| Banks were again amongst the JSE's biggest gainers yesterday despite a profit warning from Absa. It says credit impairments doubled last month as customers started to feel the impact of the Covid-19 lockdown. It has warned that first-half earnings will be more than 20% down from last year and its return on equity - a measure of its profitability in relation to shareholder equity - will suffer. Still, its shares rose 6%, in line with gains on the JSE's Banks Index. Like other SA banks, Absa is not expected to pay any dividends this year following guidance from the Reserve Bank's Prudential Authority to rather preserve capital. Fortunately Coronation Fund Managers' shareholders will be receiving an interim payout after it grew first-half earnings despite a decline in assets under management due to the topple in equity markets in March. Famous Brands is holding back, however, as most of its restaurants remain shuttered due to the lockdown. Meanwhile, Afrimat plans to beef up its Bulk Commodities business with the acquisition of Unicorn Capital Partners and its Nkomati Anthracite mine. And Orion Minerals is moving forward with its Prieska Copper-Zinc Project in the Northern Cape after receiving an improved bankable feasibility study. With local businesses facing difficult and uncertain times, we are launching a new publication tomorrow called InceConnect Business, aimed at helping founders, entrepreneurs and business owners to make smarter and more informed decisions. The InceConnect Business team of industry professionals has been hand-picked based on their previous experience, their direct experience in conceptualising, starting-up and developing businesses, and their passion for writing jargon-free, easy-to-read content. If you would like to subscribe to this new free publication, just follow this link. I hope you have a good day. Stephen Gunnion Managing Editor, InceConnect
Take a look at the latest Insights and sector reports From Ingham Analytics. What influence has quantitative easing in the US and other countries had on local monetary policy and local asset prices? Are the volatile and intermittent portfolio capital flows a function of this or are there other factors at play? Are interest rates in South Africa higher than they could or should be? What about domestic inflation? Top trader Andrew Kinsey tackles yet another thorny topic that impacts your wealth in "South African Reserve Bank monetary policy emasculated." Last week we had yet another interest rate cut - another blow to bank earnings? This came just after the announcement of a Covid-19 loan guarantee scheme, which enables small and medium sized businesses to approach their bank manager to request assistance - but is it worth it and what are the catches? Ingham Analytics gives the answers in "Say buddy, can you spare a dime?" "Poseidon and the other banking gods" gives a more international perspective on the impact of COVID-19 on the global banking system. | 