Market Commentary | The week that was
Ban lifted on Bain & Company from bidding for SA public sector contracts: Following its involvement in the state capture corruption crisis in South Africa, the UK government quickly reversed a three-year ban on the consulting firm Bain & Company from submitting bids for contracts in the public sector. Less than eight months after the ban's introduction in August of last year, it has been lifted. The US-based consulting company has recently been linked to allegations of corruption in connection with work it performed for the South African Revenue Service (SARS), that has later been exposed before the Zondo Commission of Inquiry as supporting state capture.
Court declares municipality’s excessive rates unlawful: The Supreme Court of Appeal (SCA) determined the excessive rates, levied by the Thaba Chweu Local Municipality between 2009 and 2018, unlawful and ordered it to be set aside. “In previous cases the actions of municipalities were found to be unlawful, but they were not instructed to refund ratepayers.” The Thaba Chweu Rural Forum is an alliance of farmers who farm with cattle, maize, soy, wheat, and citrus. Their objections were based on legislative regulations that stipulate the limit of the tariff charged for land used for agricultural purposes to 25% of that applicable to land used for residential purposes. This is expressed as a ratio of 1:0.25. In one instance a farmer’s annual rates bill increased from R1 432.08 to R149 448.60 in 2014/15. The court considered not only the crucial role that farmers play in ensuring food security and the impact illegal rates have on food security, but it also emphasised that it is in the public interest to prevent any disruption to the municipality's revenue stream.
Markets: Despite Tuesday being a day without load shedding, the rand did not move much. After the announcement on 19 March that UBS bought Credit Suisse, Tuesday’s European markets ended on a positive note. On Wednesday (22 March), the rand was trading at R18.55/$, R19.97/€, and R22.68/£. Brent crude is trading at $74.99 a barrel.
Looking at the week ahead: StatsSA will release its Consumer Price Index (CPI) data for February 2023 and the US Federal Reserve (FED) will announce its interest rate on Wednesday.