan Ungerer, 8 Elrigh Louw, 7 Ruaan Lerm, 6 Lusanda Badiyana, 5 JC Astle, 4 Jerry Sexton, 3 Rossouw de Klerk, 2 Jacques du Toit, 1 Schalk Ferreira

Substitutes: 16 Alandre van Rooyen, 17 Xandre Vos/Ignatius Prinsloo, 18 Pieter Scholtz, 19 Aston Fortuin, 20 Bobby de Wee, 21 Thembelani Bholi, 22 Josh Allderman, 23 Edmund Ludick

– Compiled by Lynn Butler


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Two killed in truck accident outside Middelburg

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Two people were killed after a tanker truck overturned on the N11 Groblersdal Road, outside of Middelburg, on Sunday morning.

Shortly before 10.30, paramedics and emergency services personnel arrived on the scene to find that the truck had overturned several times and was lying on the side of the road.

ER24 spokesperson Werner Vermaak said: “Paramedics found that one of the occupants from the truck was ejected during the rollover. Sadly, there was nothing that could be done for him and he was declared dead on the scene. A second occupant was found trapped inside of the cabin. He sustained fatal injuries and was also declared dead on the scene.”

Local authorities attended the scene.

Collision

Meanwhile, one person sustained serious injuries and another moderate injuries during a head-on collision between a truck and a bakkie along the Donkerhoek Road in Rustenburg on Saturday night.

One person sustained serious injuries and another
Image: Supplied/ER24

At about 20:00, paramedics arrived on the scene where they found the two mangled vehicles.

The driver of the truck sustained serious injuries and was rescued from the vehicle. The driver of the bakkie sustained moderate injuries and was treated on the scene.

Both were taken to a nearby hospital for further medical care, Vermaak said.

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Six Nations 2020: England beat Ireland to keep title hopes alive

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Six Nations: England v Ireland
England: (17) 24
Tries: Ford, Daly, Cowan-Dickie Pens: Farrell Cons: Farrell 3
Ireland: (0) 12
Tries: Henshaw, Porter Cons: Cooney

England ended Ireland’s Grand Slam hopes in brutal fashion as they rediscovered some of their World Cup form to reignite their own title hopes.

First-half tries from George Ford and Elliot Daly after Irish defensive errors plus two conversions and a penalty from Owen Farrell gave England a commanding 17-0 lead.

Ireland struck back with a try from Robbie Henshaw but with Johnny Sexton uncharacteristically wayward off the tee, they never seriously threatened a comeback.

Luke Cowan-Dickie drove over for England’s third midway through the second half, with replacement Andrew Porter’s late try no sort of consolation for Ireland.

With Wales at home in a fortnight before a trip to Italy, Eddie Jones’ men will believe they can finish the championship in style, although they may need Ireland to do them a favour and beat France in Dublin next month.

For the men in green and their head coach Andy Farrell it was a chastening afternoon, all the optimism created by the wins over Scotland and Wales leaching away in a display that was ponderous until the game was gone.

England capitalise on Irish errors

England began at a real lick, Manu Tuilagi punching holes through the middle and going close down the left before Andrew Conway hauled him down.

And the reward came when Ben Youngs stuck a grubber kick through, Sexton dithered and juggled in his own in-goal area and Ford seized on the loose ball to touch down.

Sexton then mis-kicked horribly with a straightforward penalty from 30 metres out and England set up camp again in the Ireland half.

Jonathan Joseph danced through in midfield after a mis-hit clearing kick from Conor Murray as Maro Itoje and CJ Stander scrapped in the 22, and England’s forwards hammered away at the Ireland line.

With a penalty coming, the men in white shaped to go wide, only for Ford to pop through another kick – and this time it was Jacob Stockdale who dallied, Daly diving onto the ball as Irish hands went to heads.

The scoreboard reflected the gulf between the two sides, England dynamic with ball in hand and ferocious in defence, Ireland laboured and error-ridden.

And Sexton’s miserable half was compounded when he was penalised for slowing the ball up, Farrell stroking over his kick to give England their biggest half-time lead over Ireland in 18 years.

England’s jabs hold Ireland at arm’s length

Ireland simply had to improve – and belatedly they did. An England knock-on from the restart gave away possession and the visitors finally chiselled out some territory too.

England managed to stop an Ireland driving maul from a line-out close in but the pressure kept coming.

Ireland won a penalty in front of the posts, opted for the scrum and eventually found space in the right-hand corner for Henshaw to burrow through two defenders and over the line.

But Sexton shanked the conversion just as he had the first-half penalty and the pressure ebbed away as Eddie Jones threw on Cowan-Dickie, Ellis Genge and Charlie Ewels.

England’s scrum, strong throughout, began to dominate and the penalties started to mount.

Farrell kicked to the corner, the forwards set up the maul from the line-out and Cowan-Dickie peeled off with Sam Underhill and Jonny May driving him on to roll over for England’s third try.

May was nearly clear on his own after seizing a loose ball from a messy Ireland ruck and appeared to be taken out by Henshaw after kicking the ball ahead, only for referee Jaco Peyper to wave play on.

And as the game stumbled towards the line, Porter rumbled over from a metre out for a try that made little difference to Ireland’s afternoon.

Man of the match: Courtney Lawes

A bravura performance in the back row from a man more normally seen in the second row. He made 14 tackles and eight carries in the hour he was on the pitch, setting the tone for a dominant England performance.

Line-ups

England: Daly; May, Tuilagi, Farrell (capt), Joseph; Ford, Youngs; Marler, George, Sinckler, Itoje, Kruis, Lawes, Underhill, Curry.

Replacements: Cowan-Dickie, Genge, Stuart, Launchbury, Ewels, Earl, Heinz, Slade.

Ireland: Larmour; Conway, Henshaw, Aki, Stockdale; Sexton, Murray; Healy, Herring, Furlong, Toner, Ryan, O’Mahony, van der Flier, Stander.

Replacements: Kelleher, Kilcoyne, Porter, Dillane, Doris, Cooney, Byrne, Earls.

Referee: Jaco Peyper

Touch judges: Romain Poite & Alexandre Ruiz

TMO: Marius Jonker

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Women’s T20 World Cup highlights: England beaten by South Africa in thrilling finish

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England suffer a tense six-wicket defeat against South Africa as their Women’s T20 World Cup campaign began with a narrow loss in Perth.

MATCH REPORT: South Africa edge England in tense finish

WATCH MORE: Ismail takes great running catch to dismiss England captain Knight

Available to UK users only.

Follow ball-by-ball Test Match Special commentary on all games on BBC Radio 5 Live Sports Extra, BBC Sport website and app; in-play highlights (UK only) and live text commentary on BBC Sport website and app.

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