5 things you need to know before trading starts today
·22 Apr 2016
Here’s what is happening in the markets:
- The presidency has denied it is “bullying” SA banks by launching a ministerial probe into why they dropped Gupta-owned businesses. Minister Jeff Radebe announced on Thursday that three cabinet ministers would ‘interact’ with Absa, Standard Bank, FNB and Nedbank. Radabe said there is concern the move would discourage investment in the country – but said that the probe wasn’t an investigation or any sort of bullying tactic.
- The Gupta family’s new auditor says that there is no professional or ethical reason that it should not do business with the Oakbay group of companies. SizweNtsalubaGobodo announced this week that it would take over as the Gupta family auditor, after KPMG dropped the family’s businesses, citing reputational and association risks. According to SNG, it ignored the media and political interest in the family in making its decision.
- South Africa’s rand weakened against the dollar on Thursday, weighed down by the potential for a more hawkish US Federal Reserve’s policy review next week. South Africa’s central bank, meanwhile, is worried that a sharp weakening of bonds and pending ratings decisions could badly affect investor sentiment towards the country while increasing the cost of funding government debt. On Friday the rand was trading at R14.29 to the dollar, R20.49 to the pound and R16.13 to the euro.
- In global news, Asian shares slid from a 5 1/2-month high on Friday as disappointing earnings from US blue chip companies poured cold water on the rally that took off in March. Wall Street suffered its first loss in four sessions after a mixed bag of quarterly reports and a warning by Verizon Communications that a strike by workers would likely impact its bottom line.
- Oil prices rose in Asian trade on Friday, setting crude futures on course for one of their biggest weekly gains this year, as sentiment has become more upbeat despite ongoing oversupply. Brent crude futures were trading at $44.98 per barrel, up 45 US cents, while US crude was up 50 US cents at $43.68 a barrel.
In other news: Opposition parties are calling the Seriti Commission of Inquiry findings into the arms deal a farce, saying that it wasted taxpayers’ money to shield president Jacob Zuma. After a 4 year investigation, the commission found that there was no corruption involved with the South African arms deal.
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