Here is what’s happening in South African markets:
- Standard & Poors says that Budget 2016 was simply not enough to warrant any movement on the axe hovering above South Africa, threatening to cut the country’s credit rating to junk. The group said the budget speech offered only a temporary reprieve, failing to address any long-term solutions to spur GDP growth and boost business confidence.
- Meanwhile, Finance Minister Pravin Gordhan reportedly threatened to resign last week – a move which would have massively negative implications for the country – following a further souring of his relationship with SARS commissioner, Tom Moyane. According to report, the minister gave an ultimatum to president Jacob Zuma saying “Moyane must go, or I must go”.
- Eskom CEO Brian Molefe is desperate for a R5 billion cash injection which is being withheld by Treasury. The power chief expressed frustration at the “arbitrary” decision to delay the payment, arguing that Eskom has complied with all conditions attached. Treasury, under former finance minister Nhlanhla Nene, agreed to pay Eskom R23 billion in three separate payments.
- In local market news, the rand recovered on Thursday after plunging on Wednesday when a budget speech by the finance minister failed to convince investors the economy’s prospects were improving. The rand pulled back to R15.57 on Friday, after falling as low as R15.76 on Wednesday. The rand is trading at R21.76 to the pound and R17.22 to the euro.
- In global markets, Asian shares made guarded gains on Friday as a gathering of world finance leaders provided a welter of reassuring comments, but little in the way of actual policy stimulus. Wall Street posted solid gains on Thursday as higher oil prices reduced fears that banks could be hit by debt defaults and investors saw opportunities after weeks of volatility.
In other news: Following a week of unrest at universities in South Africa, University of Pretoria vice chancellor, Professor Cheryl de la Rey has said enough is enough, and the university will adopt a zero-tolerance policy to violence and crime at the institute. The university says it remains committed to “peaceful engagements”.