The world is slowing down, with a third of the globe having some sort of restriction placed on their freedom of movement. It is the first day of 21 days of lockdown in South Africa, while in other countries: Police in India are accused of assaulting people who do not follow the lockdown parameters; America is at a point where they are having to choose who should get medical treatment as they do not have the resources to treat everyone; and parts of China are emerging from lockdown after two months of isolation.
Global News
- Prime Minister Boris Johnson has tested positive for the Covid-19.
- The S&P and Moody’s rating agencies are downgrading US companies at the fastest rate in a decade due to the impact of Covid-19. Debt-saddled corporations and entire industries are struggling with the dramatic slump in demand brought about by the pandemic.
- The US is now the epicentre of the virus with the most amount of active cases, increasing to 82 000. Globally the number of deaths from Covid-19 has risen to close to 25 000, this being up from 15 400 on Monday this week.
- Nearly 3 million people filed first-time claims for unemployment in the US. According to the Department of Labour, it is the largest spike in job losses since numbers began being tracked, and the New York Times has stated that the previous record was 695 000 of initial claims in October 1982.
- Republican and Democrat senators reached a deal on a stimulus package that is set to provide more than $2 trillion in spending and tax breaks to bolster the US economy and fund the effort to combat Covid-19. The House of Representatives was expected to quickly take up the bill and pass it, sending it to President Trump for his signature.
- Italy’s cases have surged once again after a misconception that they had a hold on the crisis. The number of cases rose by 6 153, making the number of active cases 80 539, with 8 200 Covid-19 related deaths.
- Spain’s health ministry announced its most deadly day yet reporting 769 Covid-19 related deaths.
- India has also placed an order on its 1.3 billion citizens to stay at home for three weeks. Prime Minister Narendra Modi said that “If you can’t handle these 21 days, this country and your family will go back 21 years”.
- After mounting pressure from athletes and participating countries, the Tokyo Olympics has officially been postponed until 2021.
- Off the back of massive global stimulus, equity markets have enjoyed a strong week with the MSCI up 12.7% as at yesterday’s close.
Local News
- South Africa is heading towards 1000 cases of Covid-19 and has implemented a countrywide lockdown for at least 21 days. President Ramaphosa is receiving international praise for his swift response to the pandemic. Tragically though, our 1st two Covid-19 related deaths have been reported.
- The South Africa Reserve Bank launched a bond-buying programme, following other countries in taking quantitative easing measures, in order to provide liquidity and add support to credit markets and banks.
- It does not seem like Edcon will survive the 21-day lockdown. The struggling company is unable to pay its suppliers and may not be able to reopen. Similarly, the business rescue practitioners of SA Express have launched an application at the High Court in Johannesburg to have the airline liquidated.
- Eskom has announced that coal deliveries will continue during the lockdown. A source from the National Union of Mineworkers says this will only be from stockpiles, and that the only members who are going to work will be those required for ‘care and maintenance’ operations, as the mines are shut.
- It is unclear whether or not Moody’s will announce its review of South Africa’s credit rating this evening. A deferral may be warranted due to the extraordinary current global circumstances.
- Remitting Funds Offshore: Remittance of funds through the use of the Annual Discretionary Allowance may continue. However, due to SARS also being part of the national lockdown, tax clearances are unable to be submitted to them for approval under the Annual Foreign Capital Allowance (of up to R10m).
- Following the lead of global equity markets, the JSE was up 12.01% for the week as at yesterday’s close.
