2024-05-13 06:04

JOHANNESBURG, May 13 (Reuters) - South Africans will vote in a national election on May 29 with an unprecedented sense of uncertainty about the outcome, as polls suggest the African National Congress will lose its majority after 30 years in power. With coalition government looking like a possibility for the first time since the end of apartheid, a dizzying array of 70 parties from Marxists to social democrats to free marketeers are vying for voters' attention in the last weeks of campaigning. The following are the key issues that matter to voters who will elect a new National Assembly that will then choose the next president. JOBS South Africa has one of the highest unemployment rates in the world, trapping millions of people in poverty and making them reliant on social grants, and the problem is worse now than it was at the end of apartheid. The joblessness rate stood at 32.4% in 2023, nearly 10 points higher than in 1994, when the ANC came to power. Young people account for more than half of the country's unemployed, with a rate of over 40%. ECONOMY The root cause of the joblessness crisis is sluggish growth. South Africa's economy has barely grown in more than a decade, with economic growth averaging 0.8% since 2012. Falling tax revenue has caused government debt to rise, with debt-servicing costs consuming a greater share of the national budget than basic education, social protection or health. The debt-to-GDP ratio is projected to reach 74.1% in the current fiscal year, up from 63.3% five years ago. POWER CUTS Known to South Africans as "load-shedding", scheduled power cuts imposed by state utility Eskom because of an inability to generate enough electricity to meet demand are the bane of households as well as companies. Eskom has been struggling to keep its ageing fleet of coal-fired power plants operational. The utility became dysfunctional in part due to a flourishing of corruption during the administration of former president Jacob Zuma from 2009 to 2018. The government is working to add generating capacity, largely through deals with private companies operating solar and wind projects. While some projects are operational, the green power push suffered setbacks after some projects failed to secure funding. CORRUPTION A long series of corruption scandals involving ANC figures or people connected to them has created a perception among many South Africans that the greed of people in office is contributing to poor service delivery for everyone else. An inquiry established in 2018 to examine allegations of high-level corruption during Zuma's years in power found the problem had been systemic in government, a phenomenon that became known as "state capture". Zuma himself denies any wrongdoing. Since taking over from Zuma, President Cyril Ramaphosa has said tackling corruption was a priority, but opposition critics say his administration has done too little to stop the rot. CRIME South Africa has one of the world's highest rates of violent crime, making it unsafe to venture into certain neighbourhoods. The problem is worse in the densely populated townships on the peripheries of cities where many Black working class people live. The murder rate for 2022/23 was the highest in 20 years at 45 per 100,000, a 50% increase from a decade ago, police figures show. That is higher than in Honduras, a country plagued by extreme gang violence. High levels of poverty, unemployment and inequality have created fertile ground for crime to take root in South Africa, compounded by the proliferation of organised criminal groups and a flood of illegal weapons in recent years. IMMIGRATION Since the end of apartheid, South Africa has attracted large numbers of refugees and immigrants from other African countries, seeking a safe haven and job opportunities. The most recent census, in 2022, found that 2.4 million of South Africa's population of 62 million were immigrants, compared with 835,000 in 1996, the year the post-apartheid constitution was promulgated. Over the years, anti-immigrant sentiment has risen, and South Africa has experienced several violent crises when immigrants have been beaten up or killed by mobs and their businesses have been looted. With voters turning against African immigrants, the government as well as the opposition have increasingly talked about tightening immigration laws to reduce the number of arrivals, and about cracking down on undocumented immigration. In April, the government approved a policy report on toughening up the country's immigration laws. It raised the possibility that South Africa could withdraw from United Nations conventions on refugees to "deter economic migrants who come to South Africa disguising as asylum seekers". A bill based on the report is expected to be introduced in parliament should the ANC remain in power after the election. Sign up here. https://www.reuters.com/world/africa/key-issues-south-african-voters-wide-open-2024-election-2024-05-13/

2024-05-13 05:47

MUMBAI, May 13 (Reuters) - The Indian rupee was marginally weaker on Monday, dragged by the decline in Asian peers and a further drop in domestic equity indexes on worries over the outcome of the general election. The rupee was at 83.52 to the U.S. dollar at 11:06 a.m. IST, down from 83.50 in the previous session. India's Nifty 50 Index, adding to last week's decline, dropped nearly 1% to the lowest in three weeks. The comparatively low voter turnout so far has prompted worries that Prime Minister Narendra Modi's party may not achieve a decisive victory that opinion polls had predicted, souring appetite for Indian equities. Foreign investors took out more than $2 billion from Indian equities last week. The rupee's volatility remained low despite the foreign outflows, possibly due to intervention by the Reserve Bank of India (RBI). "It would seem that RBI is yet not ready for a move up (for USD/INR) from here," a FX trader at a bank said. "The incessant (dollar) offers do not line up with what is happening right now and that indicates RBI is active." Other major Asian currencies were down between 0.1% to 0.6% to begin the week that is likely to be key to when the Federal Reserve cuts rates. The U.S. consumer inflation data is due on Wednesday, with economists expecting a 0.3% month-on-month rise in the core measure. Investors have priced in nearly two rate cuts by the Fed this year. "Core CPI is the most important indicator, and that will need to fall back from 0.4% during the first three months of this year if the Fed's current easing bias is to have credence," ANZ Bank said in a note. Sign up here. https://www.reuters.com/markets/currencies/rupee-dips-weak-asia-more-equity-losses-2024-05-13/

2024-05-13 05:42

S&P 500 ends near flat US CPI data on top this week Powell leads host of Fed speakers this week NEW YORK, May 13 (Reuters) - Global stock indexes were little changed on Monday while the U.S. dollar index eased as investors awaited this week's U.S. inflation data that is expected to be key for the outlook for U.S interest rates. While the U.S. consumer prices report will likely take center stage, U.S. producer price data is also due this week, along with final reports on European inflation that should reinforce expectations for a June rate cut from the European Central Bank. Chinese retail sales and other data are expected as well. This week brings comments from a host of Federal Reserve speakers, including Fed Chair Jerome Powell. Investors have been focused on inflation as they weigh how soon the U.S. central bank is likely to cut rates. Markets are pricing in around an 80% chance of a rate cut by the Fed's September meeting, with almost 44 basis points (bps) of reductions in total expected in 2024, LSEG data showed. Economists polled by Reuters expect the closely watched core CPI to rise by 0.3% in the month, down from 0.4% in March, for an annual gain of 3.6%, down from 3.8%. Paul Nolte, senior wealth adviser and market strategist for Murphy & Sylvest in Elmhurst, Illinois, said both CPI and PPI reports will be important to investors, but added that "there's been so much discussion about the consumer. Is the consumer tapped out? And can the consumer still afford to spend? CPI is going to encapsulate a lot of that." The first-quarter U.S. earnings season is winding down, but investors will see reports this week from some big U.S. retailers including Walmart (WMT.N) New Tab, opens new tab and Home Depot (HD.N) New Tab, opens new tab. "Earnings from Walmart and Home Depot will be interesting to get a gauge on how the consumer is doing" as well, Nolte said. The Dow Jones Industrial Average (.DJI) New Tab, opens new tab fell 81.33 points, or 0.21%, to 39,431.51, the S&P 500 (.SPX) New Tab, opens new tab lost 1.26 points, or 0.02%, to 5,221.42 and the Nasdaq Composite (.IXIC) New Tab, opens new tab gained 47.37 points, or 0.29%, to 16,388.24. MSCI's gauge of stocks across the globe (.MIWD00000PUS) New Tab, opens new tab rose 0.77 points, or 0.10%, to 782.83. The STOXX 600 (.STOXX) New Tab, opens new tab index rose 0.02%. China's finance ministry said on Monday it will start the long-awaited sales of 1 trillion yuan ($138.23 billion) of long-term treasury bonds that Beijing hopes will help stimulate key sectors of a flagging economy this week. The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, eased 0.1% to 105.21. The relative outperformance of the U.S. economy continues to underpin the dollar, while only the threat of Japanese intervention is stopping it from re-testing the 160 yen barrier. The Bank of Japan on Monday sent a hawkish signal to markets by cutting the amount of Japanese government bonds it offered to buy in a regular operation. Against the Japanese yen , the dollar was up 0.3% at 156.24, and the euro was up 0.17% at $1.0787. The yield on benchmark U.S. 10-year notes fell 1.6 basis points to 4.489%, from 4.504% late on Friday. Oil prices were higher amid signs of improving demand in the U.S. and China. U.S. crude rose 86 cents to settle at $79.12 a barrel, and Brent gained 57 cents to $83.36. Spot gold fell 1% to $2,336.76 per ounce. Sign up here. https://www.reuters.com/markets/global-markets-wrapup-1-2024-05-13/

2024-05-13 05:34

NEW YORK/LONDON, May 13 (Reuters) - The dollar eased versus most major currencies on Monday amid expectations key U.S. data this week will show a slowing pace of inflation and growth at a time European economies have surprised to the upside and could be bolstered by interest rate cuts. The dollar has outperformed this year on the narrative of U.S. exceptionalism, as much of the world was still in recovery mode from the pandemic while the U.S. economy was surprisingly strong. The Federal Reserve is now expected to cut rates by 25 basis points as early as September and perhaps again in December, a recent shift from an outlook that feared the U.S. central bank might even raise rates again to tame "sticky" inflation. The economic picture is changing somewhat in the second quarter and dollar strength could fade with weaker employment data as suggested by last week's jobless claims, said Kaspar Hense, senior BlueBay portfolio manager at RBC GAM in London. "We think the data is softening a bit, not only inflation but also the labor market," Hense said. However, "there is a question mark on inflation and if inflation will be constantly and significantly higher in the U.S. as it has been." The consumer price index on Wednesday is expected to show core CPI rose 0.3% month-over-month in April, down from 0.4% the prior month, according to a Reuters poll. The Fed will cut its key interest rate twice this year, starting in September, according to a stronger majority of economists polled by Reuters who broadly raised their inflation forecasts for a second consecutive month. "The dollar seems to be driven by rates to a large extent. Some of the dollar strength could fade into weaker employment data," Hense said. While the market expects inflation to decelerate, Fed Vice Chairman Phillip Jefferson said on Monday that until it's clear price pressures are moderating, he supports holding rates steady. U.S. retail sales also will be reported on Wednesday and industrial production on Thursday. Marc Chandler, chief market strategist at Bannockburn Global Forex in New York, said softer CPI, softer retail sales and softer industrial production should weigh on the dollar because it helps reaffirm the cap on interest rates. "We should also get more data in the coming days that Europe is recovering," he said, referring in particular to the ZEW indicator for economic sentiment in Germany. Markets are pricing in about an 80% chance policymakers will cut rates when they meet in September, with almost 44 basis points (bps) of reductions in total expected in 2024, LSEG data shows. The dollar index , which measures the U.S. currency against a basket of six peers, fell 0.11% to 105.20, while the euro was up 0.16% at $1.0788. Sterling was up 0.27% at $1.2558 before labor market data on Tuesday. INTERVENTION JITTERS Regarding the yen, traders are wary of the continuing risk of currency intervention by Japanese authorities. The dollar has again crept up against the yen after a 3% decline early in May, its steepest weekly percentage drop since early December 2022 after two bouts of suspected intervention by Japanese authorities to strengthen its currency. The spikes in yen strength appear to have spooked some yen bears, at least for now. The dollar strengthened against the yen 0.26% to 156.20, its strongest since May 2. The yen was briefly supported when the Bank of Japan sent a hawkish signal by cutting its offer amount for a segment of Japanese government bonds in the Asian morning. China's offshore yuan rose 0.07% to 7.2399 while the onshore yuan fell to its lowest since April 30 at 7.2332, as traders waited for the United States to announce new China tariffs. The Chinese central bank said over the weekend that new bank lending fell more than expected in April and broad credit growth hit a record low. Separate data on Saturday showed Chinese consumer prices rose in April while producer prices extended declines. Bitcoin gained 3.69% at $62,713.00. Sign up here. https://www.reuters.com/markets/currencies/currency-market-calm-us-inflation-data-holds-focus-this-week-2024-05-13/

2024-05-13 05:28

TANAH DATAR, May 13 (Reuters) - Flash floods and mud slides in Indonesia's West Sumatra province killed at least 37 people this weekend while the search for 17 missing people is still ongoing, authorities said on Monday. Torrential rain on Saturday evening caused flash floods, landslides, and cold lava flow, which is a mixture of volcanic ash, rock debris and water that flows like mud, in three districts in West Sumatra province, Abdul Malik, the chief of the provincial rescue team told Reuters. The cold lava flow, known in Indonesia as a lahar, came from Mount Marapi, one of Sumatra's most active volcanoes. In December, more than 20 people were killed after Marapi erupted. A series of eruptions followed afterwards. "The heavy rain swept materials such as ash and large rocks from the Marapi volcano," said Abdul Malik. "Cold lava flow and flash floods have always been threats to us recently. But the problem is, it always happens late at night until dawn," he added. Abdul said around 400 personnel, consisting of local rescuers, police, and military have been deployed to search for the missing people on Monday, helped by at least eight excavators and drones. The rescue efforts that began on Sunday have been complicated by damaged roads, making it difficult for rescuers to pass through. The national disaster and management agency BNPB said in a statement almost 200 houses were damaged and 72 hectares (178 acres) of lands, including rice fields, were affected. At least 159 people from Agam district have been evacuated to nearby school buildings, the BNPB said. Footage shared by the BNPB showed the roads and rice fields were covered by mud. The floods also brought logs and large rocks into settlements. Eko Widodo, a 43-year-old survivor, recalled the floods came instantly. "The flooding was sudden and the river became blocked which resulted in the flow of water everywhere and it was out of control." Sign up here. https://www.reuters.com/world/asia-pacific/floods-kill-37-indonesias-west-sumatra-17-missing-2024-05-13/

2024-05-13 05:12

May 13 (Reuters) - German potash and salt miner K+S (SDFGn.DE) New Tab, opens new tab reiterated its 2024 guidance on Monday after confirming a quarterly core profit beat driven by an upbeat performance in Europe on recovering prices and demand. Potash prices have started to recover after falling last year from 2022's near record highs due to a drop in demand, as farmers used up existing fertiliser stocks and cut back on its use to rein in costs. After confirming first-quarter earnings before interest, tax, depreciation and amortisation of 200 million euros ($215 million) - matching consensus-beating preliminary figures reported in April - the company reaffirmed annual guidance for EBITDA of 500 million-650 million euros. A strong start to the year in Europe raises its likelihood of reaching the higher end of this range, the Hessian-based group said. Shares in K+S were down 0.9% at 0922 GMT. The core profit beat was driven by the Specialty Fertilizer business as well as an overall good performance in Europe, the company said. "Brazil is showing very strong demand and there is hope that we could see another record here," Lohr added, commenting on potash demand during a call with analysts. South-East Asia is the only region where potash market remains weak, he said. South America made up 6.8% of the group's sales in the first quarter, while Asia was responsible for 16.2%. While the company expects potash supplies from Russia and Belarus to rise, it does not foresee oversupply in the market this year as demand is also picking up. K+S's upbeat results echo those of Toronto-listed fertiliser group Nutrien (NTR.TO) New Tab, opens new tab, whose core profit was fuelled by strong demand for crop nutrients from North America. However, they contrast with those of U.S.-based Mosaic (MOS.N) New Tab, opens new tab and Norway's Yara (YAR.OL) New Tab, opens new tab, which both said lower prices weighed on their quarterly earnings. ($1 = 0.9286 euros) Sign up here. https://www.reuters.com/markets/commodities/ks-confirms-q1-earnings-beat-2024-guidance-potash-prices-stabilise-2024-05-13/