5 things in business you need to know today
·31 May 2016
Here’s what is happening in the markets:
- South Africa has performed poorly in a new global competitiveness report, where it was ranked among the lowest in terms of its ability to compete on a global platform. The country was dragged down by poor unemployment and government incompetence, as well as poor health conditions and high levels of pay disparity and inequality. Globally, the US gave way to china to take the top spot.
- The threat of a ratings downgrade is forcing South African companies from the bond market, Bloomberg reports. Corporate bond sales in the second quarter of the year dropped by 15% from the same time in 2015 – this compared to the 10% average across emerging markets. Higher yields and a “fear of the unknown” are behind the push.
- South Africa’s rand weakened on Monday, anticipating a likely credit downgrade this week and also under pressure from rising bets that the Federal Reserve could raise US interest rates. Stocks rose after food services company BidCorp jumped 12.5% as it made its debut on the JSE. On Tuesday the rand was trading at R15.79 to the dollar, R23.19 to the pound and R17.59 to the euro.
- In global news, Asian shares recovered from a wobbly start on Tuesday, but remained on track for a monthly loss, while the dollar edged away from recent peaks scaled on expectations the US Federal Reserve will raise interest rates as soon as next month. Wall Street rose on Friday and capped off its strongest week since March. Monday was a business holiday in the states.
- US oil prices were lifted early on Tuesday by the start of the peak demand summer driving season, although international fuel markets were weighed down by rising output in the Middle East, which mostly serves Asian customers. US oil futures were trading at $49.50 per barrel, up 17 cents from their last settlement. Brent crude oil futures were trading at $49.65 a barrel, down 11 cents from their last close.
In other news: Flu season has a big impact on the economy, with a new report showing that the average person misses 4.5 days of school or work due to an infection, costing the economy as much as R2 billion.
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