On Friday Standard & Poor downgraded South Africa’s sovereign rating. This is the latest blow to Africa’s largest economy as it battles a wave of industrial action. S&P said it was lowering the country’s long-term foreign currency sovereign credit rating to BBB from BBB+ because it believed wildcat strikes in its vital mining sector could feed into the political debate in the run-up to the 2014 elections, increasing policy uncertainty and economic instability. The rating action follows a similar move by Moody’s in the wake of the industrial strife that began in the South Africa’s platinum belt in August and has spread to gold and iron ore. The strikes began at Lonmin, the London-listed platinum miner, who only resolved the dispute after agreeing to wage increases of up to 22 per cent. (Financial Times*)
Finance & Banking
US woman takes on banks over Libor
A pensioner whose home was repossessed is taking some of the world’s leading banks to court, claiming that alleged Libor manipulation made mortgage repayments for thousands of Americans artificially expensive. The class action, filed in New York, alleges that traders at 12 of the biggest banks in Europe and North America, including Barclays, Bank of America and UBS, were incentivised to manipulate the Libor rate on certain dates, resulting in homeowners paying more between 2000 and 2009. The plaintiffs, who could number 100,000, have lost thousands of dollars each, says their attorney, John Sharbrough. He declined to give a figure on the total damages his clients are seeking. (Financial Times*, CNBC)
Policy & Research
Government floods water industry with R&D funding
The water industry has received funding of more than £2.5m from the UK Government to deliver innovative projects to safeguard future water supplies. Seven major collaborative research and development projects will receive the money funded jointly by the Technology Strategy Board, Department for Environment, Food and Rural Affairs (DEFRA), Natural Environment Research Council (NERC) and Engineering and Physical Sciences Research Council (EPSRC). The projects will address overseas and UK water security challenges by creating a new technology or process that will either save or recycle one billion litres of water per day. The total cost of the projects, including contributions from the participating companies, is in excess of £5.6m. (Edie)
Food & Beverage
Drinks groups sue over New York’s ‘supersize’ ban
The US drinks industry is taking the administration of Michael Bloomberg, New York mayor, to court over its decision to ban sales of “supersized” sugary drinks. Trade groups led by the American Beverage Association filed a lawsuit late on Friday attempting to block the rule, set to be imposed next spring. The approved proposal would ban the sale of sugary drinks in portions larger than 475ml. The group filing the lawsuit claim that it will damage thousands of small businesses in the city. The action comes as the US drinks industry faces regulations over labelling and taxation of their products, in response to their poor health record. Opponents of the ban, such as Coca-Cola and PepsiCo, fear that it harms the reputation of their products, and that other cities will follow New York. (Financial Times*, Reuters)
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