Here is what’s happening in the markets today:
- President Jacob Zuma has been handed an 8-point plan by business leaders on how they believe the South African economy can be saved from a junk rating. The plan includes acceptance of a tax hike – but with the plea that it be broad-based, such as in VAT or through the fuel levy. A marginal tax on the wealthy was also accepted. Finance Minister Pravin Gordhan will deliver his budget speech later in February.
- The Free Market Foundation is going to the High Court to challenge the constitutionality of collective bargaining. Currently agreements reached through collective bargaining are extended across industries that are not party to negotiations, and the group wants this changed, calling it unjust and unconstitutional. The group alleges the current laws are open to collusion between big business and unions.
- South African stocks ended in the red for the second consecutive day on Tuesday as resources and financials weighed on the JSE. The rand strengthened against the dollar, however, in line with a with a stronger euro. On Wednesday the rand is trading at R16.05 to the dollar, R23.23 to the pound and R18.12 to the euro.
- In global markets, Asian stocks once again took a hit as uncertainty over global banks in Europe weighed. This pushed investors into safer assets, which was good news for the Japanese Yen. In the states, markets are still bracing for the US Federal Reserve’s cues on policy, which is expected this week.
- Global oil prices continued to push upwards, increasing by over 2% again to $31.02. Prices were supported by comments from Iran’s oil minister that Tehran is ready to negotiate with Saudi Arabia over the current conditions in global oil markets – though volatility is still expected as the price remains susceptible to further weakness in the market.
In other news: Research done for e-toll opponent, Outa, has found that the cost to construct roads in South Africa is more than double global benchmarks. Outa head Wayne Duvenage said this points to more than just collusion, but also maladministration and corruption in the system.