5 things you should know before the JSE opens
·26 Jan 2016
Here’s what’s happening in the markets:
- All eyes are on the South African Reserve Bank which is expected hike rates when it holds its policy meeting, which is scheduled for sometime in the next three days (26 – 28 January). The bank is expected to release its monthly business cycle indicators today.
- On Monday, the rand steadied against the dollar at its strongest point in almost two weeks (R16.44), but the currency continues to face some trouble on Tuesday, slipping to R16.58 in morning trade due to global market conditions.
- Chinese shares are falling once again, leading to another sell-off in global equities and reviving concern about global growth. We have global oil prices to thank for this new slump, as prices once again dipped below $30 a barrel, pulling Asian markets lower. South African stocks ended weaker on Monday, dragged down by the resource and platinum sectors.
- Ratings firm Standard & Poor’s has issued a second warning in as many months, saying South Africa is heading for junk status. The firm said that government bailing out state-owned enterprises, along with persistent weak GDP growth, is likely to see the country missing its fiscal targets. S&P’s current BBB- rating for the country is the lowest investment grade – and the outlook is set to negative.
- Gold is climbing to a two-week high according to Reuters – this is due to falling equities market which is making bullion attractive as a safe-haven. Another factor impacting the gold price is the dollar which is also coming under pressure as the Federal Reserve meets against a backdrop of a slowing global economy.
In quick company news: Anglo Platinum is expecting to write off R14 billion worth of assets, giving it a loss of as much as R12.2 billion for FY 2015. Other platinum producers, Impala Platinum and Lonmin Plc are expected to follow suit.
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