BIZ BRIEFS
Retail sales continue to slow
Retail sales growth for the month of August weakened to 1.1% from 2% in July according to Statistics South Africa. On a month-on-month basis, seasonally adjusted figures decreased 0.9% in the same period compared to July, it said. In the three months ended August 2019, seasonally adjusted retail trade sales increased 0.7% compared with the previous three months. The contributors to the increase were “other” retailers; general dealers; and retailers in household furniture, appliances and equipment. FNB senior economist Siphamandla Mkhwanazi said the August retail sales numbers continue to “depict a muted demand environment”. Mkhwanazi said, looking ahead, the expectation is that lower interest rates, combined with strong unsecured credit lending, will provide “auxiliary support for consumer spending.’’ But, he added, this effect could be “counteracted by persistent pressures on consumers’ discretionary income, weaker labour markets and higher income taxes”.
Government seeks SAA partner
The government is in talks with potential strategic equity partners for SAA, President Cyril Ramaphosa said at the Financial Times Africa Summit in London this week. Reuters reported the president as saying: “We are on record as saying we are open to the participation of the private sector. We’re talking to a few interested parties when it comes to SAA.” The president’s comment comes after the airline received a cash injection of R5.5-billion from the government for the 2019-20 financial year.
SA’S credit market is growing
The National Credit Regulator’s second quarter data shows South Africa has an active credit market. The numbers show that, after seasonal adjustments, new credit granted amounted to a record of R137.5billion in the second quarter from R135.2-billion in the first quarter. Applications for credit increased to 11.3-million in quarter two from 10.8-million in quarter one, while the rejection rate slightly decreased in quarter two, to 55.4% from 55.8% in quarter one. Absa said in a note that, “These outcomes are slightly better than expected, given the prevailing narrative about consumers’ financial positions”. It said that it continues to view the consumer as constrained, but not in crisis. “Against the weak labour market, slowing income growth, higher taxes and low confidence, the consumer will remain in the doldrums in the near term”, which will affect consumers’ ability to repay debt, the bank noted.
SABC stems its financial losses
The SABC told Parliament’s portfolio committee on communications on Tuesday that it has improved its financial performance and could be well on its way to turning its fortunes around. In its annual report, released last month, the public broadcaster reported a net loss of R482.4-million but said the loss is a 35% improvement on the restated loss incurred in the 2017-18 financial year. SABC board chairperson Bongumusa Makhathini acknowledged that the year had been difficult, but said “in essence the SABC is doing very well.” He added that it is “driving change and a renewal project”. Makhathini also noted that irregular expenditure at the public broadcaster had decreased. On October 7 the SABC received the first cash injection of R2.1-billion from the treasury, of R3.2-billion promised.