Here is what’s happening in the markets today:
- South Africans should expect another rate hike in March, economists say. This after the country’s inflation rate breached the Reserve Bank’s maximum target of 6%, hitting 6.3% in January. Inflation is bad news for consumers and retailers, and may prompt another 25 basis point hike by SARB next month.
- South Africa’s rand strengthened more than 2% to its strongest level this year on Wednesday as higher-than-inflation bolstered the case for further interest rate hikes. The rand is currently trading at R15.49 to the US dollar, R22.11 to the pound and R17.26 to the euro.
- Moneyweb’s Executive Remuneration Tool shows that the pay gaps between executive directors and employees compares favourably with international trends. In South Africa executives are paid on average 21 times more than employees (36 times more including incentives), compared tot he 50 times ratio seen as acceptable internationally.
- In global markets, Asian markets were up on rising oil prices and a stong performance by Wall Street, shrugging off domestic data showing exports declined the most since October 2009. Wall Street saw its third consecutive day of gains, while the UK’s FTSE 100 was more mixed, expecting to open lower on Thursday, with its blue chip index having dropped almost 3% on Wednesday.
- Oil prices continued to rise after Iran endorsed plans by Russia and Saudi Arabia to cap production – though analysts say the move won’t lead to output cuts. US crude rose by 50 US cents to $31.16, breaching $30 a barrel, while Brent crude gained 42 US cents to $34.92. The Central Energy Fund is showing a 58-61 cent over-recovery for LRP fuel, and a 12 cent under-recovery for diesel.
In other news: Gupta-owned mine group Tegeta Exploration and Resources has acquired the rights to export 8 million metric tons of coal. The group recently completed its R2.2 billion purchase of Optimum coal mines, and holds at least 3 lucrative contracts to supply coal to Eskom power plants.