- SOEs engaging funders to improve gross fixed investment into SA
- SA no longer deemed vulnerable with current account surplus
- SA fared better than emerging markets peers through the Covid-19 crisis
Johannesburg, 22 June 2021: The Johannesburg Stock Exchange (JSE) and its co-sponsors, Absa and Citi, successfully hosted its inaugural South Africa Tomorrow Investor conference for the United Kingdom, United Arab Emirates and Southeast Asia markets late last week. The conference had exceptional turnout with 245 attendees attracted from the regions.
“The timing for the conference was opportune given the favourable sentiment towards South Africa. Overall, the feedback from the delegates was positive,” said Valdene Reddy, Director of Capital Markets at the JSE. “Key issues were addressed with clear direction and highlights tackled from the highest level of public and private sector representation as it relates to South Africa’s economic recovery and potential. We put our best foot forward and presented a unified and positive front, ripe with opportunities for investment,” she added.
The virtual conference, held on 17 and 18 June, covered a broad range of social and economic topics that influence investment decisions, ranging from macro-economic policy, political landscape, agriculture, transport, energy generation, renewables and gender equality. International investors engaged with South Africa’s key policy makers and captains of industry on the country’s plans to create a conducive economic and political environment.
President Cyril Ramaphosa, Minister of Finance Tito Mboweni, and South African Reserve Bank Governor Lesetja Kganyago addressed the delegates on the first day of the conference.
In his welcoming speech, President Ramaphosa assured delegates that the country was headed in the right direction in addressing its challenges.
“We have taken a number of steps to improve the investment environment. We are strengthening state-owned enterprises and capacitating the public service,” the President said. “We are addressing our energy challenges by procuring additional electricity with a focus on renewable energy. To enable cheaper and better digital access, we are in the process of releasing high-speed spectrum. We have established an investment fund on infrastructure that will facilitate blended financing with a focus on more public-private-partnership”.
South African Reserve Bank Governor Lesetja Kganyago said South Africa was no longer deemed vulnerable by investors. “Today, as we stand, South Africa is less vulnerable than it was last year. We have a current account surplus and the budget balance has recovered faster than expected and that should help treasury stabilise the debt. The economy is undergoing a recovery shock driven by a commodity price increase,” he said. Governor Kganyago added that policy makers were prudently using this recovery phase to stabilise public finances.
Minister of Finance Tito Mboweni said he expected the economy to continue to improve but added that there were challenges ahead which the government was addressing. “We still face major structural constraints in the economy and that is why the work of Operation Vulindlela is important to unlock those. As soon as we make progress in the implementation of those structural economic reforms we should begin to see better pick up especially in particular the networked industries,” Minister Mboweni said.
On the second and final day of the conference, Minister of Public Enterprises Pravin Gordhan said the President has set up State-owned Entities (SOE) Council comprising representatives from the Government, labour and private sector to rationalise SOEs. The Minister confirmed that, in addition to the drive by the Presidency to crowd in finances from the private sector, there was a need for investment in SOEs.
“In relation to both Transnet and Eskom and other SOEs …. the kind of investment we require is not the quick portfolio investor that rapidly come into the country and leaves. What is required is investment in infrastructure and long-term investments that lends itself to the growth in gross fixed investment in this country, which is lagging behind more recently as it is in other countries.”
“There are funders that we are engaging with through some of these entities that are willing to lend. So, the restructuring of the balance sheet is going to depend on some of these SOEs correcting their operating and business models, availing themselves to private sector investment in specific areas and ensuring they become efficient institutions that are able to compete with similar providers of services to South Africa and the region, and thereby improve both their operational efficiency and financial standing over time”.
“I am proud to have partnered with the JSE and Absa on this very important investor conference. The conference provided a promising vote of confidence in the country, with great attendance across the two days from interested investors. Growing investment relationships will be central in helping the South African economy rebound (recover and build back better) from the disruption caused by Coronavirus,” says Citi Country Officer, Peter Taylor.
“There is no better time to be looking forward to a post pandemic environment and the opportunities that lie ahead, with boldness and bravery. We dare not slow down or stop. Not only for the sake of our clients, but also our investors, as well as the various economies that we contribute positively towards,” said Absa CIB CEO, Charles Russon.
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ABOUT THE JSE
The Johannesburg Stock Exchange (JSE) has a well-established history operating as a marketplace for trading financial products. It is a pioneering, globally connected exchange group that enables inclusive economic growth through trusted, world class, socially responsible products, and services for the investor of the future. It offers secure and efficient primary and secondary capital markets across a diverse range of securities, spanning equities, derivatives, and debt markets. It prides itself as being the market of choice for local and international investors looking to gain exposure to leading capital markets on the African continent. The JSE is currently ranked in the Top 20 largest stock exchanges in the world by market capitalisation, and is the largest stock exchange in Africa, having been in operation for over 130 years.
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ABOUT CITI
Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.
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ABOUT Absa Group Limited
Absa Group Limited (‘Absa Group’) is listed on the Johannesburg Stock Exchange and is one of Africa’s largest diversified financial services groups.
Absa Group offers an integrated set of products and services across personal and business banking, corporate and investment banking, wealth and investment management and insurance.
Absa operates in 14 countries. The Group owns majority stakes in banks in Botswana, Ghana, Kenya, Mauritius, Mozambique, Seychelles, South Africa, Tanzania (Absa Bank Tanzania and National Bank of Commerce), Uganda and Zambia and has insurance operations in Botswana, Kenya, Mozambique, South Africa and Zambia. Absa also has representative offices in Namibia and Nigeria, and securities entities in the United Kingdom and the United States.
For further information about Absa Group Limited, please visit www.absa.africa