The rand gained another 1%

Wealth

The rand gained another 1% against the USD

The local market closed 1% down, mainly on the back of a weaker industrial sector, which lost 3.25% in value. The larger industrial shares came under pressure of a strengthening currency. The rand gained another 1% against the USD, and 1.7% and 1.9% against the pound and euro respectively. 

It was an uneventful week in global and local markets. Mixed third-quarter earnings results, uninspiring Brexit news, and minimal global trade developments kept the global and local equity markets slightly higher.

The local market closed 1% down, mainly on the back of a weaker industrial sector, which lost 3.25% in value. The larger industrial shares came under pressure of a strengthening currency. The rand gained another 1% against the USD, and 1.7% and 1.9% against the pound and euro respectively. 

Although the Conservative government of the United Kingdom (UK) had pushed for a timetable to keep their promise of delivering a plan for the UK’s exit from the European Union by 31 October, lawmakers in parliament voted to reject a limited timeframe for reviewing legislation related to Brexit. This means the UK will probably not leave the European Union by the October deadline. On Thursday, British Prime Minister Boris Johnson said he would ask UK lawmakers to agree to a general election on 12 December, which he believes will give parliament more time to ratify his latest Brexit plan. The uncertainty surrounding Brexit persists and is expected to put strain on the UK economy. 

The European Central Bank (ECB) left rates unchanged on Thursday in what marked ECB President Mario Draghi’s last monetary policy meeting at the Bank. The ECB kept its forward guidance steady, suggesting that the main interest rates will remain at their current or lower levels until evidence emerges of an acceleration of inflation. It seems that “lower for longer” remains the ECB’s plan. 

In its World Economic Outlook, the International Monetary Fund (IMF) projected growth of 5.8% for the Chinese economy next year, which is a reduction from the 6.1% forecast for 2019. Although the trade war with the US would seem to be affecting the Chinese economy, this should also be seen against the background of a massive growth of the country’s economy over the past decade. 

Locally, South Africans would be overjoyed given a growth percentage of 5.8. However, various structural issues would need to be addressed before South Africa could even contemplate such a growth figure.


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SECURITAS – Wealth Management






























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

Fanie WassermanB. Com (Hons)(UJ), PDFP (UOVS), CFP®fanie@securitas.co.za
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