South Africa's Moody's Ratings, AISA & CPI

Wealth

SA's Moody ratings, AISA & CPI

Following US President Donald Trump’s first tweet about South Africa on Wednesday, the rand slipped by 1.5% but soon regained some traction to end the week stronger.

Following US President Donald Trump’s first tweet about South Africa on Wednesday, the rand slipped by 1.5% but soon regained some traction to end the week stronger. The currency traded at around R14.27 against the USD, R18.28 against the pound and R16.57 against the euro. The rand remains volatile and will probably only stabilise once Turkey’s lira turmoil has ended.

Both S&P Global Ratings and Moody’s Investors Service credit-rating agencies cut Turkey’s sovereign debt deeper into “junk” territory late on Friday. Both agencies are concerned about the lira’s extreme volatility and the economic instability in Turkey. South Africa is expecting ratings comments from Moody’s in October.

On Wednesday, the US stock market set a record for the longest-running bull market (9 years, 5 months, 13 days) in modern financial history. The S&P 500 Index rose to its first intraday record in nearly seven months on Tuesday, tying the length of the longest-running bull market milestone set between 1990 and 2000. The latest leg of the record S&P bull run can be attributed to strong US economic growth and renewed strength in quarterly corporate earnings.

The South African market also recorded a positive run for the week, with the JSE all-share index (ALSI) closing 3.82% higher, driven by the industrial and financial sectors that closed 5.82% and 3.92% higher respectively. The resources sector closed the week largely unchanged.

Annual consumer price inflation increased to 5.1% in July, up from 4.6% in June, Statistics SA announced on Wednesday. This is the highest rate since September 2017. Stats SA said that, among the contributors the CPI, the housing and utilities sector increased from 1 percentage point in June 2018 to 1.3 percentage points in July. Transport increased from 1 percentage point in June 2018 to 1.4 percentage points in July. This is mostly because of the rise in the petrol price.

The price of Brent oil jumped to $75.63 per barrel. This, coupled with the weaker trending rand could only spell bad news for the petrol price. All hope is on the Energy Portfolio Committee to come up with a plan that will give consumers some relief at the pumps.

 

Kind regards,

 

SECURITAS – Wealth Management






















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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;

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