Here’s what is happening in the markets:
- Business leaders have again met with Finance Minister Pravin Gordhan ahead of his budget speech to discuss how to fight off a looming rating downgrade and to boost economic growth. This is the third round of meetings on the matter, after the State of the Nation Address by President Jacob Zuma left economists and business leaders disappointed, with no real meat or plan to fix the country.
- A deal between state-owned arms manufacturer Denel and a Gupta-associated company has not been approved by Public Enterprises Minister Lynne Brown or by Treasury – making it illegal under the Public Finance Management Act. Brown said that the deal needs to meet a certain conditions to get her approval for the deal – conditions which have not yet been met.
- South African stocks and the rand gained on Monday as emerging market assets were boosted by comments from the Chinese central bank which suggested it was not going to further devalue the yuan, easing fears about global deflation. The rand is now trading at R15.73 to the dollar, R22.69 to the pound and R17.55 to the euro.
- In global markets, the news out of China also allowed Asian shares to extend their gains. The market was also boosted by a rebound in oil prices and solid US consumption data. Wall Street was closed on Monday for the President’s Day public holiday, but saw a market rally late on Friday boosted by financial and commodity shares.
- Oil prices jumped above $30 a barrel on speculation that exporters were planning to cut supply. US oil was 5% higher near $31, and benchmark crude was at $35 – up 3.5%. Locally, petrol prices are expected to come down by as much as 50 cents next month, provided the oil prices and rand strength remain at the current levels. However, all eyes are on the budget speech at the end of the month.
In other news: Anglo American has had its credit rating downgraded to junk status. Moody’s downgraded the firm to a Ba3 rating from Baa3, and said the outlook for the company was negative. It does not expect Anglo to generate enough operating cashing flows to reduce its debt over the next two years.
Join the conversation Autoload comments
Comments section policy: