SA’s business confidence lowest since junk rating

Business confidence fell to the lowest level since South Africa lost its investment-grade credit rating, as political and policy uncertainty continue to weigh on sentiment.

The gauge dropped to 31 in the fourth quarter from a revised 34 in the previous three months, Rand Merchant Bank (RMB), a division of FirstRand, and the University of Stellenbosch’s Bureau for Economic Research said in a statement yesterday.

Confidence is now at the lowest level since the second quarter of 2017, when former president Jacob Zuma’s move to fire Pravin Gordhan as finance minister saw the country’s debt cut to junk by S&P Global Ratings and Fitch Ratings.

Although Cyril Ramaphosa’s ascent to the presidency boosted business confidence earlier this year, sentiment has since cooled and the rand reversed all the gains that came on the back of the change in leadership.

The governing ANC’s decision to amend section 25 of the constitution to make it easier to expropriate land without compensation added to policy uncertainty, even as Ramaphosa’s moves to change some key ministers and the management of state companies such as Eskom were seen as positive steps.

The midterm budget last month painted a bleak picture of the nation’s finances, with government debt peaking at higher levels, and two years later, than previously forecast.

The index level shows that seven of every 10 respondents are unhappy with prevailing business conditions, RMB said.

“The reality is a multitude of political and policy issues, chief among them being the uncertainty around the government’s land reform plans, continue to weigh down on confidence,” RMB chief economist Ettienne le Roux said in the statement.

“Unless these are resolved in a more speedily and concrete fashion, private-sector fixed investment, and by implication, economic growth will remain disappointingly low.” – Bloomberg

Moneyweb

Tigon-accused Gary Porritt on Monday failed to attack the facts that supported a judgment in 2017 to withdraw his bail. Instead, during the hearing of his appeal against the decision, he attacked trial judge Brian Spilg in an inappropriate manner, the state told a full bench in the High Court in Johannesburg.

The three judges reserved judgment and Porritt will only later hear whether he will spend another Christmas in jail.

Porritt was the chief executive of former JSE-listed company Tigon. He is standing trial on more than 3 000 charges of corruption, racketeering and contraventions of the Income Tax Act, the Companies Act, and the Stock Exchange Control Act.

His bail was withdrawn after

The index level shows that seven of every 10 respondents are unhappy with prevailing business conditions.

Rand Merchant Bank