Financial News 18th June 2024

Market overview
The FTSE/JSE All Share closed last week at 77 053.75, increasing by 0.26%. The financials sector was the biggest contributor gaining 8.35% as the market responded positively to the proceedings in parliament. The basic material and oil & gas sectors were the biggest detractors, decreasing by 6.00% and 3.70% during the same period.
Looking at the MSCI indices, developed markets increased by 0.41% during the previous week while emerging markets increased by 0.50% over the same period.

South Africa’s unity government taking shape
Cyril Ramaphosa was re-elected as South Africa’s president by parliament on Friday, as the ANC drew support from the Democratic Alliance, as well as from the Inkatha Freedom Party, GOOD and the Patriotic Alliance. This collective represents 273 seats in the National Assembly, which is 68% of the 400 available seats.

SA manufacturing shines
Annual manufacturing production in South Africa increased by 5.3% in April 2024, following an upwardly revised 6.5% slump in the prior month. It marks the strongest increase in industrial activity in almost a year. Part of the increase can be attributed to the absence of loadshedding since February.

US Fed keep rates unchanged
The Federal Reserve left the fed funds target range steady at 5.50% for a 7th consecutive meeting in June, in line with forecasts. Policymakers do not expect it will be appropriate to reduce rates until they gained greater confidence that inflation is moving sustainably toward 2%. Meanwhile, the dot plot showed policymakers see only one rate cut this year and four reductions in 2025.

Thank you to PPS Investments for the weekly Market Overview.

South African rand extends gains after unity government confirmed, Fed talks ahead
South Africa’s rand was slightly stronger in early trade on Tuesday, building on gains after unity government members were confirmed last week and ahead of talks by U.S. Federal Reserve officials later in the day. Read the full CNBC Africa article here>

SA big business hope for interest rates cut, rand strength and ‘responsive’ policy as GNU starts its work
The business community, particularly the property industry, has expressed hope that the formation of a Government of National Unity (GNU) in South Africa will bring stability to volatile financial markets and incentivise the SA Reserve Bank (Sarb) to cut interest rates. Read the full IOL Business Report article here>

South Africa braces for cabinet battle in new coalition government
South African political parties that last week agreed to form a governing alliance are limbering up for a tussle over cabinet positions, as President Cyril Ramaphosa prepares to be sworn in for a new term. Read the full article here>

Oil slips amid cautious demand outlook
Oil prices edged down in Asian trade on Tuesday, after posting gains in the previous session, as markets remained cautious about global demand growth prospects amid the expectation of stronger supply. Read the full BusinessDay article here>

Gold rises as traders await Fed speakers for rate clarity
Gold prices edged higher on Tuesday as treasury yields eased, with market participants awaiting US data and comments from Federal Reserve officials for more clarity on the central bank’s road map for interest rate cuts. Read the full BusinessDay article here>

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