Interest rates remained unchanged in SA for 15 months – until yesterday. SARB announced a decrease in the repo rate from 7% to 6.75%. Two weeks ago I mentioned:
Any good news?
Yes. With spare capacity in manufacturing and a slowing economy, inflation is coming under control. Interest rates are not going up any time soon. Yay!
The SARB has clearly seen enough bad news to know that a interest rate cut is necessary. It is all contained in a 9-page statement that sums up the whole of the SA economy. Some more bad news in the statement is that petrol prices are likely to go up in August and that Eskom is asking for a 20% increase from July 2018. CA(SA) students, many of your exam questions will be placed in SA, so staying in touch with these matters is vital.
Eskom had its AGM this week and besides all the allegations made against management, poor performance is a major concern. Have a look at this diagram put together by Moneyweb:
No wonder they are asking for a 20% increase in prices, the 1013% growth in Net Debt is killing Eskom’s ability to cover costs.
Because you are now a little sad, here is a great article about 35 big companies that started with little or no money. I got the article from Michael Jordaan, the former CEO of FNB, who generously pointed it out on Twitter. According to him, “Entrepreneurs can prove a lot with little to no capital. Great examples here including some that can be adapted to SA. You’re welcome.”
Go out there and build that big company, while everyone else in SA stresses about things over which they have little control!