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Bonds remain firm on short covering
August 26, 2011-- South African bonds stayed firm in late trade on Friday, on the back of short-covering.
Earlier in the day a trader said: "I don't think he has a lot of room to manoeuvre, so it's going to be a lot of lip service to what they'd like to see. I don't think there's any firm plan they can put into place, I certainly don't see their option, QE3, being part of the policy. Either way it's a difficult situation for them, but it's obviously the rhetoric that will affect markets."
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Source: FIN24
South Africa: Macro Policy Mix and Its Effects on Growth and the Real Exchange Rate -- Empirical Evidence and GIMF Simulations-IMF Working paper
August 25, 2011--Summary: This paper examines whether a mix of tighter fiscal policy, looser monetary policy, and greater reserve build-up would increase growth and depreciate the rand in real terms.
The experience of South Africa over the last twenty years is looked at using a number of econometric techniques that control for the external environment.
Measuring the Potential Output of South Africa-IMF Report
August 25, 2011--Summary: This paper provides an assessment of the South African potential output for the period 1985-2010 by applying both structural and nonstructural estimation techniques. The analysis suggests that, while potential output growth steadily accelerated in the post-apartheid era to about 3 1/2 percent (1994-2008), it has decelerated considerably following the outbreak of the financial crisis, as was observed in other advanced and emerging economies.
While this indicates that, at around -1 1/ 2 percent, the estimated 2010 output gap was lower than previously thought, there is a fair amount of uncertainty regarding its "true" magnitude, reflecting in part the backward looking nature of the estimation methods. The paper concludes that the potential growth is likely to gradually revert to its precrisis pace and the output gap to have closed by early 2012.
view the IMF report-Measuring the Potential Output of South Africa
Source: IMF
JSE up as markets wait on Bernanke
August 25, 2011--The JSE was in positive territory at noon on Thursday ahead of the US Federal Reserve chairperson Ben Bernanke's speech on Friday. Bernanke was widely expected to announce some sort of stimulus for the US economy.
By 12:12 local time, the JSE All Share [JSE:J203] index was up 0.87% to 29 861.21 points with resources 1.61% higher, industrials up 0.63%, and platinum miners gaining 0.43%. Banks rose 0.20%, and financials added 0.18%. Gold was flat (0.04%).
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Source: FIN24
Rand rebounds against dollar
August 25, 2011--The rand gained over 1.3% against the dollar on Thursday and was set to keep its gains partly on strong exporters' interest to sell the greenback.
The rand was trading at 7.2210 to the dollar at 14:08 GMT after it hit 7.1775 earlier, from Wednesday's New York close of 7.27. It was much recovered from a session low of 7.2790.
"Exporters came in when the rand weakened earlier. Then there is positive equities on the Bank of America news," said a dealer, adding the rand had good demand in the 7.23 area and could hold its gains.
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Source: FIN24
Bonds mixed on back of foreign buying
August 25, 2011--South African bonds were mixed in late trade, with offshore interest bringing the market back.
By 15:50, the benchmark R157 bond was trading at 6.690%, from its previous close of 6.680%. The R207 was bid at 7.810% and offered at 7.795% from 7.810% and the R186 was trading at 8.050% from 8.115%
The rand was bid at 7.1985 against the dollar from its previous close of 7.2625.
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Source: FIN24
IMF urges SA to delay rates rise
August 25, 2011-South Africa’s economy will likely grow by 4% this year and next but faces significant downside risks from a slowdown in the developed world, the International Monetary Fund (IMF) said on Thursday.
In its Article IV report, the IMF said strong local demand will underpin growth in the economy, but given the uncertainties globally and locally, it would be prudent to delay interest rate increases.
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Source: FIN24
Tunis Stock Exchange seeks to support growth
August 25, 2011-Tunisia’s stock exchange, the Bourse des Valeurs Mobilières de Tunis, aims to play its role in faster economic growth in coming years. On 9 July, Mr. Mohamed fadhel Abdelkefi, President of the BVMT’s management committee, announced a 5-point development strategy for 2011-2013. This will include:
1. Develop the financial market culture and awareness through media and education outreach campaigns and open days
2. Deepen the capital market by making more companies eligible to list
3. Further develop the bond market including possibly a secondary mortgage market
4. Improve the IT platforms, including a new electronic trading and
information platform in 2012
5. Develop BVMT staff and human resources through additional training programmes.
There are 58 companies listed for trading. According to CEO Mohamed Bichiou foreign participation makes up about 20% of the market capitalization, which was TND 13.2 billion ($9.6bn) on 30 June. At its 2011 peak on 7 January the TUNINDEX was at 5,217.41, before crashing 23% to a low of 4,033.43 on 25 February after the stock exchange closed during the revolution. It then gained, slipped back to 4,077.05 on 26 May but has since been climbing well and closed at 4,476.94 on 24 August, up 9.8% in 3 months. The construction and building materials index has been the best performing followed by industrial and basic materials companies, while banks have been the worse performing (many investors expected them to take hits on loans to people linked to the former regime of President Ben Ali), followed by insurers.
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Source: African Capital Markets
JSE follows Asian markets softer
August 24, 2011--The JSE opened fairly flat on Wednesday morning, but weakened in the first hour of trade as Asian markets were negatively impacted by a Japanese downgrade.
By 10:05 local time, the JSE All Share [JSE:J203] index was off 0.22%, despite a 0.18% rise in resources. Gold miners were off 1.5% and platinum miners edged 0.29% softer.
Industrials declined 0.49%, financials shed 0.29% and banks gave up 0.41%.
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Source: FIN24
Rand still vulnerable against dollar
August 24, 2011--The rand weakened against the dollar on Wednesday and is likely to remain under pressure given the uncertainty prevailing in global markets.
Government bonds firmed and focus will be on CPI inflation data at 08:00 GMT. The market is expecting inflation to rise to 5.2% year-on-year.
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Source: FIN24
