5 things you need to know in business today
·7 Jun 2016
Here’s what is happening in the markets:
- Ratings firm S&P Global has warned that the political situation in South Africa threatens to destabilise the country’s economy. Divisions within the ANC could create a stumbling block for policy implementation, which spells bad news for the country’s bid to turn the economy around. The group saw political division increasing the closer we get to the 2016 local elections in August.
- The State Fuel Fund has defended its sale of 10 million barrels of crude oil, saying that any fuel crisis the country may face won’t be down to a lack of crude, but rather a lack of diesel and petrol. The group explained in detail how the fuel rotation process worked, and how it has been done before – in 1999 – without any issues.
- South Africa’s rand rose to its firmest in nearly one month on Monday while government bonds also strengthened after S&P Global Ratings affirmed the country’s investment-grade credit status on Friday. On Tuesday, the rand was trading at R14.94 to the dollar, R21.68 to the pound and R16.97 to the euro.
- In global news: Asian stocks hit a five-week high on Tuesday after US Federal Reserve Chair Janet Yellen gave a largely upbeat assessment on the US economic outlook, while the dollar declined on diminishing expectations of interest rate increases in coming months. The S&P 500 closed at a 7-month high on Monday as Federal Reserve Chair Janet Yellen painted a mostly upbeat picture of the economy but gave little sense of when a rate hike may be coming.
- Brent crude prices inched lower on Tuesday after hitting a seven-month high a day earlier, but market momentum appeared strong on a weak dollar, French refinery restarts, Nigerian oil infrastructure attacks and falling US crude inventories. Brent crude settled up 91 cents, or 1.8 percent, at $50.55 a barrel, while US crude rose $1.07, or 2.2 percent, to settle at $49.69.
In other news: Malls in Johannesburg and Cape Town have increased security in the wake of terror warnings out of the the USA and the UK. The countries issued an alert over the past two days warning that terrorist may attack locations in South Africa frequented by foreigners – such as shopping malls.
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