• Joining forces to rally behind the launch of a social movement to condemn the events of the past week and show the world that we are not giving in to hatred.
• Calling on all South Africans to share their stories of hope and reconciliation and unity.
• Use #ThisIsUs to show the world who we are.

Over the past week, we have watched in anguish as some parts of our country experienced extreme levels of lawlessness. It’s a scary time in South Africa. For us all. We are all angry, we are all scared, we are all heartbroken and we are all feeling helpless. Almost numb. At a loss for words.

Our ideal cannot end here.

#ThisIsNotUs

As we commemorated our beloved Madiba’s birthday this past weekend, it is a time for all of us to reflect on his legacy and to help our country get through this difficult challenge we are facing by recommitting ourselves to the ideals of our democracy.

Corporate South Africa, a host of media partners and organisations representing business interests are joining forces to rally behind the launch of a social movement to condemn the events of the past week and show the world that we are not giving in to hatred.

That we cannot be plagued by fear, raged by anger, and gripped by violence.

“You will note #ThisIsNotUs and #ThisIsUs is not Absa-branded, but an effort to rally ordinary South Africans and other corporate and business partners to join the movement, to take a stand against the violence and hatred of the past week and share our stories of hope and reconciliation and unity,” says David Wingfield, Head of Marketing of the Absa Group.

Using #ThisIsNotUs and #ThisIsUs, we are calling on all South Africans to show the world that hate cannot be replaced with hate and that retaliation will not put an end to violence.

“While the situation seems dire, we dare not lose hope. The idea of starting this movement was born from a conversation we had earlier this week with our advertising agency, Grid Worldwide. We agreed that something had to be done. This is the spirit of Africanacity, our commitment to helping people find a way to get things done,” notes Wingfield.

“As an organisation that is part of the fabric of our society, and which cares deeply for our collective future, we are standing up and uniting with many of our peers in saying #ThisIsNotUs. Today we begin another long walk to rebuild our country, and all South Africans have a role to play to bring an end to this hatred, violence and chaos.”

The month of July, and Mandela Day this Sunday, is a time to observe the legacy of Madiba, who never forgot the importance of serving and helping others to “create a better world for all who live in it.

All South Africans are called upon to join the movement and use #ThisIsNotUs to show the world that we condemn the ugliness, the hatred, the fear. It is not who we are.

In addition, South Africans are also called upon to use #ThisIsUs to get behind the growing number of communities and brave individuals who are stepping up, who are making a difference, who are reaching out, and getting involved in a positive way.

“During the past week we have seen scores of volunteer groups who have set up cleaning efforts in looted shopping malls and communities, and donations in the form of money, transport and food to those affected. Let’s get those stories out there, use #ThisIsUs when you witness acts to rebuild our country in your community,” Wingfield explains.

“We need you to get the message out there, and the social media collateral was created for all South Africans to use and share.”

For more information on the movement, click here.

The seasonally adjusted Absa Purchasing Managers’ Index (PMI) edged down slightly to 57.4 index points in June 2021 from 57.8 in May 2021. All 5 of the headline PMI’s major sub-components were above the neutral 50-point mark in June. Furthermore, the average reading of both the headline PMI as well as the business activity index during the second quarter was higher than recorded in the first quarter of 2021. This suggests that the sector’s output recovery was maintained in the second quarter, with another quarterly expansion likely. A significant annual expansion is effectively guaranteed given the extremely low base set in the second quarter of 2020.

However, the move to adjusted alert level 4 lockdown restrictions at the end of June, especially if sustained for longer than the initial two-week period, could stall the broader economy’s quarterly growth momentum at the start of the third quarter. This could result in a possible slowdown in the demand for selected manufactured goods and production as a result. Indeed, amid concerns about the magnitude of the third wave of COVID-19 infections and South Africa’s move from level 2 to level 3 in mid-June, purchasing managers’ assessment of expected business conditions already turned less positive in June. The index tracking expected business conditions in 6 months’ time declined for a second month to 59.3, signalling an anticipated improvement in business conditions, just less so than before. The move to level 4 is likely to have soured expectations further, specifically for those businesses with close ties to the hospitality industry. On the positive side, the outlook for manufacturers targeting the European and US export markets remains very bright, with recent international PMI readings remaining at or near record-high levels.

The June PMI results suggest that while growth in new sales orders and business activity slowed somewhat, both remained very strong. Indeed, on the demand front in particular, after dipping somewhat in May, export sales also returned to positive terrain. Overall, the business activity index dipped to 56.2 index points from 58.8 in May, while sales orders declined to 57.3 from 60.5 the month before. Another positive development was the return of the employment index to above the neutral 50-point mark. However, even if this means that job losses in the sector have now stopped, the factory sector has a long way to go to regain its pre-COVID level of employment.

The purchasing price index moved lower for a third consecutive month and is now back in line with February’s level. Another diesel price increase expected next week could put renewed pressure on costs, which remain high. In all likelihood, the decline in the index merely signals a slowdown in the pace of increases. The index declined to 83.6, down from March’s recent high of 89 points, but still about 10 points above the level recorded in June 2020.  

• PMI June Report 2021
• PMI June infographic 2021

Absa announced the launch of a partnership with Daily Maverick to make the risks of the global climate crisis a bigger focus of everyday life – with practical approaches on how to address them.

Spurred by the threat of Day Zero – when it was forecast Cape Town would run out of potable water – Daily Maverick decided to tackle the climate crisis head-on. What was originally intended to be an intermittent series called Our Burning Planet has become a fully-fledged unit in the Daily Maverick editorial team, concentrating on the catastrophes that happen when bad governance and climate change collide.

From travelling to rural areas to see how weather changes have transformed food production and livelihoods, to speaking to scientists and uncovering corrupt business deals that threaten healthy ecosystems, the path was clear: help South Africans understand that we are in a climate crisis, how it affects them and how we can address the key risks for the region.

Already achieving massive impact with its investigations and reporting, the Daily Maverick team has received support from Absa, who have helped fund independent research into the key climate risks for the SADC region in 2020. The relationship with Absa has grown into greater support of the Our Burning Planet effort through an annual sponsorship and grant funding.

The response to the climate crisis is everyone’s responsibility and Daily Maverick is stepping up its response with impactful investigative journalism. Partnering with corporate South Africa is essential in supporting these initiatives that stand to make a real difference to the future of the country – and planet – for us all.

“The COVID-19 pandemic has reminded us that global challenges require global coordination and brave action.  At Absa we recognise Africa’s vulnerability to climate change, and together with like-minded media partners such as Daily Maverick and their team of dedicated journalists, we hope to stimulate public debate, shift policy and contribute to creating sustainable and value-creating solutions to some of Africa’s greatest environmental challenges,” says David Wingfield, Head of Brand at Absa Group. “We are really proud to be a media sponsor of Our Burning Planet project, to bring readers the hard-hitting, impactful journalism that Daily Maverick is known for.”

“We’re excited that our vision for reporting on the climate crisis aligns with Absa’s strategic focus. We’ll be able to invest more into our already impactful editorial efforts and help showcase Absa’s support for the cause,” says Daily Maverick CEO Styli Charalambous. Of highest priority for the Daily Maverick team is getting as many South Africans as possible to fully participate in efforts to slow down and minimise the impact of climate change. “The journalism we produce will be freely available for other publishers to use because this is bigger than any one organisation’s ambition in the space,” Charalambous adds.

The partnership with Absa is built on, and with, Daily Maverick’s well-established reputation for journalism of the highest quality that maintains editorial integrity and independence in conducting all investigations. “Editorial independence is sacrosanct in all that Daily Maverick does. We are proud to enter into a relationship with a company that recognises the value of a free and independent press and one that supports our editorial vision,” says Daily Maverick Managing Editor Jillian Green.

To stay up to date with the latest investigations, reporting and developments around the crisis, readers are invited to subscribe to the Our Burning Planet newsletter, and encouraged to be part of the conversation that shapes the future of climate crisis response in the Southern African region.

CDC Group provides $50m risk sharing facility to Absa to support lending to small businesses and households through Microfinance and Non-Bank Financial Institutions in Africa 

• CDC Group’s first risk sharing facility supporting local currency medium and longer-term lending to MFIs and NBFI
• Boosts systemic liquidity in a highly credit-constrained environment and offers financial support to small businesses and households in hard-to-reach markets.

CDC Group, the UK’s Development Finance Institution (DFI) and impact investor, today announces a new $50m risk-sharing facility with Absa Bank Limited. The commitment increases Absa’s capacity to offer financing solutions to Micro, small businesses  and households across Sub-Saharan Africa through Microfinance Institutions and Non-Bank Financial Institutions (MFI & NBFIs).

This MFI and NBFI risk sharing facility is the first of its kind for CDC – supporting lending to these institutions (through credit risk mitigation) and allowing them to better serve households and small businesses across Africa. The facility will enable Absa to deploy significant sums of capital and provide vital assistance to businesses and households in need of finance, helping them remain resilient and emerge from the crisis. Moreover, the investment forms part of CDC’s COVID-19 response and boosts systemic liquidity at a critical time when commercial lending is limited due to the economic challenges brought on by the pandemic.

This investment bolsters Absa’s strategy to promote responsible lending practices among MFIs and NBFIs in its portfolio and highlights opportunities within the financial inclusion segment – sending a positive signal to commercial banks to increase their lending to this segment of the economy where considerable funding needs remain unmet.

CDC has a long relationship with Absa, Sub-Saharan Africa’s third-largest bank, and this latest investment reinforces the partnership between both institutions. This facility builds on the existing trade finance partnership, helping to enhance access to funds in the markets, facilitate increased trading of goods and services, and deepen financial inclusion among underserved communities and individuals across Africa’s markets.

Stephen Priestley, Managing Director, Head of Financial Services, at CDC Group, said: “We are thrilled to once again partner with Absa.  This is CDC’s first risk-sharing facility that provides a local currency solution to small businesses and local households. We are confident that CDC’s counter-cyclical funding will provide much needed support to local financial institutions by diversifying their funding base and enhancing their ability to provide smaller loans to local businesses and hard-to-reach communities. CDC remains committed to ensuring that businesses and people have greater access to the financial support needed to enable them to grow and remain resilient throughout the crisis.”

Anand Naidoo, Managing Executive: Client Coverage, Absa Corporate and Investment Banking said: “We are proud to have built this partnership with CDC, which does not only bring value to the relationship, but is also aligned to our overall business strategy. This facility is another proof point in the execution of our shared growth strategy which focuses on providing finance and assisting clients to achieve sustainable economic growth in the markets where we operate. 

“The framework details the use of proceeds, the process for project evaluation and selection, the ongoing management of proceeds as well as the reporting and transparency. There is a definite trend from global investors to invest in more socially responsible projects and companies because they want to see that their funds are being invested in activities that promote sustainable economic growth.” 

Absa hosted a virtual dialogue on their Art Hotspot platform to launch the debut solo exhibition by talented amateur artist and senior Absa executive, Karin Mathebula.

Mathebula, who heads Product, Sales and Service Enablement at Absa Relationship Banking, finds her inspiration in the South African landscape. Her exhibition, entitled  “Fusion of Hues”, is a collection that walks viewers through the landscapes of her youth, showcasing nature’s most brilliant and vivid colours. Juggling a challenging corporate career, Mathebula spent just over two years completing the 17 canvasses of her first art exhibition.

With this exhibition, Mathebula explored the themes of still life, beach and mountains. “I am inspired by the environment where I grew up, the sites and smells of the Underberg region of the southern Drakenberg. Even in the most barren landscape lies beauty. If you look closely, you will always find colour and  texture, and that is the beauty of life. Sometimes there are patterns that are not recognisable, but if you look closely, you will see beauty,” she said.  

During the virtual dialogue, hosted by Absa Senior Specialist Art Curator Dr Paul Bayliss, Mathebula shared her excitement about the new journey and mentioned that it has been a life-long dream of hers to be recognised as an artist. “I have been painting all my life. It’s a place I go to for refuge, to express myself and to see things in perspective,” she said.    

Absa is committed to bringing possibility to life by celebrating visual artists of all levels and backgrounds from across the African continent. “With this exhibition, we are now also bringing Karin’s possibility to life, by recognising and celebrating her unique style and skill,” stated Bayliss.

He was introduced to Mathebula in 2019 by Arrie Rautenbach, who heads the bank’s Retail and Business banking division, whilst attending Absa’s annual Champagne Festival. Bayliss immediately recognised the potential in her work and after paying a visit to her home studio,  suggested the possibility of staging a solo exhibition.   

“I was suitably impressed. The themes that run through Karin’s artwork capture the beauty and essence of the South African landscape. Karin has a very keen eye and her distinct use of colour, texture and shapes, bring her work to life,” he said.  Despite challenges brought about by the COVID-19 pandemic, Bayliss and his team worked alongside Mathebula to curate her exhibition and realise her dream.

With the pandemic altering our lives irreversibly, the so-called “passion economy”, where people monetize individuality and creativity, is fast gaining momentum across the globe. “Whether it’s playing video games, running online yoga classes, or selling niche fashion items, people are increasingly making a living by doing the things they love. Reinvent yourself, even if it means switching to a career path that gives you what you need. It’s never too late,” stated Mathebula. 

“Absa is a purpose-led organisation and it is our wish that everyone who experiences her art will come to understand what “following your passion” is all about,” concluded Bayliss.

The virtual exhibition runs until 25 August 2021.

To visit the Absa Art Hot Spot platform, click here.

To view Mathebula’s collection on the Absa Art Hot Spot, click here.

The thirty-fifth Annual General Meeting (AGM) of ordinary shareholder held as a virtual meeting via live webcast on Friday, 4 June 2021 at 10:00.

 

•  Absa AGM full speech 

The latest Absa Homeowner Sentiment Index (HSI) indicates that confidence in the South African property market has remained in line with the last quarter of Q4 2020, inching ahead 1% to end Q1 2021 at 81%.

Sentiment towards buying property has had its fourth consecutive quarter of sentiment improvement, ending Q1 2021 at 82%, the highest since the introduction of the HSI. Sentiment towards buying rather than renting also reached the highest level since the introduction of the HSI.

An emerging theme has been observed in the Q1 2021 survey – that of property renovations being leveraged to improve security. In this survey, 45% of respondents with a positive sentiment towards making renovations indicated that alterations are also an opportunity for improving security.

Sentiment towards buying property grew faster than sentiment towards selling property for the second consecutive quarter. The rally due to the low interest rate cycle on sentiment towards buying property has given way to property accumulating in value. This could be indicative of the anticipated price increases due to the widening gap between willing buyers and willing sellers.

The focus on affordability in the past few publications has been on interest rates, but what was also topical in this survey was affordability due to incidental property acquisition and ownership costs (transfer and maintenance costs). Non-property owners who prefer to rent, together with non-first time property owners have made reference to these incidental costs.

•  Absa Homeowner Sentiment Index Q1 2021 full report 

About the Absa HSI

The Absa Homeowner Sentiment Index (HSI) indicates the consumer confidence level regarding the property market in South Africa.

While understanding the overall confidence level of consumers gives us an important overall reference and hence remains important, we also measure various aspects of consumers’ confidence levels. We refer to these as “sub-indices” in this report and among these we measure sentiments about the current timing for buying, selling and investing in property.

For any questions please do not hesitate to reach out to us at  absahomeloans@absa.co.za.

Absa Group has developed a user-friendly online portal focused on providing additional opportunities for Africa’s Small, Medium and Micro-Enterprises (SMMEs) key drivers of post-pandemic growth. According to the World Bank, formal SMMEs make up 40% of GDP in emerging economies, with this number being significantly higher when informal SMMEs are factored in.

“Absa’s Procurement Market portal not only demonstrates Absa’s strategy of promoting responsible and inclusive procurement practices, but also ensures that all suppliers are aware of the bank’s service requirements; information that was not previously widely available,” comments Vusi Fele, Chief Procurement Officer at Absa Group Ltd. “What’s more, it will help us build mutually beneficial, thriving, inclusive and healthy supplier relationships.”

Absa’s goal is to promote two-way engagement and bridge the communications gap in terms of products, services, tenders and RFPs, ensuring that all relevant businesses are included. The platform will allow SMEs to access corporate supply, and at the same time enable Absa to further contribute to ongoing entrepreneurship development.

Fele firmly believes that a supplier diversity approach will assist in driving sustainability and progressively transform the bank’s supply chain. “Not only will we be able to identify suppliers that comply with B-BBEE requirements, but we will also be able to award/extend contracts to currently Exempted Micro Enterprises (EME) and Qualifying Small Enterprises (QSEs). We are also excited to welcome new suppliers to our business.”

Suppliers will be able to add their details to Absa’s database, and easily identify the procurement categories and services the bank is looking for, ranging from construction and marketing, to IT and cash management.”

In addition, qualifying SMMEs participating in the bank’s inbound supply chain become eligible for Absa’ Supplier Development Programme, which provides business support, training, mentoring, advisory and more. These businesses are also able to obtain development funding at favourable interest rates and with no or minimal collateral required, other than the committed spend contract to supply goods and services.

Fele encourages small businesses across the continent to visit the platform and sign-up. “We look forward to leveraging this portal to drive meaningful entrepreneurship development and deliver material benefits to local economic and social reform.”

The portal will be implemented across Absa’s operations, starting with South Africa next week.

The seasonally adjusted Absa Purchasing Managers’ Index (PMI) rose to a solid 57.8 points in May 2021 from 56.2 the month before. Four of the five subcomponents remained well above the neutral 50-point mark with only the employment index dipping back into negative terrain. In all, the average level of the PMI recorded in the first two months of the second quarter of 2021 (57 points) is well above the first quarter’s average (53.8), which suggests that the sector is on track to record another quarterly expansion. A significant annual expansion is effectively guaranteed given the extremely low base set in the second quarter of 2020.

The new sales orders index regained last month’s loss and rose to 60.5 index points in May. This was despite respondents noting a dip in export sales, which means that domestic demand likely drove the improvement. On the back of higher orders, business activity increased by a robust 8 points to reach 58.8 points in May. Inventories also improved, rising to 61.4 points during the month. However, after a surprising surge in April, the employment index dipped back below the neutral 50-point mark in May.

The purchasing price index nudged down further in May 2021, albeit that 87.1 points is still an elevated level for this series (for example, last year’s average reading was 73 points). While the stronger rand exchange rate helps to alleviate some cost pressure, prices of some raw materials and intermediate goods have risen sharply during recent months. Higher electricity and fuel prices, with another diesel price hike from tomorrow, add to the upward pressure to costs. Indeed, the recent high readings of the PMI’s price index correspond to the official producer price index (PPI) data published by Stats SA, which shows a marked acceleration for not only final factory-gate inflation but also in the prices of intermediate manufactured goods.

While current business conditions improved in May, purchasing managers turned slightly less optimistic about the trading environment going forward. The index tracking expected business conditions in six months’ time dipped to 63.5 in May, down from 67.9 in April. This could be as a result of concerns over a COVID-19 third wave. Even though government has to date adopted a softer touch to lockdown restrictions, a renewed virus-induced change in spending behaviour by consumers and firms could still hinder domestic demand. The ever-present possibility of disruptive load-shedding likely also remains top of mind for many producers.
 

• PMI May Report 2021
• PMI May infographic 2021