Finance

5 important things happening in South Africa today

Luke Fraser

 ·5 Jun 2023

Here’s what is happening in and affecting South Africa today:

• Bond crisis: The South African Reserve Bank (SARB) says local investors buying government bonds might not be able to fill the gap left by foreign investors. The SARB said that South Africa’s greylisting and non-investment grade status could see bond sell-offs by international investors. However, with local investors stepping in, there are concerns about the country’s financial stability regarding market liquidity, increased volatility and higher domestic government bond yields. [Business Day]

• Chicken disease: At least 550,000 chickens have been culled in the Western Cape following an outbreak of the highly pathogenic avian influenza (HPAI). At the end of May, the Department of Agriculture said that the five HPAI outbreaks had been confirmed across the province, with all affected farms placed under quarantine. South African Poultry Association’s Izaak Breitenbach said that none of the affected meat or eggs will enter the retail or wholesale chains, meaning consumers won’t have direct contact with the products. [Moneyweb]

• Eskom issue: Ratings Afrika says few of the municipalities in default on their Eskom accounts will be able to comply with the strict Municipal Debt Relief plan from National Treasury. Municipalities currently owe the power utility roughly R56 billion, but the plan’s strict conditions could see it collapse altogether. For instance, the 12-month compliance measurement period is a major issue, as municipalities will have to start from scratch if they breach any of the relief conditions. [Moneyweb]

• Fort Hare fire: Fort Hare University management says a group of students set alight parts of the campus before the start of their mid-year exams. The embattled university said that the foyer of its indoor sports complex was destroyed, while some of its computers were also vandalised. Students are allegedly unhappy with their current exam schedule, but the university says students were consulted weeks ago about the changes in the schedule. [EWN]

• Markets: The South African rand was up about 1% on Friday, as it is expected that the US Fed will stand still on interest rates this month. Markets are now pricing in a 20% chance of the Fed hiking by 25 basis points compared to a 50% chance a week earlier,  according to the CME FedWatch tool, prompting a move back to riskier currencies. On Monday (5 June), the rand was trading at R19.55/$, R20.92/€, and R24.31/£. Brent crude is trading at $76.96 a barrel. [Nasdaq]