1. President Cyril Ramaphosa’s Investment Summit kicks off today, and they are going to have to pull out all the stops because yesterday’s medium-term budget was a massive downer.
I think we are now well positioned to implement our stimulus and economic recovery plan moving forward to strengthen the economy, and respond to respond to the technical recession that we are in. We will now be able to move forward with even greater determination. #MTBPS2018— President Cyril Ramaphosa (@CyrilRamaphosa) October 24, 2018
The rand tanked after government drastically lowered its expectations for economic growth this year and admitted that SARS has been sitting on R20 billion tax refunds, which will now be paid out in one go. It will blow a massive hole in the national budget, and government debt will only get bigger in the foreseeable future. This won’t please the rating agency gods. This morning, the rand was at R14.62/$ and bonds remained under pressure.
More on the budget:
2. Markets: a difficult day ahead. Last night on Wall Street, shares plunged and Naspers’ American listing fell 9% after the Chinese government tightened its process for gaming approvals, a big blow to Tencent. Naspers, which has lost 40% of its value over the past year, represents a fifth of the JSE’s value.
3. In a surprise move, the US government has decided to can its new import tariffs on 161 aluminium and 36 steel products from South Africa.
4. The inflation number for September, released yesterday, was unchanged at 4.9%.
5. The UK chain owned by Famous Brands (Wimpy, Steers and Debonairs) has filed for bankruptcy protection. The loss-making Gourmet Burger Kitchen wants to avoid insolvency by selling unwanted stores and will try to arrange reduce rents.
*Cost of capture or a Dudu Tax* SAA has a R19.1billion government guarantee, R14.5billion of which has been used. Debt of R14.2 billion is maturing in or before March 2019. In 2018/19, government is allocating R5 billion to help the airline repay this debt. #MTBPS2018— Ferial Haffajee (@ferialhaffajee) October 24, 2018
*Cost of capture* The interest-bearing debt of the 10 state- owned companies that borrow most has grown from R266.7 billion in 2009/10 to R702.7 billion in 2016/17 – an increase of 163 per cent *in seven years*— Ferial Haffajee (@ferialhaffajee) October 24, 2018
Also from Business Insider South Africa: