5 things you need to know before markets open today
·11 May 2016
Here’s what is happening in the markets:
- The government’s R1.85 trillion investment fund – the Public Investment Corporation – has shed some light on some of its unlisted investments, which includes R890 million which was plugged into Iqbal Surve’s Independent Newspapers in 2013. Government’s investment in the media company was met with speculation and criticism at the time. The PIC is expected to reveal more about its unlisted investments soon.
- Investors are still worried about South Africa hitting junk status in the coming weeks, despite ratings agency Moody’s keeping the country’s level at two notches above junk. Two more agencies, Fitch and S&P, are expected to deliver their assessments starting in June. Investors have pointed to income shrinkage, high levels of unemployment and creeping economic growth as key precursors to a downgrade.
- South Africa’s rand clawed its way back from six week lows against the dollar on Tuesday as a firmer oil price lifted commodity currencies, but analysts said concerns over the ailing domestic economy would cap any significant gains. On Wednesday, the rand was trading at R15.12 to the dollar, R21.86 to the pound and R17.22 to the euro.
- In global news, Asian shares gave up early gains and turned lower on Wednesday as investors shrugged off an overnight rally in global stocks and looked to bonds in the absence of signs of a sustainable recovery in China and other emerging markets. US stocks rose across the board on Tuesday, with a jump in oil and a rally in Amazon.com helping propel the S&P 500 to its best day in two months.
- Oil prices dipped on Wednesday as Canadian oil sand production was expected to gradually ramp up following forced closures due to wildfires, and as record crude inventories especially in the United States put pressure on markets. Brent crude futures were trading at $45.49 per barrel, down 3 cents, while US crude futures were down 8 cents at $44.58 a barrel.
In other news: The Payments Association of South Africa (PASA) is preparing to tackle the problem of unauthorised debit orders by implementing fines for every unmandated debit order processed. Banks have been slow to do anything about dodgy debit orders, which are typically processed in amounts under R100 to avoid notifying victims.
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