No quick fix for unemployment: Marcus

first_img21 October 2010 Strong rand dilemma Source: BuaNews She said there was no doubt that the rand was overvalued relative to its fundamentals. South Africa’s biggest internal challenge is unemployment, which currently stands in excess of 25%, and there is no doubt that addressing this must be a national policy priority, says Reserve Bank Governor Gill Marcus. “However, if we are looking at job creation as a priority to address unemployment, then current labour legislation, which extends wage determination to all firms in a particular sector, needs to be examined regarding its effects on small and medium enterprises, which should be a focus of growth and employment creation,” Marcus said. Marcus warned that excessive focus on the exchange rate could result in the neglect of other factors, which would constrain growth even with a properly valued exchange rate. She said that the response to the financial crisis, when about a million jobs were lost, showed that South Africa has a fair amount of labour market flexibility. “While we clearly recognise the problem, the solution is not clear cut. The costs of intervention are not insignificant and involve serious policy choices,” Marcus said. “Nevertheless the bank is engaging with the National Treasury, and we are examining the effectiveness and appropriateness of what other countries are doing.” She added, however, that unemployment in the country was of a structural nature, and was not something that could be solved simply by cutting interest rates or intervening in the exchange rate. Marcus said the central bank was aware of the disadvantages of a stronger currency and that it was ready to do what it could to alleviate this situation, adding, however, that “we need to recognise the limits to what can be done”. “The various forms of direct intervention on their own will not suffice, as international experience has suggested. Consideration should be given to combining intervention policies with direct special targeted support measures for those sectors of industry that are hardest hit by the exchange rate developments,” Marcus said. Labour market flexibility “It’s incorrect to look at the interest rate or the exchange rate as the silver bullet that will solve the country’s growth problems,” she said in Pretoria on Tuesday. Structural reforms were required in skills development and education, while skilled artisans were also needed.last_img read more

Michael Jordaan still leading South African business

first_imgSulaiman PhilipAs a cadet officer at the Gordon’s Bay Naval Academy Dr Michael Jordaan, outgoing chief executive officer (CEO) at First National Bank (FNB) was trained in the art of pouring the perfect glass of port. He was also trained to time his departure from a party perfectly. A useful skill as it turns out for the 2013 Sunday Times Business Leader award winner.Jordaan walks away from a bank that, under his leadership, has been crowned the most innovative bank globally, a pacesetter for using mobile technology in banking. He has also helped grow it into the second-largest retail bank in the country and the largest supplier of mobile devices – smartphone and tablets – in South Africa.Tech-savvy Jordaan is not leaving FNB for a sedentary life on his Stellenbosch wine farm. He has accepted a non-executive position at South African social network and messaging service Mxit. He believes home-grown success stories like Mxit can show the way toward building a more diverse and stronger South African economy. Loathe to handpick industries that will grow in the future he argues, “The market will be the ultimate arbiter of how our economy will grow and diversify, but the kids growing up with companies like Mxit are comfortable with the devices and programming that will drive growth.” Celebrate business achievements Jordaan believes that government, with the assistance of business, needs to build the launch pad to improve South African competitiveness, especially in Africa. South African businesses are world class, as reflected by the recent World Economic Forum’s competitiveness report, and have the potential, he says, to lead Africa into an era of self-sufficiency. This is why he is a cheerleader for the country wherever he goes.“For investors the risk-reward trade-off is good, governance is excellent and we have world-class skills in many industries. However we need to improve our education system to retain our place as the leading economy on the continent. Like every South African I love sport but there are times I wish we got as passionately excited about education as we do about sport.”With more than 36 000 Twitter followers, Jordaan is comfortable sharing his opinion on a variety of subjects without the filter of a corporate communications team. Among his more contentious opinions is that Black Economic Empowerment needs to be amended and refreshed.“Broad-based transformation and skills transfer has been a huge success but personally I am not a fan of those structures that benefitted a few well-connected individuals.”“South Africa is in the unique position of having both high unemployment as well as a critical shortage of key skills so going forward I would like to see greater emphasis on job creation as a category of transformation.”Jordaan served part of his banking apprenticeship under Paul Harris at Rand Merchant Bank where his role model tasked him with establishing an internet-based commercial bank. Without the infrastructure to make it viable the idea evolved into RMB Private Bank. Under Harris’s tutelage Jordaan learnt two valuable lessons; role models are important and business matters.“We need to celebrate business achievement and accept that it can be a huge force for good. Business leaders need to give back by sharing insights and lessons, especially with entrepreneurs because small business is the driver of economic growth.”His advice for entrepreneurs is to find a role model. They are, he says, the best tool for someone starting a business. They are a resource whose ability to help is built on experience. Business success however is built on passion.“Be obsessive about your product or service. Don’t do it for the money. Surround yourself with great people and shower them with credit when they achieve. Leave your ego at home or better yet lose it altogether.” Entrepreneurship and innovation breed success FNB’s CEO describes himself as entrepreneurial at heart, and like all entrepreneurs his mind-set is: find a solution rather than fixating on the problem. This ethos has allowed FNB, in partnership with the Department of Trade and Industry, to develop a model that allows a new business to open a bank account and complete the business registration within 24 hours as part of the same process. “Regulations are a way of life and many are well intended but I feel passionately that we should streamline the start-up process as much as possible. Small business can be the engine of growth but we need to remove obstacles, not set up hurdles.”Innovation is at the heart of Jordaan’s success but it’s his management style that has allowed FNB staff to think beyond what is possible. Since 2004 the bank has run the FNB Innovators Programme to encourage lateral thinking. Accepting the BAI – Finacle award in 2012, Jordaan revealed that 8 166 innovative ideas were born as a result of the programme.“The trick in life is to surround yourself with people who are better than you, agree the goal, then get out of their way. People are inherently good and want to achieve. Nine times out of ten they will surprise you with great outcomes as well as new ways of doing things.”Jordaan finds it easier to not micromanage staff, believing that people who are allowed to find solutions without a manager looking over their shoulder helps build a stronger organisation. Interference, as he calls it, does not allow companies to use its employees’ skills.“Mediocre people like being told what to do and exactly how to do it; great people want to work in an empowered environment.”          As Jordaan steps away from his high-profile role toward new challenges he feels assured that he will find success. And if he does not, he believes there are lessons to be learnt in failure as well. A lack of success is just a different way of learning a lesson, he has explained in interviews.Jordaan, who took over for one three-hour shift from Talk Radio 702 personality Redi Thlabi, while she was on maternity leave, embraces challenges that remove him from his comfort zone and would encourage every business leader to do the same.“I enjoyed connecting with people who would not otherwise cross my path; things like Twitter break down all organisational boundaries. The most important lesson I have learnt is this: one learns nothing in the ivory tower and everything by connecting with South Africans from all walks of life.”last_img read more

Too much wheat impacting markets

first_imgShare Facebook Twitter Google + LinkedIn Pinterest USDA reduced corn yield estimates one bushel and raised bean yield estimates two bushels. The market reacted with corn prices decreasing 4 cents and bean prices 14 for the week. This isn’t unusual though.  Prices typically trend lower from the report until right before harvest.  It’s happened 13 out of the last 15 years.WheatI rarely mention wheat, but right now it’s important to understand how it’s impacting the market.  Simply put, there is too much wheat in the U.S. and globally.  This is keeping prices low enough to encourage its use as feed instead of corn.  This could have a large impact on corn demand going forward.Also, these lower prices may impact acres next year.  There were already 4 million fewer wheat acres this year (7% less). These lower prices may motivate farmers to plant other crops.  While some may plant small grains, or cotton, many will likely plant corn or soybeans.  Corn especially makes a good substitute for wheat in crop rotations because both are grasses and need nitrogen for optimal growth.Funds are short wheat and farmers are long. There aren’t many buyers needing coverage, so I doubt the market will move much until something big and unforeseen happens.CornWheat replacing corn for feed not only impacts the U.S. feed ration, it affects exports too. Until wheat prices hit bottom and rebound, it will be difficult for corn to rally much.Some are debating how many corn acres will switch to beans next year.  It’s really too early to tell right now.  Switching 2 million corn acres to beans isn’t unrealistic.  However, keep in mind assuming trend line yields, the market would still have potentially more carryout (2 billion) and a higher stocks to use ratio than either 2014 or 2015.Similar to wheat, funds are short corn and farmers are long corn. End users are not well covered.  Farmers aren’t selling corn right now, which is keeping the market from going into a free fall.  However, it’s unclear what price point will motivate farmers to start selling and when.  The chances of $4 corn seems out of range until summer weather issues next year at the earliest.Many don’t believe the USDA yield estimates and think it is closer to 171 to 172 bushels. These estimates aren’t bullish, but may suggest $3.25 is a reasonable value long-term.BeansBean demand domestically and internationally is relatively high.  Export demand is 15% higher than 3 years ago and 50% higher than 10 years ago.  Domestic bean demand has been steady the last 10 years, up 4% from last year and 8% from three years ago. Keep in mind though, while the growing world population is keeping demand strong, production has also increased and kept pace.Weather predictions in South America are currently overall neutral, as they expect near normal precipitation.  It’s important to keep South America weather reports in perspective.  Weather will vary regionally, but South America’s growing area is much more spread out than the U.S. It is 50% longer than the U.S./Canadian border to the US/Mexican border.  So, while it may be dry in one area, considering the large growing area, it doesn’t have to impact total production much.Everyone was surprised when prices increased from the mid-$9s in Feb to almost $12 in May.  Many traders are expecting something like this to happen again.  One contributing factor to this price increase was heavy rains in late April in South America during harvest, reducing yields.  It’s unlikely that a widespread weather condition like that will happen frequently.  While I hope prices increase like last year, I need to be prepared if they don’t.Most farmers don’t have 100% on-farm storage and they don’t store beans at home if space is limited.  So, the choice is to either pay storage rates and hope for better numbers or sell off the combine for income.  Funds are long bean futures and so are farmers.  It’s unclear who will sell first and for what price – the funds or the farmers. If both start to sell we could see a fast sell off.  In the spring most traders felt that beans would not trade above $9.50. Now most traders feel that beans can’t trade below $9.50.Market ActionI sold the first 20% of my 2017 bean production at 9.49 last week.  Considering the South America weather conditions are predicting average conditions and that so many funds/farmers are long beans, I decided to sell. This is the same price as most of my 2016 bean production, so I’m starting 2017 where I left off in 2016.  If this is my worst sale of the year, I will be happy.Speculation or MarketingAre you marketing your grain like a speculator (gambling on what future prices for grain will be) or a marketer (someone who strategically sells their grain at profitable levels)?Almost all farmers think they are marketers, but many unintentionally become speculators.  I think it’s the trade that fuels the fire by talking endlessly about how the market is at its lowest and that a huge rally is “just around the corner.”  I hope they are right, but what if they aren’t?  I can’t afford the consequences of wrong predictions.It’s important to see the market from the non-farming speculator’s point of view, which is very different from producers. However speculators don’t need to worry about farm operation break evens, timing, cash flow, basis or production issues like farmers do. For speculators buying options can be a great way to speculate on the market and limit losses.  However, farmers trying to play the same game have to add any losses to their final grain price.  The worst case scenarios of trades that don’t work out for speculators look far worse for a farmer.I heed the advice of speculators but I have to remember that I have different goals than they do. My approach sometimes has to be different from what others market participants are doing.Jon grew up raising corn and soybeans on a farm near Beatrice, NE. Upon graduation from The University of Nebraska in Lincoln, he became a grain merchandiser and has been trading corn, soybeans and other grains for the last 18 years, building relationships with end-users in the process. After successfully marketing his father’s grain and getting his MBA, 10 years ago he started helping farmer clients market their grain based upon his principals of farmer education, reducing risk, understanding storage potential and using basis strategy to maximize individual farm operation profits. A big believer in farmer education of futures trading, Jon writes a weekly commentary to farmers interested in learning more and growing their farm operations.Trading of futures, options, swaps and other derivatives is risky and is not suitable for all persons. All of these investment products are leveraged, and you can lose more than your initial deposit. Each investment product is offered only to and from jurisdictions where solicitation and sale are lawful, and in accordance with applicable laws and regulations in such jurisdiction. The information provided here should not be relied upon as a substitute for independent research before making your investment decisions. Superior Feed Ingredients, LLC is merely providing this information for your general information and the information does not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision. The contents of this communication and any attachments are for informational purposes only and under no circumstances should they be construed as an offer to buy or sell, or a solicitation to buy or sell any future, option, swap or other derivative. The sources for the information and any opinions in this communication are believed to be reliable, but Superior Feed Ingredients, LLC does not warrant or guarantee the accuracy of such information or opinions. Superior Feed Ingredients, LLC and its principals and employees may take positions different from any positions described in this communication. Past results are not necessarily indicative of future results. He can be contacted at jon@superiorfeed.com.last_img read more

Will uproot Modi govt. before it completes term, says Lalu

first_imgStung by a series of scam charges and Income Tax raids against his family members, Rashtriya Janata Dal chief Lalu Prasad on Friday declared that he would uproot the Narendra Modi government at the Centre “before it completes its five-year term.” He also accused the BJP of conspiring to tarnish his image through I-T raids and making “frivolous allegations” against his sons and daughter.“Listen, BJP/RSS people, Lalu will drag you off your seat in Delhi, whatever be my situation… Get this straight… don’t you dare threaten me,” tweeted Lalu Prasad. ‘Where’s the proof?’ On the recent Income Tax raids against his family members and others in connection with several “dubious” land deals, Mr. Prasad’s second tweet asked: “Chapa…Chapa…Chapa…Chapa…kiska Chapa? Kisko Chapa? Chapa to hum marenge 2019 mein…Main dusron ka hausla digata hun, mera kaun digayega (Raid…Raid… Raid… whose raid? Who is being raided? … I’ll do a raid in 2019…I make others nervous, who will make me nervous?). Mr. Prasad asked the media to name the 22 places where Income Tax officials had conducted raids. “How did they [the media] report without any verification or evidence,” he asked. Speaking to a select group of journalists in Patna, the RJD chief said the Modi government had completed three years. “But it’s not going to complete its full five-year term… The BJP has been conspiring to tarnish Lalu’s reputation… How can my family and I become super rich and others remain paupers .. It’s all part of a political conspiracy.” Mr. Prasad said he, his wife and two sons had been filing I-T returns and had also submitted affidavits on their assets to the Election Commission. “It’s all in the public domain.” Mr. Prasad said Mr. Modi was trying to divide the country. “But we won’t let him divide the country … I’m standing rock solid in their path.” Pan-India campaignThe RJD chief said he had called a “BJP bhagao, Desh bachao” rally in Patna on August 27. “I have invited top leaders of all non-BJP parties to my grand rally…leaders like Congress president Sonia Gandhi, H.D. Deve Gowda, Arvind Kejriwal, Mayawati, Akhilesh Yadav, Mamata Banerjee and Karunanidhi will attend the rally from where we will launch a pan-India campaign to uproot them [BJP] from the Centre,” Mr. Prasad said.He also raised the issues of beef ban and the volatile situation in Jammu and Kashmir. “Modi talks about beef ban, but in the last three years India has been the largest exporter of beef… In Kashmir, bodies of soldiers are being mutilated every day…Are these the real achievements of the Modi government?”last_img read more

Netflix has a new Logo Do you like it

first_imgAdvertisement Video on demand service Netflix has a new logo!This is the second time Netflix has changed its logo. The first change took place in 2014, when it switched from its DVD-era logo with a red background and old-school typeface to a flatter, more minimal design.For Comparison sake, have a look at the old and new logo side by side. – Advertisement – The new logo comes in handy across a variety of platform and is easy to identify with.Tell us in the comments. Do you like the new look or you prefer the old one?last_img read more