|Aloha Captains of Industry
I trust the team is refreshed after all the holidays whilst still managing to write some business in the South African market.
Well, the advent of our recent national elections which appeared by and large peaceful and well-run has brought with it some fresh economic winds. I thought I’d take the liberty on behalf of GENUITY to update you in this next edition of our “MONTHLY MARKET VIEW” (should you wish not to receive this one-page monthly update, simply hit reject in the voting button above)
|(Banks prime lending rates) are officially on their way down to 12% from a high of 15.5% last year (Nov 2008) after today’s Monetary Policy Committee (MPC) announcement with MPC meetings still set to convene monthly moving forward. Read the full MPC statement at http://www.reservebank.co.za/.|
|(now CPI) is down to 7.6% as at March 2009 from a high of 13.6% last year (Aug 2008).|
|EQUITY & BONDS|
|JSE all share index has rallied somewhat and today is up to 20,690 from a low of 17,814 last year.|
|Rand/Dollar exchange rate has bolstered to R8.48 from R9.30 (1st Jan 2009), Rand/Pound exchange is at R12.51 today up from R13.45 (1st Jan 2009) so maybe we’ll be able to holiday overseas again soon.|
|The big question is what SA’s Q1’s GDP growth will be and how far the manufacturing & mining sectors have recovered from our negative Q4 last year (the 1st in a decade). The answer will determine whether SA will join all of our major trading partners outside China and technically be in recession. Low growth combined with a cash squeeze continues to put pressure on Employment.|
|CREDIT & MONEY SUPPLY|
|The “Credit crunch” persists with SA’s commercial banks adopting a cautious view amidst heightening arrear rates and sustained Liquidity pressure, although our Banks have benefited from being capitalised in rands whilst the US re-capitalisation plan has pumped substantial liquid into the world system which has seen the inter-bank lending rate breathing again.|
|Emerging market appetite remains cautious (Moody’s threatening to lower SA’s A2 rating) although the recent rally in our currency and resource pricing are no doubt positive indicators.
I leave you with this thought …”approximately 4billion people around the globe will be watching South Africa for a month over the 2010 world cup. Such marketing exposure and the privilege to show the world UNITY in our Rainbow Nation won’t come around often.”
Have a refreshing and peaceful long weekend with your families.