Here is what’s happening in the markets:
- While talk of partially privatising power utility Eskom has all but been swept away, Public Enterprises Minister Lynne Brown said on Thursday that the private sector would be enlisted by Eskom to assist with South Africa’s power situation. The private sector would help de-mothball power stations she said. Last week, unit three of the R25 billion Ingula hydro pump storage scheme was synchronised, providing 333MW of power to the grid. Eskom has promised no load shedding in 2016.
- The South African Reserve Bank is expected to delay another rate hike until May, according to economists who were polled by Reuters. A majority of the economists polled expect the next quarter point rise at the May meeting, followed by another similar move in the third quarter, which would take the repo rate to 7.25 percent by end-year. South Africa’s rates have been hiked by 175 bp in the past two years.
- South Africa’s rand weakened on Thursday, weighed down by poor economic data, after surrendering brief gains made on the back of the European Central Bank’s (ECB) decision to expand its stimulus programme. Stocks ended slightly lower. On the ECB’s announcement, the rand flirted with R15 to the dollar but pulled back to R15.31 to the dollar on Friday. It’s trading at R21.85 to the pound and R17.10 to the euro.
- In global news The euro hung onto hefty gains in Asia on Friday after the European Central Bank eased aggressively but suggested it was running out of room to cut interest rates, even if other stimulus options remained. U.S. stock indexes ended a volatile session little changed on Thursday after the European Central Bank reduced interest rates but ECB chief Mario Draghi confounded investors who expected multiple rate cuts by saying more were unlikely.
- Oil prices rose over 1% on Friday supported by fresh investment and a weaker dollar, which makes crude cheaper for countries using other currencies, but analysts warned that any price rally was premature as a global glut remained in place. U.S. crude was trading at $38.66 a barrel, up 82 US cents, while Brent crude was at $40.73 a barrel, up 68 US cents. Locally, the CEF is reporting an under-recovery in the fuel price, pointing to a hike of up to 9 cents per litre of petrol and 50 cents for diesel.
In other news: Tshwane University of Technology vice chancellor Lourens van Staden said that recent student protests have caused over R20 million of damage. The VC said that security would be beefed up on campus while it was on lock-down for the next month.