Business Confidence Index
Business Confidence Index
During the past week, the RMB/BER Business Confidence Index (BCI) jumped by 11 points from 34 in the fourth quarter of 2017 to 45 in the first quarter of 2018.
During the past week, the RMB/BER Business Confidence Index (BCI) jumped by 11 points from 34 in the fourth quarter of 2017 to 45 in the first quarter of 2018. The BCI is at its highest level since the start of 2015, as the appointment of President Cyril Ramaphosa boosts prospects for industry-friendly domestic policies. However, it would seem that this has not translated into higher transaction volumes. According to the BankservAfrica Economic Transaction Index (Beti), growth between January and February was almost flat, similar to that between December and January. The seasonally adjusted and standardised Beti figure adjusted for inflation continues to show a flat trend between these months.
Equity markets remain volatile and the JSE’s all-share index (ALSI) closed 1.62% down for the week. The largest contributor to the weaker performance was the industrial sector, with a loss of 2.92% for the week.
In the US, confidence among corporate CEOs, small business owners and consumers continues to rise. The Business Roundtable CEO Optimism survey hit a 15-year high this week, while the National Federation of Independent Business’ Small Business Optimism measure hit a 34-year high.
Softer US economic reports, including disappointing February retail sales figures and sluggish home sales, have prompted economists to revise their growth estimates downward for the first quarter of 2018.
Over in Europe, investors had expected strong economic growth to lift eurozone inflation closer to the European Central Bank’s target of 2% in the course of 2018. However, in recent months the opposite occurred, as consumer price gains were revised downward to 1.1% year-over-year in February. The slowing inflation rate could call into question market anticipation that the ECB would end its quantitative easing programme late this year.
International equity markets closed mostly lower, with the exception of the Nikkei and DAX that recorded a positive week. The trendsetting S&P Index closed 1.24% in the red, and in the east the Shanghai Composite Index closed 1.13% down.
The rand lost some ground against the major currencies, closing at R11.97 against the USD and R16.69 against the pound.
This coming Wednesday, all eyes will be on new Fed chair Jerome Powell who will be making his debut in the hot seat at his first meeting of the Federal Open Market Committee (FOMC) after taking over from Janet Yellen. The US rate decision will have a global impact.
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