5 things you need to know before trading opens today
·6 Apr 2016
Here’s what is happening in the markets:
- President Jacob Zuma survived an attempt by opposition parties to have him impeached, thanks to an ANC majority in parliament. The ruling party bashed the opposition’s motion with 235 votes against the motion (vs 143 votes for). Zuma has been met with calls to resign from various group – including ANC stalwarts such as Trevor Manuel – ever since it was ruled that he had violated the Constitution.
- CareerJunction has released its salary review for 2016, showing the salary ranges for a plethora of jobs across 10 South African industries. The review is against a backdrop of tough economic conditions in the country – with price hikes across fuel, electricity and food – where monthly salaries have increased only marginally, and sometimes retracted.
- South African markets responded negatively to the outcome of the Zuma impeachment process on Tuesday night, with the rand weakening by more than 2%, partly on political risk jitters over the vote. Following the vote, the rand crumbled to R15.16 to the dollar, having broken past R15 to the dollar moment prior. By Wednesday morning, the currency had recovered somewhat but not enough to slip back behind the psychologically important R15/$ spot. The rand is trading at R15.02 to the dollar, R21.28 to the pound and R17.08 to the euro.
- In global news, Asian stocks held near three-week lows on Wednesday as concerns about the underlying strength of the Chinese economy dogged investors while oil prices jumped by nearly two percent on growing hopes a global output freeze may materialise soon. On Wall Street, stocks were down on Tuesday as investors took profits on recent gains ahead of a quarterly reporting season that is expected to reveal sharply lower earnings.
- Oil offered the sole bright spot in financial markets with prices extending their rebound after Kuwait insisted major producers will agree to freeze output later this month even as key player Iran continued to balk at the plan. Brent crude futures rose 1.6% to $38.48 per barrel, while US crude futures jumped 2.5% to $36.75 a barrel.
In other news: ANC chief whip Jackson Mthembu has admitted that the Constitutional Court ruling against president Jacob Zuma has damaged the party’s image, and that there is a lot that needs to be done on the ground among its voters to restore faith in the party.
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