Money floods out of South Africa, and Ramaphosa responds to Jonas slip

South African markets firmed on Wednesday as the United States trade war continued to weigh on the dollar.

Gold was pushed to a record high as investors looked for safer assets amid a heightening tariff war between the US and China.

As has been the case since US President Donald Trump launched the trade war on 2 April, global uncertainty around the tariffs—as well as the chaotic and erratic announcements related to them—has dominated market direction.

Local investors also had the future of the Government of National Unity (GNU) to consider, with uncertainty around the 2025 budget still hanging in the air.

While political parties have now seemingly agreed that a 0.5 percentage point VAT hike should not go ahead on 1 May, there is now legal doubt whether it will be possible to avoid.

Agreement over the VAT hike also does not remove internal GNU tensions, particularly those between its two biggest parties, the ANC and the DA, who are ideologically opposed on many fundamentals.

The global and local environment have kept the rand under pressure, with the unit trading at R18.86 to the dollar, R24.94 to the pound and R21.45 to the euro.

Global oil markets also remain under pressure, but prices have lifted to above $65 a barrel, currently trading at $66.57.

Here are five other important things happening in South Africa today:

Ramaphosa backs Jonas: The office of president Cyril Ramaphosa has defended the president’s choice to send former deputy finance minister Mcebisi Jonas as a special envoy to the United States, despite his previous criticisms of US president Donald Trump resurfacing. The president said that he does not believe Trump is someone who holds grudges, and Jonas’ comments were made when he was not serving in government. [TimesLive]

Money flooding out of South Africa: According to JSE data, foreign investors sold R3.4 billion worth of South African equities last week, bringing their total year-to-date sales to R94.8 billion. This is nearly triple the value of shares sold by foreign investors during the same period last year, continuing a decade-long trend of investors taking money out of South African assets. [Daily Investor]

Solar storm hits SA systems: The South African National Space Agency space weather centre reports that a solar storm hit the Earth that impacted satellite navigation systems in South Africa. The agency noted that the sun is currently near “solar maximum” — a period of heightened solar activity in the star’s approximately 11-year cycle. Intense solar storms tend to happen near solar maximum. [MyBroadband]

Godongwana on a mission: Finance minister Enoch Godongwana and Reserve Bank governor Lesetja Kganyago will be heading to the United States this weekend to engage in multilateral meetings, which are expected to be the most difficult and most important it years. The meetings come amid tensions between SA and the US, and ahead of IMF and World Bank events next week. [BusinessLive]

Two-Oceans Marathon in trouble: The City of Cape Town has pulled sponsorship and support of the iconic Two-Oceans Marathon in the Western Cape, following permit breaches by the event organisers. The event runners reportedly allowed thousands more to compete in the event than permitted, putting safety and security at risk. The organisers said they were seeking legal advice and would not comment. [News24]