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This resource is hosted by the Nelson Mandela Foundation, but was compiled and authored by Padraig O’Malley. It is the product of almost two decades of research and includes analyses, chronologies, historical documents, and interviews from the apartheid and post-apartheid eras.

04 Nov 1996: Financial Report (TV Programme)

Click here for Overview of the year

From Johannesburg the headlines on Business Day Tonight. Another key figure quits the Finance Department. News about a deal being struck on the constitution gives the markets a lift. Despite good results both Edgars and CNA warn of a tough retail climate ahead and the rands woes knock business confidence.

Good evening, I'm Geraldine Bennet. The exodus continues from the Finance Department. This time the Department's Director General, Estien Calitz, aged just 47, is retiring. He has given no reason for his departure but it means that most of the key members of the budgeting team have now left. A successor has not yet been named. The position will be advertised this weekend. However sources expect Calitz's deputy, Maria Ramos, to get the post. Calitz plans to go into teaching and advising on economic matters.

The news from Pretoria was not all bad today. It seems there may finally be some news on the privatisation front. Recently appointed Posts & Telecommunications Minister, Jay Naidoo, says plans to sell a stake in Telkom are proceeding well. He expects negotiations with labour to be concluded soon. The intention is to sell up to 30% of Telkom. Goldman Sachs has already been appointed as an adviser. Naidoo has also vowed to build on the policies of his predecessor, Pallo Jordan, but he is planning to restructure the department to give it a clearer direction.

The markets had a better day for a change. They perked up after lunch when constitutional negotiators appeared confident a deadlock would be avoided. Always a good measure of confidence, the rand gained a cent to end below that crucial $4.40 level. Again ... the currency also gained all round. It was a similar story on the capital market. The yield on the benchmark long bond was 18 points down but the mood was more cynical on the JSE. Despite the news about the constitution, profit taking saw industrials end off their best levels. However, a firmer bullion price came to the rescue of the Gold Board and the overall index closed 11 points higher.

Well, investors may be feeling a little bit more optimistic towards South Africa at the moment but the World Bank says there is still much work to do if the country is to attract more foreign capital. According to its annual report on global economic prospects, Asia continues to offer investors good returns, but if countries like South Africa want to compete, the World Bank says investors will want to see progress on several key issues.

I think its prospects are good, assuming certain policy decisions the government has already taken continue to be in effect, namely keeping continued reduction of the fiscal deficit, opening up of trade, opening up of investment, liberalising of the exchange regime and above all flexibility on the part of both management and labour to new ideas, to new innovations, new ways of doing on business.

Two big retail chains Edgars and CNA Gallo dished up some buoyant annual results but, Vernon Matsopolos reports, both warn that the squeeze on consumers is starting to bite.

Buy now, pay later, and if you're buying at Edgars it could be up to 12 months later. You have to be a tough customer to withstand such a deal, hence no surprise that Edgars turnover topped five billion rand with earnings up 20%. Sales House and Edgars chain did well but a profit slide at Jet and losses at Shoecorp tarnished a good year and there are clear signs of a consumer slow-down.

There is a recession, at least in terms of customer confidence and over the last four months it's got progressively worse. Now how long that will last we don't know. Certainly the customer, the consumer, has had to put up with a few jolts in terms of a dropped value in the rand, increased interest rates.

It's shaping up to be a tough year for the country's retailers but Edgars is determined to brazen it out and plans to spend R400 million on keeping those tills ringing. The money will be used to upgrade and expand stores and improve systems.  Also reporting was the CNA Gallo Group which lifted earnings over a quarter to R90 million. It warned that slower spending would affect results in the year ahead but real earnings growth would be maintained. So what's the outlook for the sector?

We're seeing the stocks come off quite significantly over the past ten days really as a result of the depreciation in the rand and the subsequent increase in interest rates and I think that the shares have largely discounted the rise in interest rates but if there is another increase then we could see them coming off further.

In other news now, the state is to conduct an environmental study into developing a four billion rand alumina plant near Phalabowa. The project has been on the cards for some time. Business confidence has fallen to a eight month low. SACOB says the rand's plunge as well as the recent interest rate hike was behind the April fall. But it seems consumer confidence has not yet been dented too much. Last month vehicle sales grew 18% compared to April last year and that's in a month which traditionally sees slow growth.

Well that's it for tonight.

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