A street sign for Wall Street is seen outside the New York Stock Exchange (NYSE) in Manhattan, New York City, US. The national shutdown will be supported by a number of other political formations and workers’ unions under the SA Federation of Trade Unions. Photo: Reuters
The South African stock market plunged to a four-month low yesterday amid recent turbulence in the global financial system and the looming national shutdown in the country.
The JSE All Share index in intraday trade fell below 72 600 points, pushing its losing streak to eight days, led by resource-linked stocks. Later it managed to regain ground ending at 72 905.50 points.
Wall Street's main indexes fell yesterday after the European Central Bank raised its key policy rate despite fears of a global banking crisis, fueling concerns that the Federal Reserve could also tighten monetary policy for longer, Reuters reported.
Meanwhile, the rand moderated around R18.38 to the US dollar as risk appetite remained fragile on fears of economic disruption as the national lockdown is set to forge ahead on Monday.
The EFF has vowed to put the country on a total shutdown during a protest about load shedding, the high cost of living and the high unemployment rate.
The national shutdown will be supported by a number of other political formations and workers’ unions under the SA Federation of Trade Unions.
Calls for the national shutdown, however, have been shunned by a number of business formations, though some have decided to close doors on Monday for safety.
Business Unity SA CEO Cas Coovadia said they shared South Africans’ frustration with load shedding, stagnant economic growth, unemployment, and the myriad economic problems.
“But the disruption of the economy by a minority will further aggravate an already dire situation and threaten workplaces, and household incomes, and increased hardship for all,” Coovadia said.
“South Africa needs united action to overcome its economic and social challenges, not threats of violence and intimidation in support of narrow political gains.”
There is fear that the national shutdown will not be a peaceful protest and might lead to wanton looting and destruction of property such as happened during the July 2021 riots.
But the government yesterday moved to warn that attempts to cause disruption would be met with the full might of the law, also saying that all government services would operate normally.
However, Minister in the Presidency Khumbudzo Ntshavheni said the Cabinet was concerned over calls for protest action and deemed such calls as irresponsible and reckless.
“The alleged demands about ending load shedding, high cost of living and high unemployment rate were addressed by President (Cyril) Ramaphosa during the State of the Nation Address,” she said.
“Therefore, the only demand which is the basis of this protest action is the plan to remove President Ramaphosa from office through unconstitutional means.”
The business sector is of the view that the economy is facing significant headwinds and a national shutdown would do more harm than good in the current circumstances.
South Africa’s economy is projected to grow less than 1% this year as a result of heightened load shedding and logistical challenges, and is on the verge of slipping into a technical recession.
SA Chamber of Commerce and Industry CEO Alan Mukoki urged the organisers of the shutdown to consider the negative impact of the shutdown call.
“Our challenges of economic growth, unemployment, poverty, and inequality cannot be resolved by resorting to extra-parliamentary and negligent political action that disrupts economic activity,” Mukoki said.
“Our economy is at a difficult position of recovery and reckless actions by political parties or labour unions should be universally condemned.”
After much speculation, the SA National Taxi Council said it had decided to not participate in the national shutdown, and Monday would be a normal operating day for the taxi industry.
The Motor Industry Staff Association (MISA) also warned its more than 58 000 members not to participate in the national shutdown
MISA CEO Martlé Keyter said the retail motor industry was currently feeling the devastating impact of load shedding and their legal department was working 24/7 to save the jobs of members whose employers were struggling to survive.
“MISA does not agree with the timing of the national shutdown and doesn't believe it will help workers to sacrifice a day’s salary,” Keyter said.
“It can only weaken the rand, put more strain on the economy, leading to more unemployment.”
BUSINESS REPORT