Thursday September 15, 2011

From Creamer Media in Johannesburg, I’m Brad Dubbelman

Making headlines:

There are no guarantees that strategies to weaken South Africa's rand would work and such options are limited now that the government's budget is in deficit, Reserve Bank Governor Gill Marcus said yesterday. South Africa's rand has firmed by more than 22% against the dollar since the beginning of 2009. "Setting a ceiling implies a commitment to prevent the currency from appreciating beyond a certain level, irrespective of the cost," Marcus said in a Financial Mail article. "It could have the unintended consequence of inviting speculators and others to test resolve or to see how deep the pockets are," she said, adding underlying problems of competitiveness could not be solved by the exchange rate alone.

An intensified push by Zimbabwe's government to force foreign-owned companies to turn over majority stakes to locals is being seen as politicking ahead of elections expected early next year and could end in a compromise to avoid a return to economic chaos. Ministers loyal to President Robert Mugabe's Zanu-PF party have been ramping up calls for foreign companies to relinquish control of 51% of their local operations to Zimbabweans, a move analysts say is linked to drumming up votes. The targeted companies range from the local unit of Britain's Barclays to Zimplats, owned by South Africa's Impala Platinum – the world's number-two platinum producer.

The Brics emerging economies are considering offering support to the euro area, possibly by buying bonds, although doubts emerged that a significant plan would materialise. A central bank adviser in China urged Beijing not to buy large amounts of euro area bonds and South Africa's Finance Minister suggested his country might not have the financial firepower to support a bond-buying plan. Greece, the most perilously placed euro-zone country, also expressed scepticism. Despite its shut-out from bond markets, Athens still holds monthly Treasury bill auctions to cover short-term borrowing needs.

Also making headlines:
The annual number of children who die before they reach age five is shrinking Unicef and the World Health Organisation said. President Jacob Zuma could not decide Co-operative Governance Minister Sicelo Shiceka's future before the Public Protector pronounced on his alleged abuse of state funds, the Presidency said. And, the head of a Kenyan commission formed to oversee the implementation of the country's new constitution criticised a Cabinet proposal to delay next year's elections, calling it an act of self-interest by politicians.

That’s a roundup of news making headlines today.