An article by Moneyweb (2020) has reported on the various business sectors in South Africa and their responses to coping during the COVID-19 Pandemic and lockdown restrictions since March. In this time, the South African economy has suffered the longest recession in 28 years, with millions who have lost their jobs.
Banks
The demand for credit has left South Africa’s biggest lenders with the pressing need to raise provisions to protect against souring loans as the coronavirus lockdown took a toll on business customers. Major banks in SA, Standard Bank Group, Absa Group, Nedbank Group and FirstRand has reported failure of growth in earnings, with reported profits before provisions were excluded. Thus, South African regulators have encouraged the withholding of dividend payments amid uncertainty about the economic fallout from the pandemic.
Retailers
The retail sector is split between those that could trade during the country’s strictest lockdown phase and those that could not. A few examples: Shoprite Holdings faced a success in the local food market. Edcon Holdings reported that it might be days to re-open their clothing stores and owners of the Edgars and Jet chains filed for bankruptcy protection in April, with parts later sold off to other operators. Amid the lockdown, the Walmart South African unit was in the middle of a turnaround plan, with Massmart Holdings boosted gross margins thus enabling to lean on its parent for cash.
Miners
Mining companies have been buoyed by a rally in the price of gold and platinum-group metals that’s helped offset operational disruptions caused by South Africa’s lockdown to contain the pandemic. CEO of Impala Platinum Holdings says, “We believe the strong metal prices will prevail.” The company managed to pay their highest dividend in nine years with chief executive officer Nico Muller promising more to come.
The reality is that society needs to continue to increase their financial independence through saving and investing. People have the skills and resources available to make their financial futures more secure. Our financial experts have been unpacking and providing practical advice on the best ways to preserve your financial freedom. All that is required is the will to start – so start today.
Anglowealth is an Authorized Financial Service Provider (FSP Number: 46755)
Source: Moneyweb (2020)
