Business Confidence Index (BCI)

Wealth

Business Confidence Index (BCI)

The biggest negative month-on-month influences on the business climate were a weaker Rand exchange rate, lower real retail sales, the decreased real value of building plans passed, and the higher, less stable, cost of energy supply.

For the first time this year, the Business Confidence Index (BCI) of the SA Chamber of Commerce and Industry (Sacci) has dipped below the level of a year ago. Sacci’s BCI for June 2018 came in at 93.7, which is 1.2 index points lower than its level of 94.9 in June 2017. The biggest negative month-on-month influences on the business climate were a weaker Rand exchange rate, lower real retail sales, the decreased real value of building plans passed, and the higher, less stable, cost of energy supply.

South Africa’s manufacturing production data released by Statistics SA showed an above forecasted improvement supported by the weaker rand. Manufacturing production measures the change in the total inflation-adjusted value of output produced by manufacturers.

The JSE closed weaker for a fourth consecutive session on Friday, to end the week in the red as the sell-off on the local stock exchange persisted. The all-share index (alsi) closed 1.65% in the red. The resources index took the largest knock, dropping by 2.70%. The industrial and financials indices lost 1.57% and 0.76% respectively.

International highlights for the past week: Days after levies on $34 billion worth of Chinese imports came into effect and China retaliated with its own equal amounts of levies on US goods, the US announced it is preparing to levy duties on an additional $200 billion worth of Chinese goods.

US inflation ticked higher in June, while consumer prices rose at their fastest pace in six years in June, i.e. by 2.9% year-over-year. Producer prices increased by 3.4% compared to the previous year. However, these figures are not expected to force the US Federal Reserve into raising rates more rapidly than the market is anticipating.

British Prime Minister Theresa May released a long-awaited white paper meant to serve as a blueprint for upcoming negotiations with the European Union (EU). The plan proposes to keep the United Kingdom closely aligned with EU rules on trade in goods, while allowing the UK a freer hand on services.

Back on home soil: The rand strengthened to levels of around R13.27 against the green back, R15.50 against the euro and R17.57 against the pound. This is a strong indication that the SA Reserve Bank will keep interest rates unchanged in the coming week.

 

Regards,

SECURITAS – Wealth Management





















Securitas Financial Group is a Registered Financial Services Provider (FSP) FSB license number 6536

Johan Steyn, RFP®, Cell. 082 680 9510, johan@securitas.co.za; 

Albert van der Linde, B.Com (US), B.Com (Hons)(UP), Cell. 076 087 3084, albert@securitas.co.za;

Hannes Bresler, CFP®, B.Com (Hons)(UJ), Pr.Tech Eng, Cell. 082 823 7973, hannes@securitas.co.za;