Latest news with #Cilliers
IOL News
3 days ago
- Business
- IOL News
Gold dips despite escalating Israel-Iran conflict as volatility looms
Gold, traditionally a safe haven for investors, has seen its value drop below $3,400 amid rising tensions between Israel and Iran. Experts warn of increased market volatility as geopolitical conflicts unfold. Image: File photo Gold – the metal investors flee to in times of turmoil – slipped below its Friday close on Tuesday even as the conflict between Israel and Iran escalated and market watchers warned of more volatility. The precious metal, long seen as a safe place to store money, was trading at around $3,394.49 as of lunch time on Tuesday, down 0.08% on its opening price. Andre Cilliers, currency strategist at TreasuryONE, said in a note that gold had dropped below Friday's close of $3,450 level despite these geopolitical tensions. The metal is still off its $3 500 record high in April. Cilliers said that US President Donald Trump's warning to Iranians to evacuate Tehran has raised fears of an escalation in the Iran/Israel conflict and is keeping markets on edge. 'Iran has warned that it will unleash the biggest ballistic missile attack on Israel in the next few days while Israel is targeting government facilities,' he noted. Bianca Botes, director at Citadel Global, has also cautioned that there may be 'heightened volatility as markets react to fast-moving developments in the Middle East.' Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ Information from axi indicated that gold was worth just under $19 an ounce in the years between 1833 and 1849, only moving above $1,000 in 2010. It stated that gold rose dramatically in January 1980, 'reacting not only to high inflation but also to geopolitical tensions with the Iranian Revolution and the Soviet Invasion in Afghanistan'. During the Global Financial Crisis of 2008, the metal soared more than 50% in just nine months to $1,011 an ounce. Concerns over the economic impact of the COVID-19 pandemic pushed the metal past $2,000 and it pushed higher again in 2023 when central banks started a rate-hiking cycle. On Monday, the rand closed 1.7% stronger at R17.81, even though trade was thin due to the holiday. It opened at R17.82, and was trading at R17.83. Cilliers expected a range of R17.70/R17.90 as traders watch the Middle East developments. IOL
IOL News
3 days ago
- Business
- IOL News
Gold dips despite escalating Israel-Iran conflict as volatility looms
Gold, traditionally a safe haven for investors, has seen its value drop below $3,400 amid rising tensions between Israel and Iran. Experts warn of increased market volatility as geopolitical conflicts unfold. Image: File photo Gold – the metal investors flee to in times of turmoil – slipped below its Friday close on Tuesday even as the conflict between Israel and Iran escalated and market watchers warned of more volatility. The precious metal, long seen as a safe place to store money, was trading at around $3,394.49 as of lunch time on Tuesday, down 0.08% on its opening price. Andre Cilliers, currency strategist at TreasuryONE, said in a note that gold had dropped below Friday's close of $3,450 level despite these geopolitical tensions. The metal is still off its $3 500 record high in April. Cilliers said that US President Donald Trump's warning to Iranians to evacuate Tehran has raised fears of an escalation in the Iran/Israel conflict and is keeping markets on edge. 'Iran has warned that it will unleash the biggest ballistic missile attack on Israel in the next few days while Israel is targeting government facilities,' he noted. Bianca Botes, director at Citadel Global, has also cautioned that there may be 'heightened volatility as markets react to fast-moving developments in the Middle East.' Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading Information from axi indicated that gold was worth just under $19 an ounce in the years between 1833 and 1849, only moving above $1,000 in 2010. It stated that gold rose dramatically in January 1980, 'reacting not only to high inflation but also to geopolitical tensions with the Iranian Revolution and the Soviet Invasion in Afghanistan'. During the Global Financial Crisis of 2008, the metal soared more than 50% in just nine months to $1,011 an ounce. Concerns over the economic impact of the COVID-19 pandemic pushed the metal past $2,000 and it pushed higher again in 2023 when central banks started a rate-hiking cycle. On Monday, the rand closed 1.7% stronger at R17.81, even though trade was thin due to the holiday. It opened at R17.82, and was trading at R17.83. Cilliers expected a range of R17.70/R17.90 as traders watch the Middle East developments. IOL
Daily Maverick
09-06-2025
- Business
- Daily Maverick
The strategic reforms that could transform South Africa's economy
The key is to break the strangleholds that Eskom and Transnet have on our electricity, ports and railways. Introducing real competition into electricity generation and the operation of ports and railways is the key to unlocking real growth in South Africa's stagnant economy. So said Deputy Finance Minister Ashor Sarupen at a seminar organised by the In Transformation Initiative last week, where Jakkie Cilliers, head of the African Futures unit at the Institute for Security Studies (ISS), presented the unit's latest report, co-written with Alize le Roux, which forecasts SA's growth trajectory to 2043. The seminar pondered why, despite the creation of a government of national unity (GNU) last June and the virtual end of load shedding, the South African economy only grew by a miserly 0.1% in the first quarter of 2025. Cilliers said South Africa was caught in a 'classic upper middle income growth trap'. From 1990 until 2025, South Africa's economy had grown by an average of 2.3% a year, and on its current path, without significant reforms, he forecast it would grow at an average 2.4% annually from now until 2043. That would expand GDP from about $402-billion in 2025 to about $628-billion in 2043, in constant 2017 US dollars. This 'slow but steady growth' would not be enough to dent poverty. It would barely keep pace with the population, which the unit forecast would expand from about 65.5 million in 2025 to about 77 million in 2043. Cilliers said annual GDP per capita would therefore rise from $12,600 in 2025 to about $14,700 in 2043 — with South Africa falling behind the rest of the world (except Africa) where he forecast average annual GDP per capita would climb from $20,300 in 2025 to $28,500 in 2043. He noted that on its current development trajectory it would take South Africa until 2037 to return to the peak GDP per capita of $13,800 that it reached in 2013. South Africa had been stagnating for years, with steady deindustrialisation, weak investment, and a growing dependence on social grants undermining growth, particularly during the Jacob Zuma presidency, Cilliers said. Cilliers noted that 740,000 South Africans entered the labour market every year, and because of slow growth and a very capital-intensive economy the number of unemployed people increased annually. In 2023, the International Labor Organization (ILO) found that South Africa had the highest unemployment rate globally after only Eswatini. Because being part of the informal sector is considered 'work' by the organisation, South Africa's relatively small informal sector contributed to this high percentage. In South Africa, only about 18% of the labour force is employed in the informal sector. Cilliers noted that about 62% of South Africans were now living below the World Bank's poverty datum line for upper middle income countries, of $6.85 per person a day. On South Africa's current economic path, that percentage would decline 'modestly' to 58% in 2043, though the absolute number of people living below that poverty datum line would increase, from some 40.9 million in 2025 to 44.4 million in 2043 (because the overall population would rise). Cilliers said South Africa should now be reaping a 'demographic dividend' because its ratio of working age population – aged 15 to 64 — to its dependent population (children and elderly) had now reached 2.1. In the African Futures calculations, the demographic dividend should kick in when the ratio of working people to dependents reached 1.7. he said, Economic growth stunted by poor human capital But South Africa was not earning this dividend largely because economic growth was being stunted by poor human capital, mainly an unhealthy population, many of whom were still afflicted by HIV/Aids and tuberculosis and low-quality education. The question, he said, was why South Africa did so poorly on social capital, education and health, given the very high levels of expenditure on those services. 'And the only answer that you can come up with is government inefficiency, the poor use of existing funds. And the question is, how do we escape the middle-income trap?' Cilliers asked. He said the African Futures team had modelled the effects of reforms in eight different sectors on South Africa's economic development. These were demographics and health; agriculture; education; manufacturing; infrastructure and 'leapfrogging' (i.e. bypassing older technologies); free trade; financial flows; and governance. They found that the largest return was from increased manufacturing, followed by freer trade and then better governance. So, for instance, all eight sectors combined would increase GDP per capita in 2043 by about 33%, from the $ 14,750 on the current path to $19,650. Of this, increased manufacturing would contribute about $930; freer trade (with the full implementation of the African Continental Free Trade Agreement) would contribute about $900; and better governance about $800. The combined impact of those eight reforms would decrease the percentage of South Africans living below the $6.85 a day poverty rate to 50% by 2043, down from 62% in 2023. This would represent 6.1 million fewer poor people than if the economy remained on its current path, though still leaving South Africa with a large poverty burden, Cilliers said. The African Futures team had compiled a laundry list of recommendations, starting with the need to strengthen governance and accountability through evidence-based policies, curtailing corruption and increasing accountability and inclusivity. Deputy Finance Minister Sarupen, of the DA, said much of Cilliers' analysis resonated with assessments by the Treasury's own economic policy team and the work being done by the government's Operation Vulindlela and by various parties in the GNU. He agreed that merely 60% growth in the size of the economy over the next two decades 'will not get us out of the trap that we're in' and that South Africa was in danger of falling from upper middle to lower middle income status. Structural constraints The low growth was driven by structural constraints, weak productivity, low investment in capital, higher inequality and an underperforming formal labour market. The Treasury was 'acutely aware of this'. But he said the government had to prioritise its reforms to tackle the problem because of the many competing demands of a massive amount of social ills and a very strong active civil society. He noted that South Africa had a system of fairly autonomous government ministries that made it harder to pursue coherent policies. Cilliers had identified manufacturing and freer trade as South Africa's best paths forward. Sarupen noted that cheap reliable energy with stability of pricing and supply underpinned manufacturing and industrialisation . 'And one of the drivers of our de-industrialisation has been excessive pricing and inefficiency of supply that really hurts manufacturing in South Africa,' he said. He noted that while prices in the rest of the economy had risen 196% since 2009, Eskom's prices had increased by 403%. So Eskom was driving inflation and deterring investment. Sarupen added that part of the reason GDP growth had been so low over the past year, despite an end to load shedding, was because companies had sunk so much money into load-shedding-proof themselves over the past few years that they had not spent enough on actual business expansion and employment. Sarupen also noted that free trade — another key reform advocated by Cilliers — 'requires you to be able to actually move goods and services cheaply and easily around, so the logistics reforms need a lot of depth and need to maximise competition. 'And so in the reform process that we're undergoing we need to be careful to not just bring the private sector into Transnet's monopoly structure. But rather how do we create competition, across multiple ports for example.' Likewise, South Africa had to maximise competition in railway freight lines. He agreed with Cilliers that crime had to be tackled much better as it was discouraging investment as well as acting as a deterrent to economic activity inside South Africa because, for example, citizens were fearful of using public transport to go to work. Rule of law He said the rule of law was the foundation of all other economic reforms, followed by macroeconomic stability, and then better education and health, and only after that global competitiveness and industrial masterplans. Sarupen did note though that South Africa's foundation of macroeconomic stability was 'probably one of our saving graces'. He also said that the government had to reduce debt. He noted that about 90% of South Africa's debt was denominated in rands, and about 75% of that was purchased by domestic markets. Rand debt was generally better than debt in foreign currency but the scale of government borrowing, about R300 to R400-billion a year, was crowding out the amount of capital that could be invested in business ventures and therefore growth. He added that the relatively high premium of about 11% on a 10-year South African Government Bond was discouraging businesses from investing in riskier ventures. He noted that many of the investments in this year's controversial national Budget were important — such as in public transport. He said, for example, that while a lower income worker in Vietnam earned a similar wage to a lower income worker in South Africa, the Vietnamese worker spent about 10% of his or her income on transport, the South African workers spent around 50%. 'People are going to work to earn money to be able to go to work,' he said. And this was diverting money away from workers buying goods and services, which was essential for economic growth. DM
IOL News
07-05-2025
- Business
- IOL News
Rand fluctuates amid escalating India-Pakistan tensions
On Wednesday morning, amid escalating tensions between India and Pakistan, India launched military strikes on targets in Pakistan, meeting a strong response from the latter. Image: Ai The local currency has lost some ground as India and Pakistan fire targets at each other, dropping some 20c between its New York close and mid-morning on Wednesday. On Wednesday morning, amid escalating tensions between India and Pakistan, India launched military strikes on targets in Pakistan, meeting a strong response from the latter. Andre Cilliers, currency strategist at TreasuryONE, said the rand, which had traded below the R18.15 level in New York on Tuesday night, was at R18.34 mid-morning on Wednesday as risk sentiment slips on the back of the Indian attack on Pakistan. Cilliers added that long rand positions have also been trimmed ahead of the Federal Reserve's interest rates decision, which will be out overnight. Anchor Capital's chief investment officer, Nolan Wapenaar, said the company was watching South Africa's terms of trade and a returning risk appetite from global investors. China, South Africa's largest trading partner, officially said that it 'finds India's military operation early this morning regrettable'. China and India and both major trading partners with South Africa, with all three member countries of the original Brazil, India, Russia, China and South Africa trading bloc, which was expanded last year to include other emerging markets. South Africa's largest trading partner is China, with South Africa's total bilateral trade with China soaring from $1.34 billion in 2000 to $34.18 billion in 2023, according to the Institute of Security Studies. Meanwhile, The Observatory of World Economy stated that, in February this year, that trade between India and South Africa was worth close on $1bn. The firefight between India and Pakistan did not, however, drop the value of the rand to the one-month low seen on April 8, when it went about the key R19 level on the back of US President Donal Trump's tariff announcements and subsequent 90-day pause on their implementation. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕
Reuters
25-04-2025
- Business
- Reuters
South African rand stable as investors await budget clarity
JOHANNESBURG, April 25 (Reuters) - South Africa's rand was little changed in early trade on Friday as investors awaited clarity on a disputed national budget which has roiled domestic markets in recent weeks. At 0644 GMT, the rand traded at 18.82 against the dollar , near its Wednesday closing level of 18.81. "This morning, the rand is quoted softer ... we expect to see some consolidation between R18.60 and R19.00 ahead of the long weekend," said Andre Cilliers, currency strategist at TreasuryONE. South Africa's biggest political parties have clashed over a proposal to raise the value-added tax (VAT) rate by one percentage point over the next two years. The VAT increase was withdrawn on Thursday and domestic-focused investors seek clarity on the details of the budget. "The scrapping of the VAT increase and the subsequent questions on where Treasury is going to find the shortfall in the budget has put the rand under some renewed pressure," Cilliers said. Like other risk-sensitive currencies, the rand often takes its cue from global factors and domestic drivers. In addition to the budget spat, the rand has experienced bouts of volatility linked to uncertainty over U.S. President Donald Trump's tariff plans. South Africa's benchmark 2030 government bond was stronger in early deals, with the yield down 2.5 basis points to 8.845%.
