I trust you are living strong and courageously navigating these rough economic waters amidst the backdrop of our golden beaches and mild and inviting East Coast autumn. It’s hard to believe we are at the end of another month of trading, which seems to have brought with it more mixed emotions and as stewards of the market-place, our work is clearly cut out.
On behalf of GENUITY, it gives me pleasure to bring you hot off the press 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):
|Once again, the SARB today lowered its REPO rate to 7.5% at its monthly MPC meeting, with Banks prime lending rates set to come down to 11% tomorrow from a high of 15.5% last year (Nov 2008). It appears that with inflation hovering above the upper ban of SARB’s target, we may have reached the end of Mr. Mboweni’s willingness to relieve the pressure. Read today’s full MPC statement at http://www.reservebank.co.za/.|
|(now CPI) etched marginally down in the month of April 2009 to 8.4% from a 2008 high of 13.6% (Aug 2008).|
|EQUITY & BONDS|
|JSE all share index gained much ground in May and today is up to 22,175 from a low of 17,814 last year (up 24.5%).|
|The RAND is like a racehorse at R8.09 to the USD from R9.30 (1st Jan 2009), and R12.90 to STERLING from R13.45 (1st Jan 2009), let’s just hope it’s a long distance runner and not a sprinter.|
|Well, with a 6.4% plunge in GDP in Q1 2009, we officially join all our major trading partners (US,UK, Germany, France & Japan) in the less prestigious recession club with only China holding out. I guess the only solace is we haven’t been in recession for 6 trading quarters like the rest of them.|
|High on trade union agenda’s is that the private sector doesn’t use this data to accelerate retrenchments.|
|CREDIT & MONEY SUPPLY|
|The “Credit crunch” persists despite Mr Manuel’s suasion and Mr Mboweni’s dinner date with SA’s Banking Brass. SA’s commercial Banks as at March 2009 have set aside 4.8% of their total lending book for impairments adopting a cautious view amidst sustained liquidity pressure. Although Banking experts are not too concerned saying that impairments have been as high as 7% (1998) and Banks are currently holding high levels of capital (in Rands!).|
|As mentioned last month, 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 …”it’s not how you start it’s how you finish” as well as some snappy new footage of Durban’s very own KING SHAKA airport. As a multi-Billion rand development and part of Durb’s vision to become the conferencing, logistics, sport and entertainment Mecca of Africa …one can’t criticise the City for thinking small.
Have a refreshing and peaceful week with your families.