For the first time since September last year, the rate of inflation in South Africa has gone down. Statistics SA said growth in CPIX, which leaves out mortgage costs, slowed to 13,0% year-on-year last month (September) from an all-time high of 13,6% in August. This is an indication that price pressures are starting to ease.

Some analysts are thinking that inflation peaked at 13.6% and we should start to see it continue to drop over the next couple of months. But one thing to consider is the strength of the rand. If the rand continues to weaken it will put further pressure on inflation. The rand has shed about 35% versus the dollar since the start of the year. It traded at around R10,3350/$ in early trade, compared with R10,34 just before the data was issued. Inflation is expected to fall by about two percentage points in January next year when the consumer price index (CPI) is rebased and reweighted. The CPI replaces the CPIX as the targeted measure of inflation from next year.

With the expected lowering of the rate of inflation, does this mean we could be inline for interest rate cuts? Let’s hope so.

It must now be horribly clear to everybody with an investment portfolio – indeed, to anyone who watches the financial markets – that no country or sector is safe from a bear market of the magnitude of the one we’re suffering through right now. When stocks get marked downen masse, as they have, literally everything drops. What’s more, there may be very little rationale for which stocks drop — or how much they drop by: When the wave of selling meets very few buyers, good stocks can easily fall more than bad ones.

Does that mean it’s a waste of time to search for a “safe haven?
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With the current financial chaos gripping the markets the world over, we may have a bit of relief on Friday in South Africa when the Central Energy Fund releases the latest petrol and diesel prices. The price of petrol could drop by 35 cents according to predictions from analysts whilst diesel could go down by 20 cents a litre. The prices could drop because of the falling world oil prices but we may not get the full benefit of these falling prices because of the weakening of the rand against the US dollar.
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The Organization of Petroleum Exporting Countries (OPEC) Friday said it would cut oil production quotas by 1.5 million barrels a day in an attempt to put a floor under oil prices, which have plunged nearly 60% from their July record.

"Oil prices have witnessed a dramatic collapse - unprecedented in speed and magnitude," OPEC said, adding that prices have fallen to levels that could jeopardize "many existing oil projects and lead to the cancellation or delay of others, possibly resulting in a medium-term supply shortage."

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In the face of the worst worldwide financial crisis since the Great Depression, the Organization of Petroleum Exporting Countries (OPEC) is expected to cut crude-oil output and raise prices at an emergency meeting in Vienna tomorrow (Friday). But even with crude oil prices down more than 50% from their July record highs, friction between cartel members has analysts wondering just how big the prospective cut will actually be.

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By 18:10 today, the rand was bid at R11.2763/$ from a previous close of R10.6550. It was bid at R14.4810/€ from a previous R13.8936 and at R18.2403/£ from R17.7622 before. Earlier in the day, the local currency hit the 11.2833 to the dollar mark, the worst level the rand has been in six-and-a-half years.

Why is the rand loosing so much value? According to analysts the local currency was being knocked by emerging market risk aversion as fears of a global recession continue to haunt international markets. Meanwhile, The International Monetary Fund (IMF) said today that the rand may be overvalued.

In the ever changing world of technology, mobile operator Vodacom has intoduced the Short Voice Service (SVS) to customers in South Africa. What is SVS you may be asking? Well, instead of sending an SMS which is in text, you can now send a short voice message (30 seconds long) to another Vodacom subscriber without having to talk to them. 

To use SVS, you dial the #digit followed by the number of the recipient (i.e. #0821234567) and leave the SVS - a warning beep/s will sound 25 seconds into the recording to warn the speaker that the 30 second limit has almost been reached. The cost of an SVS will be R0.90 (90 cents) but the SVS service will be free of charge until 9 November 2008. Normal billing will commence on 10 November 2008, and customers will be billed an all-day fixed rate of R0.90 (incl VAT) per SVS sent.
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