CAPTAINS OF INDUSTRY DOUBTFUL OF NEW SOUTH AFRICAN FINANCE MINISTER
Captains of industry say David van Rooyen will have a lot of ground to make up to restore investor confidence.
Former Merafong Mayor David van Rooyen has replaced Nhlanhla Nene as Minister of Finance.
Emily Corke
Eyewitness News
JOHANNESBURG – Captains of industry say the new Finance Minister David van Rooyen will have a lot of ground to make up to restore investor confidence both in South Africa and abroad.
President Jacob Zuma made the surprise announcement last night to fire Nhlanhla Nene.
The decision sent shockwaves through the markets and devalued the rand.
Zuma has also come under fire in a number of quarters for failing to explain the move.
The Economist's editor Jonathan Rosenthal said, “There are two key economic institutions; the Reserve Bank and Treasury and up until now they have both been incredibly well managed and we’ve had great finance ministers.”
Alexander Forbes' Edward Kieswetter says van Rooyen must now give investors an indication that they can trust his department.
“To give us some level of confidence that the overall policy direction will not be compromised because we can’t afford it.”
Intrepid Capital's Brigid Taylor says the move will have bad consequences on the bonds market.
“The reality we are seeing if we look at the reaction from the rand and the markets means that foreign investors are disinvesting quickly.”
FITCH CONCERNED
Ratings agency Fitch has joined the growing criticism of the decision to fire Nene.
It says the move has raised more negative than positive questions for the country.
Fitch expressed concern that the expenditure ceilings may be raised, saying it was closely watching government.
Last Friday, Fitch joined Standard & Poor’s which had already downgraded its rating to BBB-minus.
Standard & Poor’s revised the outlook on six financial institutions namely FirstRand Bank, Nedbank, Standard Bank, Investec and Capitec.
The agency also lowered its long-term South African National Scale ratings on a number of banks.
MARKETS
Despite a rough start this morning, the AllShare rose around 0.23 percent, but there was a substantial fall in banking and financial counters.
On a positive note, the gold index led the gains, surging 4.26 percent.
The Banking Association South Africa (Basa) said the removal of Nene is concerning in the light of Fitch’s downgrading its rating of the country to BBB-minus.
Managing director Cas Coovadia said the rating agencies cited the performance of treasury as positive, particularly efforts to curb spending.
“We have a budget deficit that is beginning to be worrying and we need to ensure that the expenditure is controlled and disciplined.”
Coovadia added that Nene has been replaced by someone who is not known by the markets or any other business sector and that this is not good for international ratings.
(Edited by Refilwe Pitjeng)
CRITICISM CONTINUES TO MOUNT OVER VAN ROOYEN’S APPOINTMENT
Cosatu's Sizwe Pamla says President Jacob Zuma has made a 'dangerous' decision.
David van Rooyen was sworn in as South Africa’s new Finance Minister on 10 December, 2015.
Govan Whittles & Stephen Grootes & Emily Corke
Eyewitness News
JOHANNESBURG – Union leaders from across the political spectrum have reacted with shock to the changing of the finance minister by President Jacob Zuma, with Zwelinzima Vavi calling for South Africa to stand up against the leadership, while Congress of South African Trade Unions (Cosatu) says it undermines certainty.
The African National Congress (ANC)’s alliance partner says it’s shocked and disappointed by the removal of Nhlanhla Nene and says the decision is ill-timed.
Zuma announced the appointment of David van Rooyen as the new minister, and stood beside him as he was sworn in at the Union Buildings this afternoon.
Cosatu's Sizwe Pamla says the president has made a ‘dangerous’ decision.
“To replace someone and not give adequate reasons with someone who is not necessarily experienced at a time when the economy is really in trouble; it’s a dangerous thing that has happened.”
Vavi believes Nene was punished for standing up to Zuma's allies in state owned enterprises.
“He was our political opponent but there is one thing we know about him; he was honest. It seemed to us that he’s being punished and he’s paying the price for standing up to the tsar.”
The ANC says the president doesn't need to explain his reasons for appointment or removing ministers.
PATRICIA DE LILLE THANKS NENE FOR HIS SERVICE
Cape Town Mayor, Patricia de Lille, earlier used her address in council to thank Nene for his service.
De Lille described Nene as a "constructive partner" in managing funds received by the city from National Treasury.
She says the former minister stood up for the right thing.
“We all know that he did these things against powerful political interests and it’s costing his career. We would like to thank him for his contribution.”
TRADERS COUNTING THEIR LOSES
With the JSE closed for the day traders are now counting their losses after a difficult day following the announcement of the new finance minister.
The banking sector appears to be hardest hit, with FNB and Standard losing about 13 percent of their share prices.
Political analysts say they will now also assess the possible fall-out from Zuma's decision.
Political analyst Ralph Mathekga says this could cement the perceptions some people have around the president.
“To have someone like this removed will add to the growing credibility crisis that faces Zuma’s administration will continue to experience.”
But it could also make life more difficult for the Gauteng ANC.
They are going to be chasing middle class votes in next year’s local government elections and councils like Tshwane and Johannesburg are already on a knife edge.
Meanwhile, Gauteng Premier David Makhura has refused to be drawn on Zuma's decision to fire Nene.
Makhura says he will not comment on decisions made concerning the national legislature.
“I’m not the head of national government so I don’t want to be drawn into that. I want to focus on what I can do in this province as the biggest economy in the country.”
(Edited by Refilwe Pitjeng)
RAND, MARKETS UNDER ‘EXTREME PRESSURE’
The announcement that Nene had been fired as finance minster sent shock waves through the markets.
Ray White
JOHANNESBURG – The rand and markets are under extreme pressure and the rand has battled to regain any ground this afternoon.
The local currency is trading at around R23,17 to the pound in comparison it broke through the R22 level just two days ago a massive increase.
It's now R15,30 to the dollar.
The announcement last night that Finance Minister Nhlanhla Nene had been fired sent shock waves through the markets this morning.
Earlier today, Fitch expressed concern that the expenditure ceilings may be raised saying it's watching the government very closely.
Economist Chris Hart says this is dangerous territory.
“Minister Nene was acting as the gatekeeper for huge expenditure demands that were placed on Treasury. He must not set himself up as the person to open the gates, they must remain shut because we have a spending problem.”
Despite a rough start this morning the Johannesburg Stock Exchange has managed to right itself.
The all share is slightly down 0.19 percent.
To look at the positives the weak rand has been a welcome boost for resources shares.
These companies earn their income in dollars so the poor exchange rate is welcome.
The resources index is up over four percent.
However the banking sector has taken a major knock as most major banks are down in double digits.
Standard and Poors revised the outlook of six financial institutions including FirstRand Bank, Nedbank, Standard, Investec and Capitec.
The agency also lowered its long-term South African national scale ratings of a number of banks.
Financials are down almost eight percent.
It remains to be seen if the new finance minister can restore confidence and fast.
ZUMA COMES UNDER CRITICISM
Meanwhile, as the rand battles to regain ground after Nene’s firing as finance minister, Zuma has come under fire in a number of quarters for his decision.
The South African Chamber of Commerce and Industry says it’s concerned, stating that decisions that affect confidence should be weighed up carefully.
The Johannesburg Chamber of Commerce and Industry says it’s seeking an urgent meeting with the president to discuss his decision.
Opposition parties including the DA, EFF, Cope and IFP have slammed the move with a number of parties describing the decision as ‘reckless’.
A number of economists polled this afternoon have questioned the new finance minister's ability to steady the economy and overall confidence.
There is general consensus that the collapse of commodity prices and public spending are two of the main challenges that will either make or break van Rooyen’s career.
(Edited by Refilwe Pitjeng)
Former Merafong Mayor David van Rooyen has replaced Nhlanhla Nene as Minister of Finance.
Emily Corke
Eyewitness News
JOHANNESBURG – Captains of industry say the new Finance Minister David van Rooyen will have a lot of ground to make up to restore investor confidence both in South Africa and abroad.
President Jacob Zuma made the surprise announcement last night to fire Nhlanhla Nene.
The decision sent shockwaves through the markets and devalued the rand.
Zuma has also come under fire in a number of quarters for failing to explain the move.
The Economist's editor Jonathan Rosenthal said, “There are two key economic institutions; the Reserve Bank and Treasury and up until now they have both been incredibly well managed and we’ve had great finance ministers.”
Alexander Forbes' Edward Kieswetter says van Rooyen must now give investors an indication that they can trust his department.
“To give us some level of confidence that the overall policy direction will not be compromised because we can’t afford it.”
Intrepid Capital's Brigid Taylor says the move will have bad consequences on the bonds market.
“The reality we are seeing if we look at the reaction from the rand and the markets means that foreign investors are disinvesting quickly.”
FITCH CONCERNED
Ratings agency Fitch has joined the growing criticism of the decision to fire Nene.
It says the move has raised more negative than positive questions for the country.
Fitch expressed concern that the expenditure ceilings may be raised, saying it was closely watching government.
Last Friday, Fitch joined Standard & Poor’s which had already downgraded its rating to BBB-minus.
Standard & Poor’s revised the outlook on six financial institutions namely FirstRand Bank, Nedbank, Standard Bank, Investec and Capitec.
The agency also lowered its long-term South African National Scale ratings on a number of banks.
MARKETS
Despite a rough start this morning, the AllShare rose around 0.23 percent, but there was a substantial fall in banking and financial counters.
On a positive note, the gold index led the gains, surging 4.26 percent.
The Banking Association South Africa (Basa) said the removal of Nene is concerning in the light of Fitch’s downgrading its rating of the country to BBB-minus.
Managing director Cas Coovadia said the rating agencies cited the performance of treasury as positive, particularly efforts to curb spending.
“We have a budget deficit that is beginning to be worrying and we need to ensure that the expenditure is controlled and disciplined.”
Coovadia added that Nene has been replaced by someone who is not known by the markets or any other business sector and that this is not good for international ratings.
(Edited by Refilwe Pitjeng)
CRITICISM CONTINUES TO MOUNT OVER VAN ROOYEN’S APPOINTMENT
Cosatu's Sizwe Pamla says President Jacob Zuma has made a 'dangerous' decision.
David van Rooyen was sworn in as South Africa’s new Finance Minister on 10 December, 2015.
Govan Whittles & Stephen Grootes & Emily Corke
Eyewitness News
JOHANNESBURG – Union leaders from across the political spectrum have reacted with shock to the changing of the finance minister by President Jacob Zuma, with Zwelinzima Vavi calling for South Africa to stand up against the leadership, while Congress of South African Trade Unions (Cosatu) says it undermines certainty.
The African National Congress (ANC)’s alliance partner says it’s shocked and disappointed by the removal of Nhlanhla Nene and says the decision is ill-timed.
Zuma announced the appointment of David van Rooyen as the new minister, and stood beside him as he was sworn in at the Union Buildings this afternoon.
Cosatu's Sizwe Pamla says the president has made a ‘dangerous’ decision.
“To replace someone and not give adequate reasons with someone who is not necessarily experienced at a time when the economy is really in trouble; it’s a dangerous thing that has happened.”
Vavi believes Nene was punished for standing up to Zuma's allies in state owned enterprises.
“He was our political opponent but there is one thing we know about him; he was honest. It seemed to us that he’s being punished and he’s paying the price for standing up to the tsar.”
The ANC says the president doesn't need to explain his reasons for appointment or removing ministers.
PATRICIA DE LILLE THANKS NENE FOR HIS SERVICE
Cape Town Mayor, Patricia de Lille, earlier used her address in council to thank Nene for his service.
De Lille described Nene as a "constructive partner" in managing funds received by the city from National Treasury.
She says the former minister stood up for the right thing.
“We all know that he did these things against powerful political interests and it’s costing his career. We would like to thank him for his contribution.”
TRADERS COUNTING THEIR LOSES
With the JSE closed for the day traders are now counting their losses after a difficult day following the announcement of the new finance minister.
The banking sector appears to be hardest hit, with FNB and Standard losing about 13 percent of their share prices.
Political analysts say they will now also assess the possible fall-out from Zuma's decision.
Political analyst Ralph Mathekga says this could cement the perceptions some people have around the president.
“To have someone like this removed will add to the growing credibility crisis that faces Zuma’s administration will continue to experience.”
But it could also make life more difficult for the Gauteng ANC.
They are going to be chasing middle class votes in next year’s local government elections and councils like Tshwane and Johannesburg are already on a knife edge.
Meanwhile, Gauteng Premier David Makhura has refused to be drawn on Zuma's decision to fire Nene.
Makhura says he will not comment on decisions made concerning the national legislature.
“I’m not the head of national government so I don’t want to be drawn into that. I want to focus on what I can do in this province as the biggest economy in the country.”
(Edited by Refilwe Pitjeng)
RAND, MARKETS UNDER ‘EXTREME PRESSURE’
The announcement that Nene had been fired as finance minster sent shock waves through the markets.
Ray White
JOHANNESBURG – The rand and markets are under extreme pressure and the rand has battled to regain any ground this afternoon.
The local currency is trading at around R23,17 to the pound in comparison it broke through the R22 level just two days ago a massive increase.
It's now R15,30 to the dollar.
The announcement last night that Finance Minister Nhlanhla Nene had been fired sent shock waves through the markets this morning.
Earlier today, Fitch expressed concern that the expenditure ceilings may be raised saying it's watching the government very closely.
Economist Chris Hart says this is dangerous territory.
“Minister Nene was acting as the gatekeeper for huge expenditure demands that were placed on Treasury. He must not set himself up as the person to open the gates, they must remain shut because we have a spending problem.”
Despite a rough start this morning the Johannesburg Stock Exchange has managed to right itself.
The all share is slightly down 0.19 percent.
To look at the positives the weak rand has been a welcome boost for resources shares.
These companies earn their income in dollars so the poor exchange rate is welcome.
The resources index is up over four percent.
However the banking sector has taken a major knock as most major banks are down in double digits.
Standard and Poors revised the outlook of six financial institutions including FirstRand Bank, Nedbank, Standard, Investec and Capitec.
The agency also lowered its long-term South African national scale ratings of a number of banks.
Financials are down almost eight percent.
It remains to be seen if the new finance minister can restore confidence and fast.
ZUMA COMES UNDER CRITICISM
Meanwhile, as the rand battles to regain ground after Nene’s firing as finance minister, Zuma has come under fire in a number of quarters for his decision.
The South African Chamber of Commerce and Industry says it’s concerned, stating that decisions that affect confidence should be weighed up carefully.
The Johannesburg Chamber of Commerce and Industry says it’s seeking an urgent meeting with the president to discuss his decision.
Opposition parties including the DA, EFF, Cope and IFP have slammed the move with a number of parties describing the decision as ‘reckless’.
A number of economists polled this afternoon have questioned the new finance minister's ability to steady the economy and overall confidence.
There is general consensus that the collapse of commodity prices and public spending are two of the main challenges that will either make or break van Rooyen’s career.
(Edited by Refilwe Pitjeng)
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