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SA consumer prices rises 4.6% in June

Statistics South Africa confirmed that consumer inflation has increased to 4.6% in June from 4.4% in May, which is due to a hike in housing, utilities and transport costs.

Stats SA informed that on a month-on-month basis, inflation rose to 0.4% in June from 0.2% in May.

Stats SA’s Patrick Kelly said “Price increase have been reported in the non-alcoholic beverages category and fish prices were up to 7.5% over the same period. The petrol price increased by 82c a litre in June and the annual fuel inflation now stands at 16%.”

Bloomberg said that the rand had its worst month in more than two years in June as the U.S. and China exchanged tariff blows at a time when the prospect of rising.  American rates also weighed on emerging-market assets.

The weaker currency and higher oil prices added upside risks to inflation in Africa’s most-industrialized economy.

Economist at BNP Paribas SA, Jeffrey Schultz said South African Reserve Bank (SARB) isn’t going to be in a rush to raise rates.

“We’ve had five months where headline inflation has undershot expectations, and this is likely to neutralize some of the hawkish tones from the central bank” added Schultz.

Source: Bloomberg

Two Indian-origin women on Forbes list of America’s richest self-made women

Two India-origin women have made it to the Forbes’ list of America’s 60 richest self-made women.

President and CEO of a computer networking firm Arista Networks, Jayshree Ullal is ranked 18th in the list of 60 self-made women, having a net worth of 1.3 billion dollars.

Her career began with engineering and strategy positions at Advanced Micro Devices and Fairchild Semiconductor.

Ullal was born in London and raised in New Delhi India, she is now one of America’s wealthiest female executives.

Forbes said: “America’s top female entrepreneurs have shattered ceilings and scaled new heights, creating companies and building fortunes in everything from genetic testing to aerospace. Increasingly these self-made starters are tapping social media to cement their brands and build businesses ever more quickly”. 

Neerja Sethi is the vice president of IT consulting and outsourcing company Syntel, a company she co-founded with her husband Bharat Desai in 1980 in their apartment in Troy, Michigan.

She is ranked 21st on Forbes’ list of America’s 60 richest self-made women with a net worth of one billion dollars. 

Forbes added that Syntel racked up USD 924 million in 2017 revenues and has 23,000 employees, 80% of whom are in India.

Source: Forbes

A budget breakdown of the spending for FIFA World Cup 2018

The Russians have invested billions of dollars to host the 2018 FIFA World Cup, and the event will make FIFA hundreds of millions in profits. The Russian Government had budgeted $11.6 billion on projects for the World Cup which is less than the estimated $15 billion spent by Brazil on the 2014 World Cup. Construction and preparation for the World Cup has cost Russia an estimated $11.8 billion, according to USA Today, with more than 70 percent of the spending coming from public funding.

 

FIFA will top $6 billion for the four-year commercial cycle tied to this World Cup, beating its $5.656 billion target. The World Cup is the main source of FIFA income, FIFA gets its profits from broadcasting revenue, sponsorships and ticket sales. Ahead of the 2018 World Cup FIFA had four deals from Russia, three with Russian State-owned firms; three Chinese sponsors; none from the Americas or Africa and the Middle East.

 

Teams will win portions of the $400 million in total prize money, according to FIFA. The winner will get $38 million and runner-up $28 million, the 16 teams going home after the group phase will each get $8 million. FIFA has budgeted spending $791 million on teams and players for prize money, club compensation, insurance for players injured on national-team duty, and preparation costs for 32 squads. Clubs providing players will share $209 million from FIFA. A daily rate of $8,530 for the official involvement of 736 players is shared among each club they were registered with in the two previous years.

 

(Source: The Indian Express)

Ethiopia privatises seven state-owned enterprises

The Ethiopian government has accepted bids worth $121 million for their state-owned enterprises, this includes the best airline in Africa, Ethiopian Airlines and telecom. The Privatisation and Public Enterprise Supervising Agency has accepted an 860 million birr bid from MIDROC Ethiopia for one of the country’s biggest farms, Upper Awash Agro-Industry Enterprise.

 

Another company that won the bids is Horizon Plantation PLC, National Mining Corporation and Saudi Star Agricultural Development who won bids for four other firms for a combined 463 million birr ($26.7 million).

Last year, the government sold its last remaining breweries Bedele, Harar and Meta Abo to Heineken and Diageo for a combined $388.3 million.

 

Source: (Africa News)

Report: India has one decade to become a developed nation

India’s largest lender the State Bank of India (SBI), released a report stating that India needs to become a developed nation in one decade, or suffer the negative consequences of having a huge demographic dividend.

The report also states that India may never enter into a state of development if it doesn’t act immediately. They calculate that India has a 10 year time span to move into the developed country label or it may be trapped as developing nation in perpetuity.

It further goes on to state that more focus on youth and education investment by the government will help to achieve this goal. Currently, India’s demographic surplus is the main reason for economic growth, but there are already warning signs that by the year 2030 it may lead to problematic issues. For instance, the sluggishness of the population growth in last 20 years, as well as the unpredictability of the fertility rate across India.

The coastal state of Karnataka is one of these cases of low birth rate, resulting in an increase of people over the age of 60 to 9.5 percent in 2011. A lower population growth, increase the wealth of certain demographics of the population who then move from government services to private services, like government schools to private schools, which has an adverse effect of lowering the quality of government schools due to lack of funding. For this reason, calls for more educational funding is need in India for the population that cannot afford to migrate services.

Source: moneycontrol.com

Chinese Technology Giant ZTE suffers shares fall

Chinese Technology giant ZTE, was found by the US Commerce Department in April to have violated trade bans with North Korea and Iran. Following the findings, the company was banned and prevented from buying any parts from the United States suppliers.

This ban forced ZTE to suspend major operations which led to trading in its shares to be halted in April. Last week, the US reached a deal with the Chinese company that would remove the ban. Some of the conditions to the deal is for the company to pay $1 billion penalty, hire a US-approved compliance team and to replace its management board.

ZTE, is China’s second biggest telecoms maker based in Shenzhen. The company depends on US-made components for the production of handsets. The firm’s share were down by 10% in the early trade in Shenzhen, which is the maximum allowed on the mainland.

However, the US Senate leaders are expected to vote later this week on an amendment to a bill that could block the agreement between the Trump administration and ZTE.

 

(Source: BBC News)

How to Grow and Develop Small Manufacturing Businesses

With the onset of pioneering innovations in the manufacturing sphere, prospective business owners are often faced with a plethora of questions when contemplating how to break into this sector. To answer and address the most pressing questions and concerns regarding the development of small manufacturing units, a team of manufacturing pundits and entrepreneurs are to gather at the Small Business Indaba. This event will feature alongside the Manufacturing Indaba 2018, to be held at the Sandton Convention Centre in Johannesburg, Africa’s economic hub, on the 19th and 20th of June 2018.

Business expansion through capital acquisition is one of the most challenging phases of company growth. Within the manufacturing sector, this aspect is even more concerning, due to the extensive financial injections required during the initial phases of business development. Lack of information and awareness regarding financing options often hampers potential entrepreneurs from executing their plans. It is therefore imperative to explore the merits and drawbacks of all available options for acquiring capital and applying effective strategies for improving a company’s chances of receiving funding from financial institutions.

Small manufacturing units are usually backed by a competent idea for driving business growth, however, these ideas are seldom supported by a strong and well-researched business plan. Industry analysts believe that thorough business plans play a critical role in ensuring that a company becomes an ideal candidate for lending. By integrating the elements of financial projections, economic forecasts, product marketing, organisational overview, target market and expected sales revenue, a business plan depicts the entrepreneur’s confidence in the success of a venture.

With the launch of several industrial initiatives across Sub-Saharan Africa that have extended to the fields of technology, healthcare, construction and social development, amongst many others, the entrepreneurial conditions in the region are indeed promising. This provides the ideal opportunity for prospective speculators in South Africa to learn the tools required to drive a manufacturing venture towards the path of success. As the government aims to establish a positive and welcoming climate to stimulate investment in South African Small and Medium Enterprises (SMMEs), a number of funding options have become available to kick-start potential projects.

Apart from government institutions and financing bodies, private investors who are optimistic about the economic growth of the region are willing to extend their capital to South African business ventures with the potential to provide a superior return on investment. While these investors will secure a portion of the profits generated by the company as a reward for their investment, a business has a better chance of obtaining substantial funding through this option without any additional borrowing costs. As Sub-Saharan Africa propels itself towards a promising economic future, small manufacturing businesses can benefit by applying effective strategies and ideas to grow the scale of their operations.

The Small Business Indaba will serve as an excellent liaison and business networking opportunity for the small manufacturer, manufacturing stakeholders and SMME leaders and entrepreneurs to advise potential manufacturing business owners on definitive strategies to advance the development of their business.

– Issued by: Siyenza Management

Moving from health challenges to collaborations

[In association with BRICS Journal and the National Institute for the Humanities and Social Sciences]

Access to affordable healthcare is a priority for all the BRICS countries. Dr Aquina Thulare looks at how BRICS is faring and how further collaboration would benefit everyone involved.

Health is a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity. Good health is an indispensable prerequisite for poverty reduction, sustained economic growth and socio-economic development.

Placing  health within a globalised, market-based capitalist system results in a dialectical interplay between social classes and the exact nature of whichever social force is best able to set the agenda differs from country to country. These conditions explain why differential exposure and vulnerabilities have an impact on health and wellness and how these have distinctive consequences on populations. These are the “causes of the causes” of common health challenges.

BRICS is home to 42% of the world’s population and contributes 29.5% to global GDP. Notwithstanding the general economic prosperity and improvements in demographic and epidemiological profile since 1990, profound socio-economic inequalities and public health challenges persist within BRICS countries. Over the years, the different BRICS countries have followed diverse evolutionary trajectories in improving the performance of their health systems.

Health has been placed on the BRICS agenda through the social justice, sustainable development and quality of life dimensions as a key area of development and co-operation. Moreover, BRICS ministers of health are mandated to pursue the agenda of ensuring healthy lives and promoting the well-being of populations in their countries by reaffirming public health financing as an essential element for socio-economic development.

They have committed to:

  • Ending epidemics of communicable diseases;
  • Prevention and relevant treatment of non-communicable diseases (NCDs);
  • Prevention and treatement of substance abuse;
  • Decreasing the number of injuries and deaths from road traffic accidents; and
  • Achieving universal health coverage (UHC) and high-quality healthcare systems.

BRICS would also focus on social determinants of health (SDHs) while also introducing UHC strategies that are appropriate for each country’s context. The concept of “health as a human right” and “health in all policies” pervades much of BRICS’ engagement in contributing towards better global health underpinned by several United Nations (UN) frameworks.

Written by: Dr Aquina Thulare
This is an extract of the full article Moving From Health Challenges to Collaborations, found in Issue 3 of BRICS Journal.

Investors think holistically when searching for great companies

Jonathan Ratner
Displayed with permission from Financial Post

Buy & Sell: As financial analysis becomes more industrialised, time has been freed up for investors to focus more on non-financial factors…

For a long time, most investors assumed everything they needed to know about a company was in the numbers. They’d comb through the past five years of annual reports to determine whether or not it was a great business.

But the reality today is much different, as financial analysis becomes more industrialised through computers, common reporting and accounting standards, and automation. That has freed up time for investors to focus more on non-financial factors like human and social capital – the way businesses discharge their environmental, social and civic obligations.

“Those sorts of things define whether a business is great or not,” said Habib Subjally, head of global equities for RBC Global Asset Management (U.K.), during a recent visit to Toronto.

The portfolio manager of the $2.3 billion RBC Global Equity Focus Fund never had to audit customer satisfaction or employee engagement in during his previous career as a chartered accountant. But when he talks to successful entrepreneurs and asks what makes their businesses valuable, nobody mentions factories, buildings, working capital or inventory. Instead, they typically single out customer loyalty, brand value, people and know-how in developing new products.

“Those are not typically found in annual reports,” Subjally said. “Investors need to spend much more time looking at those types of things.”

Investing in great businesses at expensive valuations is an “elegant way to lose money,” so Subjally and his team of 11 experts take a much more forward-looking approach to find value. They try to understand what businesses and management teams are doing, and project where they will be in five, 10 and 15 years. These includes tracking competitive dynamics and sustainable business models, execution and market share, and management’s attention to environmental, social and governance issues.

“If management is not focused on the long term, it often ends up being a poor investment,” Subjally said, noting that executives are frequently evaluated on very short time periods.

A chief executive could cut training and development budgets – savings that would translate directly to a stronger bottom line, but employees may be unhappy. Similarly, they can borrow from clients by cutting customer service staff, but there won’t be anyone to answer the phones.

“This sort of borrowing creates contingent liabilities that sooner or later become financial liabilities,” Subjally said.

That’s why he considers it important to find management teams that have an ownership mindset, and are prepared to invest in people, customers, suppliers, communities and the environment.

“This costs money, and does lead to lower profits in the short term, but it does lead to better long-term value creation,” he said.

One of the fund’s largest holdings, Fortive Corp. (FTV/NYSE), fits these requirements. The diversified industrial firm that was spun out from Danaher Corp. roughly a year ago, acquires businesses and implements a methodology for making them more efficient.

“They want to use less space, fewer resources, make businesses faster and better, and the process goes all the way up and down the organisation,” Subjally said. “They measure everything, and it’s all about selling more, so there is both a growth element and a people element.”

“They are very good at buying businesses and improving them dramatically,” he added. “They are taking market share, the end markets are growing, and management is able to execute.”

Another top holding, HDFC Bank Ltd. (India), has a technology-focused business model that Subjally believes makes it one of the best-managed banks in the world. He highlighted the country’s largest private-sector bank’s ability to use branches – sometimes with just one employee – to service small villages.

“In a country like India, where the economy and financial services are still growing, they are able to move fast and deal with the huge volumes,” Subjally said.

He highlighted HDFC’s roughly US$1 billion in micro finance: family-based loans that are primarily for women, as well as the bank’s market share gains in areas like credit and debit cards.

“We really like the management team,” Subjally said. “They have not only run the business very well with great transparency, but they also develop their people.”

Estée Lauder Cos. Inc. (EL/NYSE) is an example of a portfolio holding that has professionalised its management team in recent years. The skin care and beauty giant still has William Lauder as chairman, and continues to have a long-term focus, but by purchasing small brands, investing in them, and taking them around the world, that’s allowed the company to grow successfully.

Subjally pointed to Estée Lauder’s very rapid growth in China, India, the Middle East and Latin America, along with the addition of new brands such as Glamglow, Tom Ford and Joe Malone.

“There is much more coming,” he said. “So we can see that it is a great business, and why it is going to be much more valuable in 10 years.”

-Repubhub/Financial Post

Chinese Vitality: A Driving Force of the World Economy

This infographic is courtesy of Beijing Review. To read the full article, click here.