Here’s what’s happening in the markets:
- More doom and gloom coming out of the mining indaba, where new mineral resources minister Mosebenzi Zwane left attendees disappointed with no solutions to the many problems facing the sector. Meanwhile, the platinum industry is getting ready to once again head into wage talks with workers – this time, the sector is pleading poverty.
- Following an attempt by finance minister Pravin Gordhan to get South African businesses on government’s side, president Jacob Zuma is now meeting with CEOs and executives of some of the biggest companies in the country, to find out how all parties can come together to avoid further economic turmoil. This as South Africa faces waning growth, economic recession, and the threat of a ratings downgrade to junk.
- South African markets were down on Tuesday as investors continued to shed risky assets. Local stocks ended three sessions of gains, led down by financial shares and Naspers. The rand closed at R16.21 to the dollar and weakened slightly on Tuesday to R16.24 to the dollar. It’s trading at R23.41 to the pound and R18.20 to the Euro.
- In global markets, Asian shares tanked on Tuesday as stability concerns sent investors fleeing to safe haven assets. Meanwhile, Wall Street also saw a drop, as concern over global growth hit banks and other economically sensitive shares. Uncertainty over whether or not the US Federal Reserve will raise rates this year also had a negative impact.
- The oil price shrugged off Japan’s economic woes and lingering concerns about a global oversupply, jumping over 2% to as high as $32.95 a barrel. Locally, the oil price jump pushed an under-recovery in the diesel price of 1 US cent. However, the central energy fund showed an over-recovery for both 93 LRP and 95 LRP fuel of 40 cents and 36 cents, respectively.
In other news: Adding to the turmoil already faced in the mining sector, Kumba Iron Ore is facing an additional challenge – a R1.8 billion tax bill from SARS, on top of a R6 billion impairment. The company is contesting the penalty.