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🌟 South Africa's Tourism Sector Bounces Back to Pre-Pandemic Levels
South Africa's tourism industry is witnessing a huge recovery, with income from tourist accommodation soaring by 14.9% year-on-year at the start of 2024. The resurgence is led by the hotels category and "other" accommodation types, such as lodges and self-catering establishments, signalling a strong comeback after the setbacks caused by the Covid-19 pandemic. In January 2024 alone, the country welcomed nearly 972,000 travelers, a 14.4% increase from the previous year, with significant growth in arrivals from Brazil and China. This positive trend continued into February, with international tourist numbers growing by 18.3% compared to February 2023.
The thriving tourism sector is crucial for South Africa's economic growth, as it is intertwined with various industries. Overcoming challenges such as electricity and water shortages, visa issues, and crime is essential to sustain this momentum. Data from NightsBridge and Airbnb further underscore the industry's rebound, with bookings surpassing pre-pandemic levels and a notable shift towards online bookings. The economic impact of tourism extends beyond major hotspots, contributing over R23.5 billion to the economy and creating almost 50,000 jobs in 2022, highlighting the sector's vital role in the country's overall economic development.
🌟 Momentum Metropolitan's Strategic Moves and Financial Growth
Momentum Metropolitan is enhancing its share buyback program with an additional R500 million, bringing the total to R2.25 billion, following a notable 48% increase in earnings to 168 cents per share for the six months ending 31 December 2023. The group's operating profit soared by 69% to over R2 billion, driven by strong operating earnings across business units and higher investment income due to increased interest rates. Despite economic challenges in South Africa, Momentum Metropolitan declared an interim dividend of 60 cents per share, showcasing its commitment to shareholder returns. The group's net debt reduction and strategic focus on capital management and operational efficiency have positioned it strongly in the market. Following the release of its positive interim results, Momentum Metropolitan's share price rose by 1.5%, reflecting market confidence in the group's financial health and strategic direction. With a solid financial foundation and a commitment to innovation and growth, Momentum Metropolitan is poised to adapt to the evolving needs of its clients and continue delivering strong financial performance.
🌟 Mixed Bag for Fuel Prices and SARB Holds Repo Rate
April brings mixed news for motorists, with petrol prices rising while diesel costs vary. Inland, 93 unleaded petrol will increase by 65c/l, and 95 unleaded by 67c/l. Diesel 0.05% sulphur will see a slight increase of 3c/l inland but a decrease of 4c/l at the coast. Illuminating paraffin will also see hikes in both Gauteng and coastal areas. The price adjustments are due to changes in international product prices and the rand's performance against the dollar. Meanwhile, the South African Reserve Bank (SARB) has decided to maintain the repo rate at 8.25%, keeping the prime lending rate at 11.75%. This marks the fifth consecutive hold, with inflation hitting a four-month high and delaying hopes for a rate cut. SARB Governor Lesetja Kganyago notes that while global inflation pressures persist, headline inflation in South Africa is expected to reach the target midpoint only by the end of 2025. The decision to hold the rate was unanimous, with the MPC considering the restrictive policy stance appropriate given the inflation outlook and the need to address elevated inflation expectations.
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🇺🇸 United States: Strong Quarter and Economic Indicators
Market Gains: The major indexes advanced, with the S&P 500 reaching new highs. The market's advance was broad, with small-caps and value stocks outperforming their counterparts.
Economic Data: Durable goods orders rose more than expected in February, and new home sales unexpectedly declined. Consumer confidence dipped slightly in March, while consumer sentiment was revised upward to its highest level in 21 months.
Baltimore Port Closure: The collapse of the Francis Scott Key Bridge has cut off shipping access to the Port of Baltimore, raising concerns about the broader economic implications.
🇪🇺 Europe: Market Advances and Economic Slowdown
Market Performance: European markets advanced, with the STOXX Europe 600 Index reaching a record intraday high. Government bond yields declined as the ECB flagged a possible rate cut for June.
Germany's Economic Weakness: Retail sales in Germany dropped significantly in February, and economic growth forecasts for 2024 were cut to 0.1%.
Consumer Sentiment: European consumer confidence improved to its highest level in over two years, with industry confidence also seeing a marginal improvement.
🇬🇧 United Kingdom: Monetary Policy and Economic Data
BoE's Dovish Stance: The Bank of England held interest rates steady, with Governor Bailey signaling optimism and suggesting that rate cuts could be "in play" at future meetings.
Inflation and Growth: UK inflation slowed to 3.4% in February, while the composite PMI indicated continued expansion in output.
Recession: The UK entered a technical recession in Q4 2023, contracting by 0.3% following a 0.1% contraction in Q3.
🇯🇵 Japan: Currency Depreciation and Policy Shift
Stock Market Decline: Japanese equities fell amid concerns over the depreciating yen, which hovered near JPY 152 against the U.S. dollar.
BoJ's Policy Change: The Bank of Japan raised interest rates out of negative territory for the first time in about seven years, signaling a shift towards monetary policy normalization.
Economic Indicators: Inbound tourism in Japan reportedly exceeded pre-pandemic levels, although tourism from China lagged.
🇨🇳 China: Property Sector Concerns and Economic Recovery
Market Retreat: Chinese equities declined due to ongoing concerns about the property sector downturn, despite signs of economic recovery.
Industrial Profits: Profits at industrial firms surged 10.2% in the January-February period, recovering from a decline in 2023.
Government Pledges: Premier Li Qiang pledged to support growth in various sectors, including biological manufacturing and artificial intelligence.