South African stocks fell for the third consecutive day yesterday as resource-linked companies continued to register losses due to the ongoing workers strike at Transnet ports.
Transnet’s recognized workers unions - the United National Transport Union (Untu) and the SA Transport and Allied Workers' Union (Satawu) - on Monday rejected a revised wage offer.
The JSE All Share Index fell nearly 1% to around 64 175 points by noon yesterday, the lowest since September 30, as the Transnet strike hampers exports of minerals, especially coal to Europe.
In intraday trade commodities-linked shares were leading the losses, with Thungela Resources falling 5.7% to R276.84 per share, South32 also lost 4.8% to R42.49 per share, while Glencore and BHP eased 2.7% and 2.4% to R96.93 and R452.64 per share, respectively.
Market sentiment was hampered by mounting concerns over the impact of the strike as Transnet has declared a force majeure across all South African ports.
The strike is estimated to cost the economy more than R6 billion a day, with more than R1 billion worth of export goods such as coal, berries, and others, stuck at the ports.
Momentum Investments head of fixed income Ian Scott said there was great uncertainty in the market with the current strike action at Transnet.
Scott said that lead times in production of the agricultural, industrial and manufacturing sectors were severely impacted by the strike, risking inflating input prices.
“This should be a great opportunity for South African coal exporters, but the opportunity is lost since the correct volumes of coal cannot be transported on rail and cannot be loaded onto ships at the harbours,” Scott said.
“This has a direct impact on the country’s ability to earn foreign exchange. There are plenty of examples of this nature, where the inability of Transnet to deliver on its mandate has a negative direct impact on South Africa gross domestic product growth.”
Yesterday, Transnet Port Terminals’ Western Cape leadership also met with members of the deciduous fruit industry to discuss contingency plans for the export of deciduous fruit from the Port of Cape Town given the current industrial action.
The deciduous fruit season is expected to fully commence at the end of October, and Transnet is working closely with industry to ensure that cargo with a limited shelf-life are prioritised at the ports.
Meanwhile, Transnet and worker unions concluded the first day of conciliation talks facilitated by the Commission for Conciliation, Mediation and Arbitration (CCMA).
Transnet spokesperson Ayanda Shezi said yesterday that the parties had agreed and signed on the picketing rules and picketing sites, and remained willing to find a solution on the wage negotiations issue.
Unions are demanding above-inflation salary increases of between 12% and 13% while Transnet initially tabled a wage offer of between 2% and 3%.
“The parties to the negotiations are considering alternative proposals and will reconvene on Wednesday to take the process forward,” Shezi said.
However, Satawu rejected Transnet’s revised wage offer of up to 5%, saying that its members would not take anything less than double digits.
Transnet on Monday proposed wage increases of 4.25% for employees at G and H grades, 4.5% for H and I grades, and 5% for L grade.
“As a union we believe that this is an insult to our members and the mandate from workers is very clear that we don’t come back without double-digit,” said Anele Kiet, Satawu’s deputy general secretary.
“So there was no need for the negotiating team to even consider what was on the table because it was far below what our members are expecting.”
The strike has drawn support from both Cosatu and Safety-aligned trade unions, with Nehawu saying Transnet management had shown total disdain towards workers while Numsa, which is not a recognised union at Transnet but has members there, said it will be making a joinder application to the CCMA.
Meanwhile, the Confederation of Employers in South Africa (Cofesa) called for ‘Pendulum Arbitration’ - otherwise known as final offer arbitration - as an alternative practical way of resolving labour disputes.
“We need to ensure that legal strikes are both peaceful and of shorter duration, without causing further damage to the economy,” Cofesa chairperson, Dr Lawrence McCrystal said.
“We submit that the introduction of compulsory “Pendulum arbitration’’, an internationally recognized mechanism, would ensure this ideal.”
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