Figures released today show that inflation in South Africa is not slowing down, if anything it continues to go up. Consumer price inflation data showed that the CPIX rate was 8.8% in January 2008 this is much more that the expected 8.4%. This increase in inflation is now putting more pressure on the central bank to hike interest rates again.

The central bank had predicted that the CPIX rate would come down within its target of between 3 – 6% in the final quarter of this year but with the way things are going, the central bank maybe forced to re-look their predictions as it is very unlikely that inflation will drop by that much this year. Some economists are predicting that inflation could reach the 9% mark in the next few months and that the rate could only starting getting back within the 3 – 6% target in mid 2009. Read the rest of this entry »

A report on Fin24 today headlined ‘Cheaper to rent in Cape Town’. Latest figures show that it is much cheaper to rent property in Cape Town than in Johannesburg. I had been thinking this all this time but reading the article today just confirmed my thoughts and I was not wrong. Having spent a few years living in Johannesburg, I always had the perception that living in Cape Town would be expensive. But I decided to move to Cape Town one year ago and have realised that rentals in Cape Town are lower than Johannesburg. Read the rest of this entry »

There seems to be a trend developing in South African sport lately and it seems to be all about the money. It started off with the rugby players being offered lucrative contracts to play for European teams. Some of the players from South Africa’s world cup winning team are currently playing their rugby in Europe and earning quite a lot of money. There are really two sides to this: Can you blame them for leaving and going to play where they are obviously going to get paid more money, at the end of the day, it is all about the money. They are people with families and their futures to consider and if they are getting job offers which will pay them more then why should they turn them down? On the other hand, is them leaving South Africa good for the game of rugby in South Africa? If the top players have all left the country to go to ‘greener pastures’, will the standard and competition in the local rugby remain the same without the best players? Read the rest of this entry »

The Rand reached a five-year low yesterday (20 February) when it was trading at R7.87 against the US dollar. This occurred just after the Minister of Finance announced the country’s budget. The drop in the rand is largely due to the announcement in the budget that exchange controls in the country had been eased meaning that quite a lot of money would be able to flow out of the country.

The government said it would ease exchange controls, allowing institutional investors to invest more offshore and removing a requirement that they obtain permission before taking the cash out of the country. With the current sentiment over South Africa, it could mean that investors maybe looking to invest their money offshore due to the negative outlook being caused by the ever rising inflation, electricity shortages and political leadership in South Africa. Billions of rand could flow out of the country which could also then force interest rates to go up again.

A report in the Business Day, today said that, the price of international bandwidth in South Africa would plummet 80% when the Seacom undersea cable goes live on June 17 next year. This is great news for all in South Africa as internet costs are currently very high and hindering businesses from expanding and reaping the full benefits online media can offer to businesses today. It is reported that, the Seacom cable will cost as little as R267 a month per 1MB, compared to between R3500 and R11000 to use Telkom’s bandwidth on the existing Sat-3 cable, or a punishing R231000 for satellite connectivity. That is one big difference in prices! Read the rest of this entry »

SABC News reported today that the petrol price in South Africa is set to go up next month. It is expected that the price of petrol could go up by between 40 and 45 cents a litre, resulting in a litre of unleaded petrol costing approximately R8.

For once it does not seem like this increase is due to rising world oil prices as they have remained fairly constant over the last few months. The reason for this astronomical rise is largely due to the weak Rand. The Rand has softened to around R7.80 to the US dollar over the last few days whereas it was almost R6 a few months ago. Read the rest of this entry »

The psychological mark of US$2 000 an ounce was reached last week in the price of platinum. Today (18 February) the price reached $2 119 an ounce. The main reason for the souring price of platinum is largely due to the current electricity problems in South Africa which is the largest producer of platinum in the world.

The price of platinum has already gone up by 30% this year and it does not look like the price will go down anytime soon as South Africa continue to battle against the supply of electricity to the country.

Last week the price of platinum reached an all time high at $1 915 an ounce but it was clear then that, that price would be short lived and we have not been proven wrong now that the price is hovering around $2 100. For those who had somehow foreseen this price increase a while ago or had taken a ‘gamble’ and decided to position their investments according to the price of platinum, they could now be reaping the rewards!