5 things you need know before trading opens today
·15 Jun 2016
Here’s what is happening in South Africa:
- Talk of the Brexit is expected to have an impact on many relations between South Africa and the nations involved. Britain will hold a referendum on Thursday to decide whether to say in the European Union or not. Aside from a potential knock to economic growth that SA can ill-afford, many other business agreements would need to be renegotiated, should the exit go through.
- South African retailer Pick n Pay has agreed to collapse its pyramid business structure, after many years of pushing from shareholders to do so. However, the Ackerman family will remain controlling shareholders, raising eyebrows. Some shareholders say that with the family still in control, it;s unlikely to see much change. Pick n Pay is lagging competitors in profit share in the retail market place, and has done so for the past decade.
- South Africa’s rand lost ground on Tuesday after the current account widened more than expected in the first quarter, raising the likelihood of more interest rates despite the economy creeping toward a recession. On Wednesday the rand was trading at R15.27 to the dollar, R21.65 to the pound and R17.14 to the euro.
- In global news: Asian shares were slightly weaker but recovered from near three-week lows on Wednesday as markets digested US index provider MSCI’s decision not to include domestic Chinese equities in its indexes and Brexit fears drove investors to assets such as U.S. bonds and the yen. Wall Street dropped for a fourth straight session on Tuesday
- Crude futures fell on Wednesday as mounting concerns about Britain’s possible exit from the European Union and a surprise build in US inventories left investors ignoring an IEA declaration that oil markets are now in balance. US crude was trading down 69 cents at $47.80 a barrel. Brent was also down 71 cents at $49.12 a barrel.
In other news: Social Development Minister Bathabile Dlamini – who says that South Africans can live on R753 a month – is keeping tight-lipped on her R11,000 overnight stay at a luxury hotel in Durban. The minister’s spokesperson said she would not comment on “corridor gossip”, leaving the DA to find the answers through parliamentary processes.
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