26 employees for 1,200 km of fibre, and crypto’s blame game begins

The primary focus of local markets this week will be the Reserve Bank’s Monetary Policy Committee meeting on 23 September. 

FNB said the balance of risks has shifted significantly since its last meeting, where it left the repo rate unchanged at 7.00%. 

The main driver of this shift is external, with oil prices rising sharply and the US Federal Reserve hiking interest rates earlier in September. 

Fed Governor Kevin Warsh announced a 25-basis-point hike, the first such action by the Fed in three years, on 16 September. 

Warsh also said the Fed expects another interest rate hike before year-end. This indicates interest rates will be higher for longer. 

FNB said the combination of higher oil prices and rising global interest rates poses an upside risk to local inflation. 

This makes it more difficult for the Reserve Bank to look through the current inflation shock without taking action. 

In particular, higher interest rates in the United States have strengthened the dollar against the rand, which closed last week at R16.27. 

This makes it more expensive for South Africa to import goods, pushing inflation higher and pushing the Reserve Bank to hike rates to defend the currency. 

On the company side, the week ahead is relatively quiet, with Remgro surprisingly releasing its full-year results late on Friday. 

The Johann Rupert-controlled company posted stellar results, with headline earnings jumping by 42.3% to R11.14 billion. 

While the company benefited from R1.02 billion in material one-off items, its underlying headline earnings still grew by 29% when these items are excluded.

The investment giant also revealed that its free cash flow rose by 105.6% to R8.31 billion.

WBHO is expected to release results this week, which may give an indication of infrastructure spending in South Africa. 

As the last major construction giant on the JSE, this company is the sector’s last bellwether on the exchange. 

Important finance and investment news

Joburg’s fibre disaster: Johannesburg’s Metropolitan Tech Company has only 26 employees to maintain 1,200 km of fibre. This has left the goal of expansive public Wi-Fi and digital technology a dismal failure. [BusinessDay]

Crypto’s blame game: The Clarity Bill has collapsed in US Congress, with the industry’s de facto head, Coinbase CEO Brian Armstrong, saying he would rather have no bill than a bad bill. The bill would have seen digital assets play a greater role in mainstream finance. [Wall Street Journal]

Nvidia doubling up: Nvidia CEO Jensen Huang said he expects the company to sell twice as many chips in the coming year as it did over the past 12 months. [Yahoo Finance/Bloomberg]

South Africa pulling out all the stops: International Relations Minister Ronald Lamola is currently in the United States to engage with policymakers and improve strained diplomatic relations. Lamola is there for a working visit to hold engagements with key decision-makers and to hold several bilateral meetings with diplomats and us lawmakers. [EWN]

AI leaders to playing both sides: AI safety worries are hanging over Chinese leader Xi Jinping’s visit to Washington next week, which is attracting big names in the tech world. OpenAI’s Sam Altman will attend the state dinner that President Donald Trump is hosting for Xi and Nvidia’s Jensen Huang and Apple’s Tim Cook are reportedly attending, too. [Semafor]