Capitec & State of the Nation

Capitec &
State of the Nation

Equity investors had a difficult week as global markets gave up some of its recent gains. The main trigger was growing concern about rising interest rates and inflation in the US and their impact on stocks going forward.

Equity investors had a difficult week as global markets gave up some of its recent gains. The main trigger was growing concern about rising interest rates and inflation in the US and their impact on stocks going forward.

The pain was exacerbated in the local market with the attack on Capitec bank by the Viceroy Research group. The impact was felt much wider than Capitec bank, as the entire bank sector sold off and closed 4.99% lower for the week. The industrial sector lost 5.51% for the week, while the resources index closed 2.36% down. The property sector had a particularly bad start to the year, which continued in the past week. The JSE all-share index closed 4.77% lower for the week at 58 656.82 points.

In the US, the Bureau of Labour Statistics reported that total nonfarm payrolls increased by 200,000 in January, beating expectations of an increase of 175,000. Most of the gains came from construction, food services and drinking places, health care and manufacturing. Average hourly earnings grew more quickly than expected and increased by 2.9% year over year. The unemployment rate remained at 4.1% for the fourth straight month. This is a strong indicator of stability in the US economy and interest rate increases is the logical conclusion.

Janet Yellen presided over her final meeting of the rate-setting Federal Open Market Committee on Wednesday. Jerome Powell is the new Fed Chair from today. Fed policy is said to be unchanged.

In Europe, gross domestic product figures released during the past week indicated that the European economy grew faster than that of the US in 2017. The eurozone economy expanded by 0.6% in the fourth quarter. For the full year, the eurozone economy grew by 2.5%.

Back on home soil, the rand traded stronger against the US and Australian dollar and remained unchanged against other major currencies.

This week will see the last State of the Nation Address (SONA) by Jacob Zuma – a president who is well past shame. South Africans are waiting anxiously for the SONA on Thursday to hear what government has prioritised for the next year and what is going to be done to improve their quality of life. A review of the 2018 address in terms of economic impact will follow in next week’s newsletter.

 

Johan Steyn

Regards,

SECURITAS – Wealth Management

       

















Market data provided by I-Net | News article provided by Securitas with 4D Wealth
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

Fanie Wasserman, B. Com (Hons)(UJ), PDFP (UOVS), CFP®, 
fanie@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
Henro Grové, B. Com (UP), B. Com (Hons)(UP), Cell. 083 945 3578, henro@securitas.co.za