5 things you need to know before trading starts today
·19 Apr 2016
Here is what’s happening in the markets:
- More price woes for South African consumers as Nersa has approved a 7.6% increase in tariffs charged by municipalities. This is on top of the earlier increase of 9.4% granted to Eskom in April – which included at 7,8% increase in what it charges in bulk power to municipalities. The price difference means municipalities have to work harder to be more efficient.
- Former finance minister Nhlanhla Nene is now a private sector man, and has alluded that more jobs – that are not at the BRICS bank as claimed by president Jacob Zuma when he fired him – are in the pipeline. Nene was unceremoniously fired in December 2015, leading to a collapse in the South African economy. The economy has since clawed its way back, but the implication of Nene’s dismissal are still being felt.
- South Africa’s rand inched firmer and stocks rose late on Monday as the shock that global oil producers had not decided on an output freeze waned, handing emerging market assets a reprieve. On Tuesday the rand was trading at R14.38 to the dollar, R20.61 to the pound and R16.29 to the euro.
- In global news, Asian share markets rose to five-month highs on Tuesday, taking their cue from gains on Wall Street after a strike in Kuwait helped pull crude oil prices above their prior-session lows. The Dow Jones industrial average climbed to a nine-month high on Monday, in a market buoyed by Hasbro and Disney, as investors braced for a flurry of quarterly earnings reports through the week.
- Crude futures slipped on Tuesday on a persistent global glut and the failure of a producer meeting at the weekend to rein in the ballooning oversupply, although a sharp drop in output in Kuwait due to an oil worker strike underpinned prices briefly. Brent crude was at $42.78 a barrel, 13 US cents below their previous close. US futures were down 5 US cents at $39.73 a barrel.
In other news: State defence company Denel is sparking controversy once again having spent R3.4 million to force CEO Riaz Saloojee out of the company – without charging him for any offence. The move has raised suspicion in political circles, given the company’s recent ties to the Gupta family.
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