Economy & Business News – 13 May 2024

ECONOMY & BUSINESS

• BNP Paribas, the sixth-largest bank in the world, is no longer operating as a bank in South Africa. The French company, which has €415 billion (R8.2 trillion) in assets under management, was given permission to conduct business as a bank in South Africa by means of a branch in 2012, allowing it to offer corporate and investment banking services. However, the group has since started scaling back from its non-core operations across Africa to focus on Europe and Asia instead. (Source)

• The Ctrack Transport and Freight Index (Ctrack TFI) in March increased to an index level of 119.7 after a decline in the first two months of the year.This is an increase of 1.1% compared with February, and just marginally up on a year ago. Except for two smaller sub-sectors (pipeline transport and storage, as well as warehousing) that declined, the other four sub-sectors in the index increased on a monthly basis, led by a strong increase in air freight. (Source Source)

• South Africa’s Transnet Port Terminals (TPT) says it will continue to invest in Durban Container Terminal (DCT) Pier 2 while legal proceedings play out around its selection of International Container Terminal Services (ICTSI), of the Philippines, for a 25-year partnership at what is South Africa’s largest container terminal. Rival bidder AP Moller–Maersk, of Denmark, is contesting Transnet’s selection of ICTSI, which was made in July last year, calling the award unlawful and invalid. (Source)

• Automotive industry. Record vehicle exports helped take South Africa’s auto trade balance to a positive R21.1 billion in 2023 from R19.6 billion in 2022 – an increase of 7.6%. Norman Lamprecht, chief trade and research officer at automotive business council Naamsa, said on Tuesday vehicle exports have remained the key driver for the automotive industry’s healthy trade balance since 2008. “As the largest manufacturing sector in the country’s economy, a substantial 21.9% of value addition within the domestic manufacturing output was derived from vehicle and automotive component manufacturing in 2023, while the broader automotive industry’s contribution to the GDP comprised 5.3% – 3.2% manufacturing and 2.1% retail.” The industry has now achieved a positive trade balance since 2015, according to the annual Automotive Trade Manual, previously named the Automotive Export Manual, which was released this week. However, the automotive trade balance figures exclude automotive aftermarket parts, which recorded a negative trade balance of R99.5 billion in 2023. (Source  Source)

• The TransUnion 2024 State of Omnichannel Fraud Report. In South Africa, as elsewhere, the surge in post-pandemic digital transactions escalated the scale and complexity of identity-based fraud. With cybercriminals increasingly adept at harvesting stolen identity information. The report zeros in on these challenges, offering targeted insights and trends that underpin smarter, more robust fraud prevention strategies. Key South Africa-specific fraud trends highlighted: identity takeover fueled fraud risk, the highest rate of suspected digital fraud, targeted and fell victim (Source)

• The BankservAfrica Economic Transactions Index (BETI), which measures all interbank economic activity processed by BankservAfrica, recovered further in April to the highest level in eight months. “Reaching an index level of 134.2 in April, the BETI has almost reached last August’s level and improved by 0.6% on a monthly basis. Towards the end of March, load shedding was suspended, leaving South Africans free of power cuts since then. This could have had a positive impact on economic activity in April while spending in preparation for the upcoming elections might have also played a role. Additional economic activity for political party campaigns and the IEC’s preparation activities are likely to be reflected in additional retail spending. A detailed evaluation of the BETI around election dates in South Africa revealed that in 6 of the 9 elections under review, economic activity picked up in the month before the election month, while in 7 of the 8 cases (2024 not included here) the BETI increased in the election month itself. (Source)

• Cars affordability. According to the latest quarterly employment survey (QES) published by Stats SA, the average salary in South Africa was R26 894 per month in November 2023. According to financing experts, individuals should spend no more than 25% of their monthly income on vehicle-related costs – meaning those earning R26,894 per month should spend no more than R6 725 on vehicle expenses. This assumes the cars are financed over five years (60 months) at an annual interest rate of 13% (prime +1.25%), with a 0% deposit or balloon payment. However, the experts noted that vehicle-related costs include vehicle instalments, insurance premiums, fuel costs. If the monthly repayment on the price of the vehicle alone is capped at R5 500, meaning the average income earner can afford a car priced up to R240 000. (Source)