Star 2022-10-11

THE CRIPPLING strike by tens of thousands of Transnet employees could deteriorate into a full-blown industrial action as the employer and workers are still far apart in their salary negotiations. The strike entered the fifth day today after a second workers union joined the picket lines in demand for higher wages for its members. This comes as the industry has warned that the strike could worsen Transnet’s financial position and plunge the economy into paralysis after the State-owned freight and rail operator last week declared a force majeure for the second time this year. The Steel and Engineering Industries Federation of Southern Africa (Seifsa) yesterday said a full-blown strike at Transnet seemed unavoidable. Seifsa chief executive Lucio Trentini said such a move would have a serious effect on the economy…

THE INTERNATIONAL Monetary Fund (IMF) has advised struggling economies to continue implementing measures to tame stubbornly high inflation, including continuing rising interest rates, in a bid to sail out of a looming global recession. IMF managing director Kristalina Georgieva said yesterday that the global economy was faced with multiple crises, and thus had to navigate carefully which policies were to be implemented. Georgieva said the Covid-19 pandemic had an impact on supply chains while the war in Ukraine pushed up energy and food prices. She said that as a result, the risk of recession had necessitated tightening of financial conditions, with inflation having risen faster than originally expected. “We have calculated that about one-third equivalent of the world economy would have at least two consecutive quarters of negative growth this…

THE LABOUR wage dispute at parastatal Transnet posed a major risk for South Africa’s food, fibre and beverages sector, Agricultural Business Chamber (Agbiz) chief economist Wandile Sihlobo warned yesterday. The fourth quarter of the year so far was as busy as any other quarter with regards to trade and for this reason, stoppages would negatively affect both imports and export activities, he said. “The actual costs of it, however, will depend on the duration of the strike. We hope a solution is found quickly between Transnet and the labour unions to minimise disruptions to trade,” Sihlobo said. Exports of food, fibre and beverages in the last quarter of 2021 was at $2.8 billion (R50.62bn), which was 23% of the total value of exports in that year, Agbiz said. Some…

KUMBA Iron Ore warned yesterday in a statement that the force majeure declared by parastatal Transnet last week – after their workers downed tools and em- barked on a strike over wages – will knock its production and export sales. Also yesterday, coal producer and exporter Thungela Resources said it was keeping an eye on the situation, while other JSE- listed mining firms, including Exxaro and Glencore, kept mum on the disruption. Kumba said it had implemented contingency plans to safeguard its assets and minimise the impact on operations. “However, as a result of the disruption to Transnet’s rail and port services, the estimated impact on production is approximately 50 000 tons per day for the first seven days, and thereafter approxi- mately 90 000 tons per…

SIRIUS Real Estate, the JSE-listed operator of business parks, which is doing a three-day investor roadshow in South Africa, has secured gas supply for its German customers at fixed-rate agreements that will not expire until December, 2023, chief executive Andrew Coombs said yesterday. The JSE-listed real estate investment trust, which has 140 assets mainly in Germany, but also in the UK, and which has 9 532 tenants, is on a three-day road show in South Africa to see investors, and one of the issues addressed was the energy crisis in Germany. Coombs said yesterday in a trading update for the six months to September 30 that the Bundesnetzagentur, the German Federal Agency responsible for gas-supply co-ordination in Germany confirmed on September 30 that events at the Nord Stream 1…

A TRIO OF US economists, including former Federal Reserve chief Ben Bernanke, were awarded this year’s Nobel prize in economic sciences for laying the foundation of how the world now manages global crises such as the recent pandemic or the Great Recession of 2008. The trio, who also includes Douglas Diamond and Philip Dybvig, won the prize for their research on how regulating the financial sector and propping up failing banks can stave off an even deeper economic crisis, such as the Great Depression of the 1930s. “The actions taken by central banks and financial regulators around the world in confronting two recent major crises, the Great Recession and the economic downturn that was generated by the Covid-19 pandemic, were in large part motivated by the laureates’ research,” the Royal…