| Financial System, Markets
and Instruments, Monetary Policy, Business Understanding
South African Financial Markets, Cecilia
van Zyl; Ziets Botha; Peter Skerritt; Ingrid Goodspeed
3rd edition, 2009
|
|
Topical:
Surprise December trade surplus
The
trade account surprised with a sizeable trade surplus in December of
R3.668bn from a deficit of R2.474bn in November. Cumulatively,
however, the deficit narrowed to R25.838bn in 2009 compared to a
massive deficit of R71.633bn in 2008. During the month, exports
decreased by a substantial 1.1% m/m (R0.494bn) to R45.361bn. Ten of
the 23 categories reflected increase during the month with substantial
gains reported in the following categories: vegetable products
increased by 96% m/m and mineral products increased by 25% m/m.
Exports of precious and semi-precious stones and metals increased by a
mild 1% m/m. Losses in exports were recorded for vehicles, aircraft
and vessels which decreased by 32% m/m while base metals and articles
declined by 9% m/m. Imports decreased by a substantial 13.7% m/m or
R6.638bn in December. Twenty of the 23 categories reflected declines
and noted in the following components: original equipment and
components (-42% m/m), vegetable products (-39% m/m), base metals and
articles thereof (-30% m/m), plastics and rubber articles (-23% m/m)
and machinery and electrical appliances (-22% m/m). Imports of mineral
products, however, increased by 20% m/m.
|
For
information on institutions active in financial markets, e.g. the JSE
Securities Exchange, banks and brokers, see the section on Financial
institutions.
|
|
|
|
|
|
|
Information
on the SA budget is indexed in the Economic
information section |
January
2010 |
SA Reserve
Bank - Statement of the Monetary Policy Committee |
|
|
... The
year-on-year inflation rate as measured by the consumer price index
(CPI) for all urban areas declined from 6,1 per cent in September 2009
to 5,9 per cent and 5,8 per cent in October and November respectively.
The categories of housing and utilities, and miscellaneous goods and
services remained the single biggest contributors to the inflation
outcome in November, having contributed 1,7 and 1,5 percentage points
respectively. These categories were mainly driven by electricity and
insurance cost increases. Food price inflation continued to moderate,
and measured 4,0 per cent in November, while administered prices
excluding petrol and paraffin increased by 11,0 per cent, primarily as
a result of electricity price increases.
Producer prices declined at year-on-year rates of
3,3 per cent and 1,2 per cent in October and November respectively.
The underlying producer price trends in the food sector remained
favourable for further moderation in food price inflation at the
consumer level. In November, agricultural prices increased at a
year-on-year rate of 0,9 per cent, while manufactured food prices
declined by 1,1 per cent. ...
Monetary policy stance: The MPC noted that inflation is likely to
remain close to the upper end of the target range over the forecast
period, and is of the view that the risks to this outlook are fairly
evenly balanced. Electricity price increases pose the biggest upside
risk, counteracted by the weak state of domestic demand. Against this
background the MPC has decided to keep the repurchase rate unchanged
at 7,0 per cent per annum. ... more
Also see
Monetary
Policy Alert (PDF) from Standard Bank
MPC meetings during 2010 are scheduled for: 25 & 26 January 2010;
24 & 25 March 2010; 12 & 13 May 2010; 21 & 22 July 2010; 8
& 9 September 2010; and 17 & 18 November 2010.
The eight-member
Monetary Policy Committee (MPC) comprises the Governor, Ms
Gill Marcus; the Deputy Governors, Dr XP Guma, Dr Renosi Mokate; and Mr A.D. Mminele;
the Executive General Managers,
Mr Bertus van Zyl and Dr M. Mnyande; and Mr Brian Kahn, Senior Deputy Head: Research and Policy
Development, Research Department.
|
November
2009 |
SA Reserve
Bank - Monetary Policy Review |
|
|
There are signs
that the global economic recovery is under way, although indications
are that the initial pace of recovery is likely to be slow and
distributed unevenly across countries. The severe global recession saw
a synchronised contraction of advanced economies and a significant
slowdown in the growth of developing economies. However, recent
forecasts suggest a turnaround in the second quarter of 2009, and
stronger growth prospects for the second half of the year and for
2010. Nevertheless, activity levels are likely to remain well below
pre-crisis levels and important policy challenges will need to be
faced. Macroeconomic policies are expected to continue to focus on
restoring financial sector health and supporting the recovery until it
is well established, while preparing to exit the period of eased
monetary conditions adopted in response to the crisis.
The domestic economy was not spared the effects of the global
recession. In the second quarter of 2009 the economy recorded a third
successive quarterly contraction, although the rate of contraction
slowed relative to that of the previous quarter. Consistent with
global growth developments, domestic economic growth is expected to
improve in the coming quarters. Domestic inflation has continued to
trend downwards, reaching a level just above the inflation target
range in September 2009. ... more |
|
June
2009 |
Bank
for International Settlements - Annual
Report 2008/09 |
|
In its 79th
Annual Report, the BIS looks at the narrow path ahead leading out of
the financial crisis. The Report underlines the need to focus clearly
on the medium term and on sustainability when designing both
macroeconomic and financial policy responses. The report was presented
at the Bank's Annual General Meeting in Basel, Switzerland on 29 June
2009. |
|
April
2009 |
Bank
of England - Rethinking
the Financial Network 
(PDF) |
|
Andrew Haldene,
Executive Director, Financial Stability, Bank of England, produced an
interesting paper which considers the financial system as a complex
adaptive system. It applies some of the lessons from other network
disciplines - such as ecology, biology and engineering - to the
financial sphere. Peering through the network lens, it provides a
rather different account of the structural vulnerabilities that
built-up in the financial system over the past decade and suggests
ways of improving its robustness in the period ahead. |
March
2007 |
SA Reserve
Bank - Macroeconomic
Policy Challenges for South Africa Conference, 22-24 October
2006 |
|
The following
conference papers have been provided:
 | Forword |
| Message of the Chairperson |
| Global financial imbalances and their resolution:
Implications for financial stability by David T Llewellyn |
| Sustainable macroeconomic balance and the
implications for monetary policy in South Africa by Iraj Abedian |
| A New Keynesian Phillips Curve for South Africa
by Stan du Plessis |
| The South African current account in the context
of South African macroeconomic policy challenges by Ben Smit |
| The impact of oil price shocks on the South
African macroeconomy: History and prospects by Jeremy J Wakeford |
| Why speed doesn't kill: Learning to believe in
disinflation by E Schaling |
| Potential screening in South Africa’s labour
market Steven F Koch |
| South Africa's role in macroeconomic convergence
in SADC by Jannie Rossouw |
| A vision for electronic card payments by Nick
Essame |
| Economic policy framework and asset price
dynamics by Nicola Viegi |
| Signalling currency crises in South Africa by
Tobias Knedlik |
| The relationship between South Africa's
macroeconomic stabilisation policies and the performance of the
various asset classes by Chris Harmse |
|
August
2004 |
E van der
Merwe, SA Reserve
Bank - Inflation targeting in South Africa |
|
Economists generally agree
that monetary policy should be primarily concerned with the pursuit of
price stability. However, they still differ on how this objective can
be achieved most effectively. This debate remains unresolved, but a
growing number of countries have adopted inflation targeting as their
monetary policy framework. In 1990 New Zealand was the first country
to implement this strategy. In February 2000 it was announced that
formal inflation targeting would also be adopted in South Africa as
the monetary policy framework. Before this announcement “informal
inflation targeting” was already applied by the South African
Reserve Bank. |
|
November
2002 |
GR Wesso, SA Reserve
Bank - Broad money demand and financial
liberalisation in South Africa |
|
Financial liberalisation and
changes in the technology of payments and settlements have led to
large volatilities in money demand worldwide. The South African
economy has also undergone a number of important structural changes
during the past two decades, including the relaxation of exchange
controls, financial innovations and the integration of the South
African financial market into the global financial markets. This may
have caused money demand functions to become structurally unstable. A
fixed-coefficient error-correction model for broad money demand (M3)
in South Africa was developed for the period 1971:1 to 2000:4. |
|
October
2005 |
SA
Reserve Bank - System
of Accommodation |
|
|
The main reason for the
operations of the South African Reserve Bank in the money market is to
implement the Bank's interest rate policy as determined by the
Monetary Policy Committee (MPC), with the aim of achieving the Bank's
inflation target. In its monetary operations, the Bank endeavours to
promote financial stability by managing the liquidity needs of the
banking system as a whole. It also contributes to the development and
efficiency of the domestic financial markets, in particular the
interbank market.
This is the ninth in a series of fact sheets on the South African
Reserve Bank |
January
2007
|
ABSA Bank - Sectoral
Financial Ratios, 1997-2006 |
|
Financial ratio analysis can be used
to compare the performance of one company with that of another in the
same sector, or to compare a company with the entire sector in which
it operates, or even to compare various sectors with each other, as is
the case in this publication.
Financial ratios are
calculated for each of thirty-seven JSE sectors over the
past ten years, except for the banking and life assurance sectors. These ratios are divided into six
categories: asset structure; funding structure; solvency
and liquidity structure; profitability structure; trading
activity structure; and share statistics. |
August
2006 |
Competition
Commission - public Banking
Enquiry |
|
Following
on the findings in the research report The National Payment System and
Competition in the Banking Sector, the Commission announced earlier
this year that it would hold an enquiry in terms of Section 21 into
particular aspects of competition in banking. The enquiry has now
commenced and is to be conducted for the Commission by a panel,
appointed by the Competition Commissioner, consisting of Mr Thabani
Jali (Chairperson), Mr Oupa Bodibe, Mrs Hixonia Nyasulu and Mr Rob
Petersen SC.... more |
August
2006 |
Finweek
Magazine - Report
on Bank Charges
(PDF, 1 900 KB) |
|
As
per the findings, when compared to Deloittes II, this year’s bank
charges increased by 15% on a ‘Pay As You Use’ basis and decreased
by 1% on the ‘Electronic Pricing’ package. ... more |
|
April
2006 |
South African
Reserve Bank - National Payment System Vision
2010 |
|
The first vision
for the National Payment System, was provided in 1995, This updated
vision contains strategic guidelines for the national payment system.
Entitled Vision 2010, the document provides high-level strategic
guidance for stakeholders, such as banks and non-bank participants, as
new and complex challenges face the national payment system and its
stakeholders.
The Vision addresses many of the issues raised in the report of the
Competition Commission, below, released at the same time. |
April
2006 |
Competition
Commission - The
National Payment System and Competition in the Banking Sector |
|
The report
presents a comprehensive analysis of the national payment system
(NPS). It reveals that the South African NPS is a highly efficient and
sound system and perhaps more advanced than similar networks in more
economically developed countries. But an efficient and sound system
may nevertheless lack features which would make it also fair to
consumers. The report raises a number of concerns in this regard, and
provides some pointers. |
|
September
2003 |
Economic
Society of South Africa - The
Suitability of Dollarisation as an Exchange Rate Regime for South
Africa
(PDF, 205 KB) |
|
Conference paper. Countries
dollarise because of a lack of policy credibility and to obtain
monetary and economic stability by importing it from another country.
Although dollarisation may be suitable for some emerging countries,
South Africa does not belong to this group. The country suffers
neither from hyperinflation or continuous high inflation, nor from
policy incredibility. It furthermore has a low inflation pass-through,
a high level of integration in world financial markets, but does not
have a dominant trading partner or trade block. |
|
September
2001 |
Patrick Meagher and Betty
Wilkinson - Filling
the Gap in South Africa’s Small and Micro Credit Market: An Analysis
of Major Policy, Legal, and Regulatory Issues
(PDF) |
|
A report for the IRIS Center,
University of Maryland, submitted to the Micro Finance Regulatory
Council of South Africa (see the Regulation
& legislation section). The analysis describes small and
micro credit provision - in particular South Africa’s unique
microloan market - and addresses major issues that have emerged as
potential stumbling blocks in the country’s efforts to ensure
financial services to those who need them most. The paper outlines
some possible policy responses based on international “best
practices,” including the core elements of an institutional
framework for market governance and deepening.
Related entry: SMEs' Access to Finance in South Africa: A
Supply-side Regulatory Review, indexed in the Regulation
& legislation section. |
|
January
1999 |
World Bank
- Microfinance
Handbook: An Institutional and Financial Perspective |
|
The purpose of
this handbook is to bring together in a single source guiding
principles and tools that will promote sustainable microfinance and
create viable institutions. It provides a comprehensive source for the
design, implementation, evaluation, and management of microfinance
activities. The book has three parts: Part 1 takes a macroeconomic
perspective toward general microfinance issues and is primarily
non-technical. Part 2 narrows its focus to the provision of financial
intermediation, taking a more technical approach and moving
progressively toward more specific (or micro) issues. Part 3, the most
technical part of the handbook, focuses primarily on assessing the
financial viability of microfinance institutions. |
|
JSE
- Understanding
Warrants |
|
Describes:
| What are warrants? |
| Important aspects of warrants Types of warrants |
| Issuers of warrants |
| Trading and settlement warrants |
| How to start trading warrants |
| Risks in trading in warrants |
| The evaluation of warrants |
|
| |
SA Reserve Bank - The SA National Payment
System |
| |
The National Payment System is a broad
concept, which not only entails clearing systems, but
encompasses the total payment process - all the systems,
mechanisms, institutions, agreements, procedures, rules,
laws, etc. that come into play from the
moment an
end-user issues an instruction to pay another person or a
business, through to the final settlement between banks
at the SA Reserve Bank. The NPS thus enables the
circulation of money, i.e. it enables transacting parties
to exchange value.
The National
Payment System Act is provided.
The SA Payment Systems is described in the "Green Book" -
see The Africa Region
section.
E-money is an important
component of e-commerce - see the position of the SA
Reserve Bank on
Electronic Money. |
|
January
2004 |
Werkmans - Business
Guide to South Africa |
|
This publication
gives a brief overview of the investment climate, taxation, forms of
business organisation and business, accounting and legal practices in
South Africa. It reflects the general position in South Africa as at
September 2003, unless otherwise indicated. |
January
2004 |
Cliffe Dekker
- The
Way to BEE |
|
This guide
highlights some of the issues that businesses must face in meeting the
challenge of empowerment.
|
|
October
2002 |
Cliffe Dekker
- Commentary: Electronic
Communications and Transactions Legislation |
|
In August 2002, South Africa's
President Thabo Mbeki signed the controversial Electronic
Communications and Transactions Bill into law.
Cliffe Dekker has prepared a commentary on the bill. See the Electronic
Communications and Transactions Act, 2002 (PDF; 2,7MB).
This is of interest to the South African IT industry and individuals
and companies in all sectors and around the world as they embark on
electronic commerce projects. Whenever you access a website or send an
e-mail or entertain a visitor to your own website or send a fax and
the other party is located in another legal jurisdiction, then your
action could potentially fall under the laws of that jurisdiction. The
issues and topics associated with the South African Act are pertinent
to legislation elsewhere.
This legislation fills an important void, particularly in the area of
electronic contracts, but there are concerns that some aspects are not
dealt with in sufficient detail, while other topics covered in the
much-debated Green paper have been excluded from the
legislation.
See the Electronic
Communications and Transactions Bill (PDF; 2,6MB) and also the Green Paper
(PDF) and, because e-money is an important
component of e-commerce, the position of the SA
Reserve Bank on Electronic Money.
|
Books and information
|
|
Understanding
South African Financial Markets
van Zyl, Botha & Skerritt
2nd edition, 2006 |
|
|
A reference and
guide for commerce students, public servants and the business
fraternity, giving an overview of how the various institutions in the
South African financial system operate as well as of the different
financial markets in the economy and the instruments traded in those
markets.
Contents: Rudiments of the South African financial system; The South
African Reserve Bank; Banks; Microfinance institutions; Regulation of
the financial markets; Insurers; Retirement funds; Investment
institutions; Risk and return; The money market; The bond market; The
share market; The foreign exchange market; and Derivatives. |
