5 things you need to know before trading starts today
·16 Mar 2016
Here is what’s happening in the markets
- The Hawks investigative unit has finance minister Pravin Gordhan in its crosshairs and it is refusing to back down. A standoff between the two parties has intensified, with the police unit saying it will take action against Gordhan after he missed two deadlines to answer their questions relating to a so-called “rogue unit” set up at SARS under his watch. SA markets took a knock after the threat.
- Despite many denials, the Gupta family cannot shake its ties with the ANC government, president Jacob Zuma and the allegations of state capture. A former ANC member of parliament has stepped forward claiming that the Guptas had offered her a post in Cabinet – as long as she did a few favours. The claim has been denied by the family.
- South Africa’s rand plunged to its weakest in two weeks and bond yields jumped on Tuesday after police said they would exercise “constitutional powers” to push Finance Minister Pravin Gordhan to answer questions about a spy unit in the revenue service. On Wednesday the rand was trading at R15.94 to the dollar, R22.53 to the pound and R17.70 tot he euro.
- In global news, Asian shares were mostly lower on Wednesday while the dollar dithered as markets waited anxiously for the Federal Reserve to provide guidance on the risk of U.S. rate hikes this year. Healthcare and materials stocks pulled Wall Street lower on Tuesday in a second straight day of quiet trading.
- Oil prices rose on Wednesday after falling the previous session on expectations U.S. output will decline further as some producers are under increasing financial distress and as early inventory data showed a less-than-expected increase. U.S. crude futures were trading at $36.94 per barrel, up 60 cents – while Brent futures were up 40 cents at $39.14 a barrel.
In other news: King IV – the latest set of rules for business governance in South Africa – have been published for public comment. The 75 ‘rules’ principles that applied under King III have been reduced to 16, and non-listed companies, such as SOEs, are expected to be affected by the new report as well.
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