Re­serve Bank gov­er­nor casts de­cid­ing vote on repo rate

The Sunday Independent - - BUSINESS REPORT - Ka­belo Khu­malo

in­for­ma­tion at 23.7 per­cent, both re­ported by al­most a quar­ter of re­spon­dents.

Only then came en­ter­tain­ment at 22.1 per­cent.

While the E&M in­dus­try is ex­pected to grow in rev­enues, print media is ex­pected to con­tinue to see de­pressed mar­gin.

How­ever, My­burgh said the re­sult­ing quest to cre­ate the most com­pelling, en­gag­ing and in­tu­itive user ex­pe­ri­ences was now the pri­mary ob­jec­tive for growth and in­vest­ment strate­gies, with tech­nol­ogy and data at the cen­tre.

“Mag­a­zines and news­pa­per rev­enues are set to con­tinue their de­cline.

“To­tal news­pa­per rev­enue in the South African news­pa­per mar­ket has been un­pre­dictable,” she said.

“The mar­ket showed growth in 2013, de­clined in 2014 and bounced back marginally in 2015, con­tract­ing at a slower rate. In 2016, to­tal news­pa­per rev­enue was worth R8.9bn, but this fig­ure is fore­cast to drop to R7.4bn in 2021.”

The PwC study found that of the $2.8bn (R38bn) that the Nige­rian mar­ket would add be­tween 2016 and 2021, all but $452m would come from in­ter­net ac­cess rev­enue.

The com­bined el­e­ments of TV and video would add nearly $200m in rev­enue growth to 2021. SOUTH Africa’s rand headed to the long week­end on a firmer foot­ing sup­ported by both the US Fed­eral Re­serve Bank and the SA Re­serve Bank (Sarb) de­ci­sion to keep their bench­mark repo rates steady this week which halted the de­cline in the fal­ter­ing lo­cal unit.

The Re­serve Bank sprang a sur­prise on many on Thurs­day by keep­ing rates un­changed.

How­ever, the bank’s mon­e­tary pol­icy com­mit­tee (MPC) was split down the mid­dle with three vot­ing for a cut and three vot­ing for no cut.

The de­cid­ing vote went to the gov­er­nor, Le­setja Kganyago, who nailed his colours to the mast.

Al­let Op­per­man, an an­a­lyst at Trea­suryOne, on Fri­day said that should the cy­cle be for rates cuts, Thurs­day was prob­a­bly the op­por­tune time to cut with the event risk be­ing fairly low com­pared to when the MPC sits down again at the end of Novem­ber.

The jus­ti­fi­ca­tion pro­vided by the cen­tral bank sug­gests that it was eco­nomic un­cer­tain­ties cou­pled with the un­known elec­tric­ity price in­crease which tilted an evenly split MPC to tilt cau­tiously. The South African Rand is on a firmer foot­ing since the SARB kept repo rates steady.

“The rand re­ceived a re­prieve from the MPC yes­ter­day (Thurs­day) and is com­fort­ably trad­ing in the mid R13.20s with some down­side bias.

“Af­ter a week of los­ing ground, we feel that today might be a day of con­sol­i­da­tion and we could see the rand test­ing the high R13.10s again,” Op­per­man said.

The strength of the rand on Fri­day was also sup­ported by the weak­en­ing the US dol­lar which buck­led as ten­sions sim­mered on the Korean penin­sula.

The lo­cal unit re­versed losses of the last week-and-a- half caused by a re­port show­ing stronger US in­fla­tion, which pushed it as low as R13.35, its soft­est since Au­gust 15 and strength­ened to R13.19 against the dol­lar.

Adding to in­vestors’ risk-aver­sion was Stan­dard and Poor’s Global Rat­ings’ down­grade of China’s sovereign credit rat­ing. On Fri­day, the rat­ings agency said the coun­try’s at­tempts to re­duce risks from its rapid build-up in debt are not working as quickly as ex­pected and credit growth is still too fast.

An­a­lysts from In­vestec, said in a note on Fri­day, that in the end, the Sarb stood cau­tiously and had ex­tended the pe­riod of pos­i­tive carry that will as­sist in sup­port­ing the rand.

“The lo­cal unit re­sponded pos­i­tively to the news and tech­ni­cally, the rand now stands in a po­si­tion to stage a re­cov­ery with un­cer­tain can­dle­stick pat­terns now fol­lowed by a bear­ish en­gulf­ing pat­tern which un­doubt­edly points to a turn of the tide back in the rand’s favour,” In­vestec said.

The US Fed’s open mar­kets com­mit­tee did not al­ter rates at its meet­ing on Wed­nes­day while an­nounc­ing plans to be­gin par­ing its bal­ance sheet from next month. It also in­di­cated that one more rate in­crease by the end of the year re­mains pos­si­ble.

David O’Don­nell, a se­nior for­eign ex­change dealer at Mer­chant West, on Fri­day said that the mar­ket is un­wind­ing an overly pes­simistic view on US rates, which is the rea­son that the dol­lar has bot­tomed, over­all,

“Many in­vestors had ex­pected the Fed to strike a more dovish tone in light of the po­ten­tial eco­nomic im­pact of re­cent hur­ri­canes and the per­sis­tence of slug­gish in­fla­tion,” O’Don­nell said.

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