5 things you need to know before trading opens today
·18 Mar 2016
Here’s what’s happening in the markets:
- President Jacob Zuma remained defiant as he laughed and dodged questions from opposition parties about allegations that the politically-connected Gupta family was influencing who gets appointed to Cabinet. Zuma denied any links to the claims, which put him in an awkward position ahead of the ANC’s National Executive Committee meet which takes place this weekend.
- Meanwhile, former ANC MP Vytjie Mentor has opened up about her meeting with the Guptas, in which she claims she was offered the role of Public Enterprise Minister a few days before a Cabinet reshuffle – as long as she dropped an SAA route to India and gave it to the Guptas. Former DPE minister Barbara Hogan said she faced similar pressure. Mentor said Zuma was in the other room – and spoke to her after she declined the offer.
- The South African Reserve Bank took the decision to hike interest rates once again, moving the repo rate up by 25 basis points to 7.00%. The move relieved some pressure on the South African rand, which was being bounced around by political maneuvering surrounding the Gupta revelations, reversing losses over the previous sessions. On Friday the rand was trading at R15.22 to the US dollar, R22.00 to the pound and R17.22 to the euro.
- In global news, Asian shares edged higher on Friday, oil touched a 2016 high and the U.S. dollar weakened as investors turned more positive on riskier assets after the Federal Reserve’s cautious stance on further interest rate increases. Chinese home prices rose at their fastest clip in almost two years in February thanks to red-hot demand in big cities. Still, risks of overheating in some places combined with weak growth in smaller cities threaten to put more stress on an already slowing economy.
- After surging more than 10% over the prior two sessions, US oil advanced to $40.55, the highest level since 4 December. Brent crude held close to its three-month high of $41.60 reached in the previous session and again on Friday. It’s headed for a 2.8% gain for the week. Oil’s rally has been aided by a weakening dollar, triggered by the Fed’s cautious approach to raising rates.
In other news: The controversial Gupta family has hired a top UK public relations group – which previously aided the IFP and FW de Klerk – to handle their image in South Africa. The company’s executives reportedly once claimed they were able to drown out negative coverage through unorthodox means.
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