Here we go again and this is not an early April fools joke! Following on from the fuel prices increases last month by 61 cents a litre, there will be another increase in fuel prices on April 2 according to the Department of Minerals and Energy. The retail price of petrol will go up by between 66 and 68 cents a litre. While the wholesale price of diesel 0.005% sulphur will increase by 130 cents a litre. The wholesale price of illuminating paraffin will increase by 118 cents a litre, while the single maximum national retail price for illuminating paraffin will increase by 157 cents a litre.

This means that, a litre of petrol will now be costing almost R9 (R8.91) in Gauteng whilst it will cost about R8.67 at the coast. Read the rest of this entry »

The producer price index (PPI) rose to 11.2% year-on-year in February from 10.4% in January. This follows the increase in the CPIX to 9.4%. If any further sign was needed to almost make certain that interest rates are going to go up next month, todays PPI figures are reason enough.

The PPI rose 1.3% on a monthly basis after January’s monthly increase of 1.0%. Economists had forecasted the PPI to increase to between 10.4% and 11.1% but it looks like they were slightly off and the figure came in higher than they had expected. And all this before the proposed increase in electricity tariffs by 14% by Eskom. Chances are that the PPI will increase over the next couple of months fuelled by the electricity price hike. We could easily be seeing PPI being close to 15% quite soon. Worse still if Eskom get the go-ahead to increase tariffs by 53%, who knows where the rate of inflation could end up? Read the rest of this entry »

South Africa’s rate of inflation now stands at 9.4% year-on-year. The rate of 9.4% in the countries consumer price index excluding mortgage rate changes (CPIX). In January the rate was 8.8%. This is the eleventh consecutive month that the rate of inflation has been above the central banks target of between 3 – 6%.

The increase in the CPIX comes as no surprise as many had predicted this increase. With the increasing price of food and fuel there was really no way the inflation rate was not going to rise, it was a question of by how much. And it looks like it is not going to stop anytime soon with the proposed hikes in the price of electricity by Eskom. We maybe seeing this 9.4% figure rising past the 10% mark within the next few months. Read the rest of this entry »

It has been confirmed that the second of May will be a public holiday in South Africa to compensate for the clash between Good Friday and Human Rights Day falling on the same day this year. Everyone likes to have a holiday at one point or the other but from a business perspective, one has to question if this is a really good move in having this public holiday on May 2.

The South Africa Chamber of Commerce and Industry (Sacci) said, “Sacci believes that a late and discretionary announcement on this holiday is not conducive to sound governance. Holidays of this nature are extremely disruptive to effective business planning and have negative effects on costs, competitiveness and productivity.” Read the rest of this entry »

If the 14.2% increase in electricity tariffs in South Africa next month were not enough, Eskom have requested to the National Energy Regulator of South Africa that tariffs be increased by 60% and not just by 14.2%. If this increase is granted, it would put a lot of pressure on inflation and interest rates in South Africa which are already high.

How this situation is going to be resolved will be interesting. On one hand Eskom want the tariffs increase as they are saying their costs are escalating and they need to pass the cost onto the consumer. Eskom also need more money in order to develop more infrastructure to meet the growing power demands in the country. Read the rest of this entry »

As the market had predicted, the price of gold reached a record high of $1 000.45 today. The price of gold has been rising over the last couple of weeks largely due to investors investing in commodities such as gold as they ‘run away’ from the volatility of the world stock markets currently being experienced. Not only are the world markets affecting the gold price but the value of the US dollar and fears of a recession in the US are also contributing factors.

Gold has risen by about 17% so far this year, underscored also by supply problems in South Africa - which is one of the world’s largest producer of this precious metal.

At the start of January, the metal jumped above 850 dollars per ounce, smashing a 28-year-old record, and has been on an upward trend ever since.

The JSE closed in the negative today inline with other markets across the world. Despite the injection by the US FED of more liquidity into the market there are still fears with regards to the credit market woes which continue to drive the markets down.

The JSE all share index closed 1.31% down. The financial stocks were amongst the biggest loosers of the day as the financial index closed 2.77% in the red. The gold mining index was the biggest gainer of the day after propelling itself 3.53%, this on the back of the gold price soaring through the $1 000 mark today.

As at 18:00 local time, the Rand was trading at 7.9447 to the dollar, 16.1346 to the pound and 12.3807 to the euro. At the same time, platinum was trading at $2 108.50 an ounce, gold was at $995.60 an ounce after reaching the $1 000 level during the day and oil was trading at $107.04 a barrel.