Cabinet decided this week that there will be a triplet sibling for the two coal-fired power stations currently under construction – Medupi and Kusile. This new project, currently dubbed Coal 3, will start up once the current two plants have been completed. Coal-powered plants are polluting and the decision to build another one appears to be anti-green. However, given the power constraints in ZA, maybe this decision was inevitable?

We got expert comment from Mike Schussler, Duane Newman and Andrew Kenny.

Tweets of the day:

Fake Dispatch (@Fake_Dispatch): A bar walks into a bartender. The horse says, "You’re not good at telling jokes, are you?"

Duncan McLeod (@mcleodd): Three 24-hour news channels on a premium satellite platform that reaches a limited audience in a developing economy. Okay, then…

Frans Cronje (@FCronje_SAIRR): Well done to @AgangSA leader for saying it’s ok to be wealthy and that Mandela was not a poor man. It needed to be said.

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The CPI inflation number came in today at 6.3% for July – breaching the 6% upper level of the target band. This is not expected to be a sustained breach, but it does make inflation uncomfortably high? What did our experts have to say?

Today’s ZA Confidential features comment from John Loos, Ettienne le Roux, Dawie Roodt and Nedbank.

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Tweet of the day:
Michael Jordaan (@MichaelJordaan): July inflation 6,3%. Ironic that regulated prices increased 12% and market prices only 5%. Privatise.

Although I am currently boycotting my local Checkers after astounding rudeness from a manger, I did go along to the holding company Shoprite’s results presentation today – as CEO Whitey Basson always puts on a good show. While I have little faith in his decision to enlist foul-mouthed chef Gordon Ramsay to promote his meat and cheese, I do see him as one of the more impressive and outspoken of our business leaders. Shoprite is doing well, in a very tough and competitive local environment, and crucially is also continuing to expand in Africa. The results for the year to June included a 12.1 rise in turnover, with headline earnings a share up 11.3 percent, and a gain in market share. But what did our experts have to say?

We spoke to Independent analyst Ian Cruickshanks, Ron Klipin from Cratos Capital, and Jacques Theron from Absa Investments:

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The steel industry has been a troubled one in South Africa, and government seems worried that despite many attempts to secure a supply of cut-price steel for SA manufacturing, our steel customers are still paying too much. One solution to this, which has been mulled over for more than a decade, is to bring a new steel mill to SA.

ZA Confidential looks at the issue today with IDC Divisional Executive responsible for Mining and Manufacturing, Abel Malinga, and with Duane Newman from Cova Advisory.

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SPECIAL REPORT.

The Manufacturing Circle has produced its review of the second quarter of 2013, with a warning that although there is growth in output, jobs are being lost. Dr Iraj Abedian of Pan African Investment and Research Services presented the findings in Sandton today, and highlighted a major issue facing manufacturing – the lack of job creation.

More details in today’s ZA Confidential newsletter.

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Retail sales growth moderated sharply in June after the strong jump in May. Annual growth in retail sales fell to 1.9% from 6% in May. On the face of this, we should be worried, but what is the underlying picture? We asked our experts……

There was expert comment from Nedbank’ Economic Unit, from Shireen Darmalingam of Standard Bank and from Mike Schussler of economists.co.za

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The Deputy Governor of the Reserve Bank Daniel Mminele has warned that the country’s GDP growth rate might fall below 2% if there is a deadlock in wage negotiations. It is already hard to see how there can be any job creation at a 2% level, and yesterday’s numbers from Adcorp suggest that we are continuing to shed labour. How seriously should we take this warning? We asked our experts……

Today’s newsletter contains comment from Russell Lamberti of ETM, Luke Doig from Credit Guarantee and Adcorp’s Loane Sharp.

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Positive results for the year to June came out today from Group 5, but the shadow of the Competition Commission continues to darken the prospects for, and reputation of, the company. CEO Mike Upton announced a 27 percent rise in revenue. There has also been a turnaround in fully diluted headline earnings. Provision (of an undisclosed amount) has been made for Competition Commission administrative penalties in four cases which recently came to light, and which were not part of the initial G5 dialogue with the Competition authorities.

The full newsletter has been sent to subscribers, with comment from Gavin Maile, Lavan Gopaul and Ron Klipin.

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